I had planned a wye with some storage track in the closet, but I decided that what we needed more than anything was a way of storing all of our model railroad stuff. We bought a bunch of these plastic storage bins. I then mounted some shelves to fit the bins' height. At the very top I was able to put some bulky items.
I also installed this fluorescent light fixture to add lighting to the closet.
On the other side of the closet I installed a bunch of shelves to store various loose items.
And, finally, I moved my wife's work bench into the closet. It is actually a nice space to work on, because all the model railroading items are right there. There is lots of light in the closet. The reason for the move is that I am getting to build a ten-level helix that will allow for a large storage yard under the layout. A major undertaking.