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.
A lot of laundry rooms have a narrow wasted space either next to or between the washing machine and dryer. To take advantage of this space, build a simple plywood cart on fixed casters to hold detergents and other laundry supplies.