Hi Terracing on a slope can be done to give different useful areas. Here is one of the projects we did with the lower level being a firepit area and the upper level being synthetic lawn. With the last photo being the before. There are ways to make the walls look more natural by using a different type of block or growing plant material on them. From the plant material it looks like you live in california. (I see a bougnavillea). If you are in Los Angeles area and would like to talk about a project feel free to look at my profile and give me a call.

If privacy for the patio was wanted, a small section of hedge planted outside the existing hedge, a few feet away from it, would be an easy way to block the view so outsiders could not see directly into the patio area (along the lines of how privacy is created without using doors at airport bathrooms.) In this way access could be maintained. However, if that's not needed, I don't see the reason to close off the opening ... unless you were going to fill it in with matching arborvitaes for a solid hedge. Insofar as just "sprucing it up," it looks like what it really needs is improved grass. But you say you've already done that. Another possibility ... the mulch bed below the hedge could be filled in with low groundcover so as to look at green instead of brown ... but it's such a small sliver of bed that it wouldn't make a huge difference. The bed could be widened and filled with groundcover for effect. As far as planting something up against the hedge, I'd be careful about doing that because it's sure to cast shade and create a permanent hole in whatever portion shades the arborvitae surface. In other words, I can only see low, groundcover type plantings being safely placed against the hedge.

Ok, I will try to answer your questions and have added new photos. We would like separate areas as we do not have much room right behind the house with the septic bed and tank area. The only area where we would be able to have a decent sized area would be behind the garage. We thought about having bar area here with outdoor seating/ lounge area. We would like a covered structure in this area. Dining area we would like closer to house maybe between where the stairs and the covered structure would be. We are not fans of being up high on a deck and would prefer patio but not sure how to transition from patio doors down to ground level. Another available space is to the right of stairs. Thanks Cathy

"Our building official says our retaining wall can be no higher than three feet and he wants us to get to 850 or below more quickly, although he hasn't defined for us exactly how quickly is necessary to meet the ordinance." Do you live in a community where other retaining walls are greater than 3 feet? I would explore under what conditions they are permissible. Usually, retaining walls greater than 3' need to be designed by a civil engineer. Since tolerances are tight,I would ask to be pointed to the specific code that specifies "how quickly" you must reach existing grade, so that there is no mystery and you know exactly what you're working. Sometimes, information "translated" by someone, even if they properly understand it, can be misinterpreted along the line. There is incentive to have the lowest retaining wall possible in that it will cost less and be less likely to have future problems.