A compromise may be in the works for a controversial rezoning application that would protect the Coconut Inn's ability to rebuild in the future.
Owner Joe Caruso wants the city to grant the Traditional Hotel District zoning, a special category established several years ago to preserve small hotels on Pass-a-Grille.
A year ago, amid sharp opposition from nearby residents, the city rejected Caruso's rezoning application.
Caruso waited more than a year to resubmit the same request only to have it rejected by the city's Planning Board last month, again because of opposition from neighboring home owners.
Many of those residents showed up at Tuesday's commission meeting to protest the rezoning and a land use change that rezoning would require.
After hours of debate and testimony, the commission backed off making a final decision.
On the recommendation of its attorney, Suzanne Van Wyk, the commission allowed Caruso to negotiate a special development agreement to limit development on a now vacant lot behind the hotel while providing "meaningful" projections for the hotel to redevelop in the future.
Caruso said he would agree to restricting redevelopment on the back lot to recreational uses only, unless the hotel were catastrophically destroyed. He also offered to build an 8-foot wall as a noise barrier.
The final agreement would be binding on Caruso or any future owner of the property.
The Coconut Inn is at 113 11th Ave. and is surrounded by residential homes.
The hotel uses a second adjoining lot that fronts on 12th Avenue for parking. Residents are particularly opposed to commercial structures on that lot.
Caruso's attorney, Jackson Bowman, warned there would be a lawsuit if the commission denied the rezoning and land use change.
Several residents opposed to Caruso's request were represented by attorney David Bacon.
"Whatever decision the commission makes, you will have a lawsuit," Van Wyk told the commission at one point.