What is the purpose of the 2nd island? I see a prep sink and a bunch of counterspace. Is there a reason you need that space?
I do think he is right about no seating on the island to the right. If your idea is to prep and do cookies and such on the left island, then you will have people getting up and down, pushing in and out barstools while you work and they will be BEHIND you, so it isn't like you'll even get to visit with them while you work.
If you are concerned about space in the family room, I'd go with 1 island, not 2 and just make it bigger. Then you can have space for built in cabinets, bookshelves for cook books, etc. THen, with the other island gone, there would perhaps be space for a dinette or banquette for seating. I currently ONLY see space at the bar for seating. Is there a dining room that isn't shown in the picture?

The dining room is located south of the family room. See the columns in the image? That's where the dining room.

There's also a breakfast area north of the kitchen.

The reason I wanted the 2 islands is to get a separate work area. My husband is territorial when he's in the kitchen. lol. The middle island would be our boundary when we're both doing stuff in the kitchen. I can be on one side and he's at the other.

Right now, I can't be in the kitchen if he's in the kitchen. :(

Here's where I got the idea of the layout with seating in the middle island.

These are Don Gardner's:

I obviously don't know your family/friends/lifestyle, but who will be sitting in the middle island? Is it people YOU would want to be talking to or whom your husband(I take it from your response that he is the primary chef?) would be more likely to be conversing with?
I know when i work I like to be talking to people, but they should always be in front of you, not behind you as you are working.
I think that if you go with the picture and have people seated on the SIDE and one corner of the island, then it won't seem intrusive into the family room space. Just do as in the pic and have stools that can be completely out of the way when not in use. I also think the inspiration picture has it right in having the prep sink more in the middle than on one far end, thus allowing room for a person or 2 on the side of the island to sit. I know it cuts up the work area, but seems more "amicable" to guests.
Another more random question: You say he is territorial when he cooks. Do you do all of the prep for him as more a sous chef? If so, I'd rally for the fridge to be where the ovens are and the ovens to be where the fridge is. If he will be annoyed by you going to and from the fridge to get things and people in his space to get drinks, etc, then the fridge is the busiest place in the kitchen in that regard, so you may think about moving it from his space. If he's the one that preps what he cooks though, then its placement is fine.

I'd personally give him the cleanup sink and let him use the space next to that as his prep area and put a larger prep sink on the middle island. With seating at the middle island, you are gonna need a lot more aisle space between it an the other island. You don't have enough room to be able to have people sit and work behind them. You need at least 60" for that.

So, instead of the double island, what about a larger single island, with sinks on both sides, where you can each have your own workspace, yet face each other. That would let you keep the bar top in the adjacent room as seating and social space (with shallow storage on the kitchen side), but keep those folks out of your work zone. You could still do two stools at the open end of the space to sit and prep or wait for something to come out of the oven.

Dualing sinks-I like it! I can picture the water spraying fights already:-)

bahacca... We don't entertain much right now. The only ones I foresee to be seating in the middle island would be our kid/s while my husband and I prepare stuff in the kitchen.

No, I don't consider my husband to be the primary chef. And no, I don't do any prep for him. He just want his working area to be clear when he's preparing dinner. With our current tiny kitchen, it's really hard for 2 people not to be in each others way.

Very good point on the island seating configuration in my inspiration picture. I didn't really think about why they set it up that way. I kinda wondered, but I didn't realize that they did not put a row of stools on one side to give a working space around the prep sink. Thanks for pointing it out! :)

live_wire_oak... I like the idea of shallow storage in the bar-top island. Maybe an 18" depth cabinets? Hmmm... Something to thing about.

bahacca... Yep, spraying fights! I think I'll keep a small sink in the bar-top island.

Here's similar to my original setup:

The middle island where the chairs are does not look 60" away from the bar-top island. The clearance looks more like 48"?? or less?

So, my original one still not a good idea? LOL. :) Just checking.

The blue island shown above is around 60" wide, as is the aisle. the aisle on the other side looks closer to 42". Your aisles are not nearly wide enough unless you do shallower islands, and that wouldn't be possible unless you gave up the seating and the other sink, which defeats the purpose.

You cannot fit a sink into a 12" deep shallow cabinet on the bar wall, so if you shallow that side up, it cannot contain a sink. You could add it to the cabinet run by the fridge and that could be a nice snack area out of the main cooking zone that your husband could still use for himself. Shifting the fridge down to the end would give you more continuous counter space, which would be much more useful than a split counter. You DO have enough space to increase the main island to two full depth cabinets with facing sinks as was suggested.

Bummer! :(

So, what's the minimum depth cabinet I can have to a fit a sink? 18"?

I'll play with the layout more and see what I can adjust. I'm trying to avoid to move the wall, but it may be necessary to get what I want. :(

GreenDesigns... You mentioned shifting the fridge all the way down to the wall. My concern is the fridge door. It would hit the wall right? Don't I need some clearance to the wall so I can open the door without hitting anything and easily access things in the fridge?

Although it may look nice on paper, in reality, I think this is more like what you would end up based on your first drawing. (Image that is an overhang instead of shelves.) Stools or chairs would still be pulled out about this much when being used. Now, can you imagine being the person trying to work behind the people seated? And what if they wanted to pull out their seats more and face the other island. Then you would have their feet and legs intruding into the space even more. Although you might have just a bit more space than this picture shows, I don't think it would be enough.

Have you considered putting seating at just one end? If you could stand to lose a lower cabinet or two in the middle island, you could reduce your island down to around 27" (based on your overhang pref.), that would give you 61" between the bar and island. This would even allow you to shift the middle island over an inch or two to allow a bigger isle between it and the stove.

Some inspiration pictures.

{{!gwi}}

{{!gwi}}

This could be kept at the same height or even lowered to double as a baking area.