In Europe you can develop an entire city with five or six-story buildings and get good density. Here, due to zoning restrictions, we have very few areas to work with.
If the few areas that allow density are filled with projects like this, you run out of room very quickly... and the result is you get
even more sprawl.
I know some of you will disagree, but I don't think height is the only thing to consider in a downtown area. Not every block needs to be a highrise. That would make the area bland and boring. I would be okay with a 5 or 6 story european style perimeter block development on the northern lot, since that would add hundreds of apartments and create an urban feel.