This report is a companion to the APhase One Report dated June, 2005. In Phase 1, we evaluated the current land use policy and regulatory framework; interviewed key local business and government leaders; and held public workshops to gain understating of downtown Kelso's sternths, weaknesses, opportunities, and threats. This Phase Two report describes the current status of Downtown Kelso in terms of land ownership, land use and zoning; identifies potential development opportunities; and makes recommendations regarding town center boundaries; zoning and land use regulations. It also provides recommendations for further community and technical work that will lead to a new action plan. sSome of the Phase One findings and recommendations are inculded here for consistency.