Design Option 1

To refresh your memory, here's a picture of the garage as seen from the house.

And here's a picture as seen from the alley.

These were taken while the garage/yard were under construction.  What you don't really see in either picture because it's blocked by trees is a bump-out.  

Now that I've refreshed your memory, let's get to the plan.  Option 1 looks like this:

We would remove the double doors to the yard and replace them with a single door moved further over.  We would also add a door to the alley side.  Having the straight shot like that would allow the traffic pattern to stay in a single line which would leave more living space open for dining and lounging.  There was a large storage option along the alley side, as well as the ability to surround our daughter's room with storage, depending on if we wanted to loft her bedroom or not.  

They also included some cross-sections to show more details or ideas.  They thought this scheme could go two ways, so let's look at 1A first.

In this diagram, the master bedroom was upstairs. There would be a few steps up and then a ladder that would go to the master bedroom or storage.  One interesting idea they had was to slide the steps out to access more storage below the landing.  

As for the master, a king-size bed was one of our design requirements.  In a small space, this is not a small request.  Because the bed itself is so large, and having space to make the bed comfortably takes up even more space, the bathroom below it will be large by default.  Adding the laundry to the bathroom made sense to make good use of that space.

As for the kitchen, it's a long, galley style kitchen, but has an island that slides out to give me the work space that I really need.  They also wanted to feel out how we felt about curtains vs doors to block off things like the pantry.  Tip: curtains can save up to a foot of space over even a bi-fold door.  

Option B looks like this:

In this option, we would switch places with our daughter and we would have the master bedroom downstairs with storage above our bedroom.  Our daughter's room would move above the bathroom.  She would have enough room for a trundle bed and a little table in her room.  The washer/dryer would open to the living space and the living room would  be more defined.

We really liked all the open living space that we would have and having a pantry would allow us to continue to capture the savings we get by buying in bulk.  The door to the laundry closet would be thick and double as a bookshelf.

Here are some inspiration photos they showed us to illustrate the ladder, as well as the storage wall they were proposing along the alley.

So that's Option 1.  What do you think?  Anything jump out at your or anything you would change to this design?  I'll withhold my/our comments until I've presented all the plans.