[Editor’s note: The Montecito Inn is three stories tall. The story has been corrected below.]

A brewing battle between a businessman and a group of Montecito neighborhood activists over a proposal to turn a Coast Village Road gas station into a mixed-use condominium complex may come to head Thursday, when the Santa Barbara Planning Commission is to consider approving it.

The project — which the city planning staff supports — calls for building eight market-rate units at the site of the Olive Mill 76 Service Center, 1298 Coast Village Road, in a strip of Montecito that falls under the jurisdiction of the city of Santa Barbara.

The front of the proposed building would be used for commercial space, and the rear would contain the residential units.

Most of the parking would be underground.

The project has been in the works for two years, but it wasn’t until the last couple of months that the opposition mobilized.

A vocal group called Save Coast Village Road charges that the complex will block mountain views and clog an already stressed intersection with Olive Mill Road.

Opponents also say the project would create a canyon-like effect, because of the three-story Montecito Inn across the street, and set a bad precedent for other big buildings on Coast Village Road.

“If this one gets built, then all of these little buildings on the street are going to say, ‘Whoa, I could put a really big building here,’ and all these little shops will become national chains,” said Jeff Farrell, a member of the group, who works at Coldwell Banker next door to the gas station.

Meanwhile, the Montecito Association, which acts as a neighborhood association that makes recommendations to the Santa Barbara City Council, enthusiastically endorsed the project in a letter two years ago, but then sharply rebuked the proposal in another letter drafted less than two weeks ago.

The developer, Santa Barbara businessman John Price, adamantly denies that his Coast Village Road Gateway project will create a canyon effect, saying it is set back from the street farther than any other building in the area. He and the development’s architect, Jeff Gorrell, say it is the only property that size with underground parking in the city of Santa Barbara.

Price and Gorrell also believe the project will benefit the public with its added landscaping, decorative fountain and a red-brick sidewalk along Coast Village Road. In all, the 7,000 square feet of public open space is about five times the amount the developers are required by ordinance to provide, a city official said.

“We’re providing more community space to the public than what the ordinance requires,” Gorrell said. “Which is indicative of the fact that we are not overbuilding.”

They added that the height of the building — 35 feet, with a 40-foot tower — is well under the 45-foot height limit for the area.

“We’re not a monster, and it’s not canyonization,” Gorrell said.

One of the project’s most vocal opponents is the family that owns a residential property directly behind the gas station.

Sandy and John Wallace are unhappy with how the project, as proposed, would come within 10 feet of their garage, despite a zoning ordinance mandating a buffer of at least 17 feet.

“At the same time, they will be 27 feet above us, looking down on our home and entire property and costing us all of our privacy,” Sandy Wallace said in an e-mail to Noozhawk on Thursday.

She said the complex’s driveway would come within inches of the property line, “making evening headlights and noisy tires and traffic be a constant nuisance to us right in our living room and kitchen windows.”

Price has asked the city to make an exception to allow his proposed 10-foot buffer, saying it adheres to the spirit of the zoning ordinance, which is meant to protect residents from encroaching commercial property. The back of his development would be residential, not commercial, and a 10-foot buffer — also known as a setback — is OK in areas zoned for residential development.

City Planner Peter Lawson said he agrees that the request for an exception — or “modification” — is reasonable. He added that he doesn’t think it will set a precedent for other buildings in the area.

“If you walk along Coast Village Road, you will see there are a lot of two- and three-story buildings,” he said. “It’s within the parameters and also the area is pretty well developed out.”

The city annexed Coast Village Road in the 1950s because the area was looking for sewer services, Lawson added. Montecito is not an incorporated city.

Price, who owns about 10 gas stations with his family, said the alternative is to build a bigger service station.

Three years ago, Price said, he realized he needed to do something about his Union 76 station, which was running a deficit.

At first, what he wanted to do was sell more gas, perhaps by converting the 12-hour station into a 24-hour facility.

But he said his land-use consultant, Harwood White — who happens sit on the Planning Commission — advised Price to try something completely out of the realm of his experience as a 32-year veteran of the gas-station business: build an upscale mixed-use condominium complex.

The idea was that, as an annexed finger of the city of Santa Barbara, Coast Village Road was a gateway to Santa Barbara, and a super-sized gas station isn’t a very good gateway.

In addition to the fierce opposition to the project, Price also has faced conflict-of-interest questions regarding his relationship with not only White — who will recuse himself from voting Thursday — but two other planning commissioners.

Commissioner Bruce Bartlett is an architect for a piece of property Price purchased in Goleta and he, too, will recuse himself. (Bartlett started working on Price’s Goleta project seven years ago, before he became a commissioner, Price said.) Lastly, Price is a client of the law firm of the husband of Commissioner Charmaine Curtis Jacobs. She, too, will recuse herself, Price said.

Now, Price jokes that he almost wishes he would have gone with Plan A — the gas superstation.

“I’d have a heck of a lot more friends, and a lot less gray hair, that’s for sure,” he said. “But to this day, I think I made the right decision.”

— Noozhawk staff writer Rob Kuznia can be reached at rkuznia@noozhawk.com.