Things were looking up for Elizabeth Wong in February 2017, when the Palo Alto City Council narrowly approved her plan to build a four-story mixed-use building on University Avenue site that once housed the popular Shady Lane boutique.

But 18 months later, the project at 429 University Ave. remains mired in the city's planning process, hampered by community opposition and skepticism from the city's Architectural Review Board. Last week, it faced a fresh setback when the board rejected proposed design changes, setting the stage for an appeal and potential litigation.

The board's 2-1 vote, with Vice Chair Alex Lew dissenting and board members Wynne Furth and Peter Baltay recused, was the latest turn in the road for a project that has been in the works since June 2014 and that has been subject to 14 public hearings before the council's 5-3 vote in in February 2017, which stipulated it had to meet a set of conditions pertaining to the building's design.

Since that vote, Wong has gone through several different architects and has made a number of tweaks with the intent of complying with the council's directions and the board's recommendations. But on Oct. 4, board members Osma Thompson and Robert Gooyer both agreed that it has not far enough and recommended denying the proposed changes.

Even though the board's decision was focused on three specific design elements – landscaping, building colors and the building's west wall – its vote makes it exceedingly likely that the project will go back to the council for another review. Given the board's negative recommendation, it will now be up to interim Planning Director Jonathan Lait to either overrule the board and approve the deeply polarizing project – all but guaranteeing that nearby residents will appeal – or reject the project and almost certainly face a challenge from Wong.

For Michael Harbour, who appealed the original project, the decision should be pretty straightforward. Harbour, a downtown resident with a medical practice on Kipling Street, has argued for years that the project is too massive for the area and incompatible with Kipling, a narrow street that includes numerous Victorian buildings.

"This proposed mammoth four-story building really overshadows it," Harbour told the board during the hearing.

Harbour noted that the council's conditions of approval included more details about the landscape plan, revision to building colors and a "decorative wall design treatment" to address the blank wall that would be visible when the building is approached from University Avenue. This treatment, the council’s motion states, should be "subject to review by the Architectural Review Board."

The board's vote, he argued, demonstrates that Wong has failed to do that. He also noted that because the building's design has been modified since the council’s 2017 vote, the new project no longer conforms to what was approved.

Wong took issue with that interpretation. The project, she told the board in another hearing on Sept. 20, has been thoroughly vetted by various city departments. The council, she noted, has already approved the building's massing, which was its most controversial element. Harbour's arguments, she said, are "water under the bridge." The board's discussions, she argued, should be narrowly focused on landscaping, building colors and the west wall.

Her husband, Jaime Wong, agreed.

"I don't think the City Council wants to see this again," Jaime Wong said Sept. 20, at the second of three public hearings on the project.

The city's planning staff had recommended approving the project based on recent revisions to the color scheme and the wall design, as well as the added landscaping elements. The board, however, found the design lacking. Thompson and Gooyer both said they couldn't make the necessary findings to approve the project.

Thompson said the project fails to have a "unified coherent design" and nor is it "of high aesthetic quality, using high quality, integrated materials and appropriate construction techniques, and incorporating textures, colors, and other details that are compatible with and enhance the surrounding area." She argued that the west wall of the modernist building continues to clash with the surrounding area.

"It's really just kind of a flat wall. It's a little bit of a stark contrast and I think it does a bit of a disservice to the neighborhood character on its own," Thompson said.

Gooyer agreed and noted that the board already rejected the project once, before the council effectively overruled the board and approved it. Even with the narrower purview, he said he cannot support the project.

"I don't think we're helping the community with this design," Gooyer said.

For the council, the project poses a tough dilemma. During its 2017 review, which followed two prior rejections, council members agreed that the proposed development complies with all the objective zoning criteria relating to density, height and setbacks. Even so, the project barely mustered the votes it needed for passage, and only after a threatened lawsuit. Even the five council members who supported the project -- Eric Filseth, Adrian Fine, Greg Scharff, Greg Tanaka and Cory Wolbach -- were less than thrilled about the project.

"Do I love the building? No. But the law is the law and the law doesn't say, 'You must love the building,'" Wolbach said during the Feb. 6, 2017, meeting.