It is situated in the town area.

Look around the sides of the orange structure.

It involves the building with boarded-up windows and an orange second-floor structure.

Locate the building in the town that has boarded-up windows and an orange second-floor structure with colorful foliage on one side. Make sure the interior lighting is red-colored so that the red light shining out of the windows will match with the red foliage on the outside.

To change the color of the interior light, you must go upstairs and use the center panel puzzle. And to access those stairs, you have to have solved the puzzle in the basement.

The orientation of the enclosure containing the tromino (3-block tetris shape) will determine the interior lighting color.

Once the lighting is correct, you have to go to the roof of the structure adjacent to that structure (across from the foliage). And to access the roof, you have to have involved solving a puzzle that lowers the stairs to the roof.

Once on the roof, you can solve this environmental puzzle from up there.

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Notice the colorful foliage on one side.

Do you see something red that looks like it could be a start circle?

It is not underground.

The reason one of the prerequisites is cool is because it gives purpose to something that previously seemed to have no purpose.

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Once you locate the start circle, does the path from left to right appear to be entirely red? If so, great. If not, then you have to satisfy the prerequisite.

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Look closely at the parts of the path that are not red.  Is that because of foliage or because of something else?

Hmm...it could be light.

Light from the interior...

If only there were a way to change the interior light color... :)

Go inside the building and walk up the stairs. If you can't get upstairs yet, then you still have to satisfy another part of the prerequisite.

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On the second floor, play around with the center panel puzzle.

There are different solutions to that panel that change the color of the lighting.  See if you can get it to be red.

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The different colors are activated depending on how you orient the enclosure that contains the tromino (3-block tetris shape).

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Once you have activated the red light, go outside and look at the foliage again.

Notice the red circle still cannot be activated.  This is because it's not quite a perfect circle yet.  Maybe you need to change your perspective.

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The prerequisites involve having solved a few puzzles in town.

Higher ground, perhaps? (Note that you can't reach this particular higher ground until you've solved a certain puzzle in town.)

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The structure opposite the foliage might prove useful.