close up play room closet behind, utility room. open it like this to make laundry closet at the back door. Enclose the water heater. use space where w/d are now at right of door as a little built in seat for bags & coat hooks over it.
this is another idea I saw in that client's house. Useful for stuff besides babies, of course. They don't want to stay all day in those little baskets anyway. Sweet idea for baby organization in a closet. You could even use it as a changing station.