For the second time in two months, dozens of people showed up Tuesday to urge New Orleans city planners to vote against a proposed 37-room boutique hotel and pool complex in Bywater.

This time, they got the decision they were hoping for: The City Planning Commission went against the recommendation of its staff and rejected the controversial $10 million proposal.

The City Council will now decide the project's fate.

The commission's unanimous vote came after nearly an hour of public debate that frequently grew contentious.

The so-called Sun Yard is being proposed by two first-time hotel developers. The resistance to it encapsulates a wider controversy over the impact of short-term rentals in the neighborhood.

Many longtime residents who oppose the project blame Airbnb and other rental services for helping to transform what used to be a working-class area into a hot spot for tourists, contributing to rising costs for housing.

The contested site — known as the Truck Farm — previously hosted the popular Chazfest alternative festival, which featured local musicians. Last year, it was purchased by Liz Solms and her husband, Giuliano Pignataro, who co-owns a small family business in Philadelphia that focuses on historic preservation.

Situated at St. Claude Avenue and Montegut Street, the property includes four 19th century, two-family homes and a 1960s ranch-style building last used as an office, as well as significant open space.

The couple has proposed incorporating the existing buildings, whose previous tenants were forced to move, into the Sun Yard project. It would include a restaurant, plus an outdoor bar and pool with event space.

Commissioner Kyle Wedberg, a Bywater resident who heads the nearby New Orleans Center for Creative Arts, offered the motion to reject the proposal. While reluctant to go against the commission's staff, he said, the site presents too many logistical challenges for what is being proposed.

"There are properties where this would be an instant go," Wedberg said, listing the former St. Claude General Hospital and the Holy Angels campus as examples.

"I live adjacent to a property that was once a sausage factory and is now in line to become 70 condo units," he said. "So this is a neighborhood that — as much as some people would like to see it — cannot be dipped in amber and remain what it is today, tomorrow."

Few residents publicly endorsed the proposal at Tuesday's meeting. Mary Ann Hammett, chairwoman of the Bywater Neighborhood Association, said the group supports the proposal as long as its developers agree to certain stipulations, including enforcing a noise abatement plan, limiting who could use the pool bar and restricting its hours of operation.

"This project will be a benefit to the entire neighborhood," she said.

But far more disagreed. Mark Gonzalez, a board member of Neighbors First for Bywater, a residents' group that opposes the project, said those stipulations are "not sufficient to mitigate the impacts." He criticized the competing neighborhood group as not being a true representative of the community's sentiment.

In fact, at least a dozen people spoke against the project, with many returning to the contention that the hotel, pool and bar would largely benefit tourists, rather than neighbors, and ultimately come at the expense of housing units that were once filled by residents.

Some also contended that the developers tried buying their houses at above-market rates, further driving a wedge into the neighborhood.

In its report, the planning staff had acknowledged that the proposed uses represent "a definite increase in the overall intensity."

However, the staff found that noise-related issues could be remedied, and it recommended approving the project. It said the project would "invigorate commercial activity along St. Claude Avenue while being compatible with neighboring residential properties."

Now, the City Council will have the final say. The site is in Councilwoman Nadine Ramsey's district.

Follow Richard Thompson on Twitter, @rthompsonMSY.