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I built and am still working on my own island. It used to be lumber and an old cabinet, and it can't be fixed since it needs to be moveable if needed. I would also vote to keep it a prep space. My sink is a step away on one side, and the stove a step away on the other but I have very little counter space. The table top portion of the island was carefull set to be just the right height for chopping and prep since the counter is too high. The frig is a step away from the stove.
I put shelves for spices and condiments on the outside of the old cabinet, and will put a support to hold cutting boards on the back. It tilts back for storage of seldom used things under it and I put shelves in the cabinet. With stools, it also doubles as a space for 4 to eat.
My kitchen isn't small, but was bare and I'm slowly filling up the walls with shelves and putting in a pantry on one wall. Making the old cabinet an island makes all the difference since it fufills so many needs.