The Goleta City Council on Tuesday evening voted narrowly not to initiate a study looking into the possibility of annexing and allowing for the residential development of Glen Annie Golf Course in the northwestern Goleta Valley.

“I’m disappointed,” said Councilman Michael Bennett, who, with Councilman Eric Onnen, was in the minority of the 3-2 vote.

The Glen Annie Fields project was proposed by the owner of the financially embattled Glen Annie Golf Course, which has been losing about $1 million every year since it opened in 1997 for a total debt of about $15 million.

The 18-hole regulation-size public golf course has been in financial dire straits because of rising costs and only half of the expected revenue. It since has explored its options, one of which included converting into a municipal golf course, owned by the city of Goleta or Santa Barbara County, nixed because neither the city nor county is willing at this time to put up the money to purchase it.

Several versions of a plan to develop the property for residential use have been presented to the City Council, the most recent one being up to 190 homes and an executive golf course and restaurant on 176 acres plus additional acreage from adjacent properties adjacent.

[Note: An option the golf course has is to sell its parcels to private parties. An earlier version of this story was incorrect.]

Despite a list of possible benefits — local preference housing partnership with local employers, a 20 percent inclusionary housing rate, proposed recreational fields and affordable-by-design housing — the council majority acted on the staff’s notion that there is no need at this time for additional housing stock, especially if it entails a rezone. The Glen Annie Golf Course property, in county territory, would need to be annexed, and then converted from its agricultural designation to accommodate the development proposed for the area.

“The city is the logical service provider; it should also receive benefits,” said the applicant’s representative, John Dewey, who has been promoting the mutual benefit that annexation and development could provide the city and the golf course.

The conversion from its agricultural designation, requiring a General Plan amendment, could have been the first such conversion since the adoption of the General Plan.

“I’m having a hard time thinking we need to go forward with this at this time. I don’t think the public tolerance is there,” Councilman Ed Easton said.

Councilwoman Margaret Connell, meanwhile, expressed concern that the extra costs that would be taken on by the cash-strapped city would equal the projected revenues from the project.

“I wonder whether the soccer fields supported by the restaurant will actually pencil out,” said Connell, who advocated a “say no early” approach to the project, to avoid having the applicant, ValleyCrest Companies, spend more time and money to push its proposal through an initiation, only to possibly have its plans rejected again.

The project, in all of its incarnations during the past few years, has generated concern from local residents who say that adding more houses to the area will increase traffic on Cathedral Oaks Road, already affected by traffic coming in and out of nearby Dos Pueblos High School.

Other issues that project opponents had Tuesday night centered on water and environmental issues.

“This is a step in the wrong direction,” resident John Olson said. “I hope my city will defend the foothills.”

Those who supported the project praised the additional housing and recreational space.

“I’m for the project,” local businessman Pete Jordano said. “I live here, my people live here, and I’d hate to see the golf course go away.”

For Onnen and Bennett, the rejection of the initiation of the study for the Glen Annie Fields project will leave unresolved issues that might have been dealt with had the initiation gone through.

“Today I recognize that there are many housing opportunities in the near term,” Onnen said. “But the motivating factor is the expansion of recreational opportunities and improved access to the area … I couldn’t say no. I’d be cheating my community out of an opportunity to fix existing issues.”

Once again the future of Glen Annie Golf Course remains uncertain. One option the developer has is to sell its property in the form of 40-acre agricultural parcels to private parties.

— Noozhawk staff writer Sonia Fernandez can be reached at sfernandez@noozhawk.com.