CAPITOLA -- The Capitola City Council approved a 23-unit housing complex for seniors at 1575 38th Ave. with a 4-1 vote late Thursday.

The project has been in the works since 2011, and originally was denied by the Planning Commission, which gave a directive to reduce the mass, scale and height of the proposed building. The building has since shrunk by a factor of three from its original 67-unit size, and has gained approval by the commission, but the community remains divided over many aspects of the development.

"The principle decision is whether or not we're going to overturn the Planning Commission's decision," said Vice Mayor Sam Storey of the Commission's 3-2 vote to allow the project to go ahead.

The council's approval means the zoning for the property, which is currently the site of Capitola Freight and Salvage, will be changed from neighborhood commercial to planned development, allowing for less setback from the street and a higher overall height for the building.

For a property to be zoned for planned development, it has to have a unique characteristic that warrants the change.

"It is upscale senior housing in Capitola, and we do not have that," said Councilman Ed Bottorff.

He said one of the reasons the Planning Commission denied the project originally was lack of parking.

With the new design, he said, "I think there's overkill on the parking."

Nathan Schmidt, the project's transportation planner, said the project is designed to allow 1.4 parking spaces per unit, and he expects fewer than half of those spaces will be used regularly.

"I'm not a fan of (planned development zoning)," said Mayor Stephanie Harlan, the lone dissenting vote. "I've seen it before and it's a way to get around the rules."

Harlan called the change "spot zoning," saying that the purpose of zoning is for residents of an area to know what type of development they can expect around them and changing the zoning for one property violates that understanding.

Harlan also expressed concern that vehicles would still overflow into the spaces at King's Plaza Shopping Center, located across the street from Villa Capitola, on 41st Avenue.

George Ow, owner of the shopping center, spoke in support of the project. Ow was opposed to the development in its first iteration.

The center's delivery and garbage pickup areas face the Villa Capitola site, raising concerns about potential noise disturbances.

"I think we can all agree that there is a need for more senior housing in Capitola and that demographic data show that that need will increase," Maureen Romac, one of the owners of the property, told the council.

Richard Grunow, community development director for the planning commission, said the new design, with a lower overall height and increased setback from the street, addresses the concerns that led to the agency's original denial of the project.

In addition to parking, the council debated landscaping, the revised size of the project and even the length of time residents will be allowed to have a live-in caretaker at the property without the project crossing the line from senior housing to assisted living.

"It seems like cruel and unusual punishment for a person who's starting to fall down to be told you have to move," said Santa Cruz County resident Charles Houdleston, 71.

Susan Sneddon, Capitola city clerk, said her office has received 38 letters and emails about the Villa Capitola project -- an unusually large volume.

While most of those letters are from seniors and family members of seniors expressing support for and interest in the project, the city also received a letter signed by 21 residents of Bulb Avenue, the street behind the proposed development, in opposition. Their concerns, as stated in the letter, are "privacy, shading, noise, traffic, parking and incongruency with the surrounding neighborhood."

Romac said she and her husband, Steve Thomas, co-owner of the property, have collected 180 signatures from supporters, including those of 20 residents of Bulb Avenue.

Kimberly Frey, of Bulb Avenue, spoke in opposition, saying the development will reduce the amount of sunlight on her property and allow residents of the nearby Villa Capitola to peer into her windows.

In other action, the council approved an experimental, one-day closing of the Esplanade to motor vehicles, scheduled for Oct. 13.