The six Planning Commissioners expressed general support for the project but promised neighbors that their worries about traffic, noise and parking would be covered in a environmental report about the $30 million to $40 million project.

Thursday's three-hour meeting outlined which potential environmental impacts should be studied. Twenty members of the public spoke and they were about evenly divided on the merits of Cottage's plan.

The commissioners' praise illustrated the city's strong interest in embracing housing for families who earn between $62,000 and $122,000 a year, not enough to buy a market-rate home in Santa Barbara but too much to qualified for low-income housing.

While commissioners have expressed some public frustration over Cottage's other major project - its $400 million rebuilding of its hospital - the housing project appears to have their support.

Cottage officials plan to build 115 units - 81 of them to be sold at below-market rates - for their workers. Hospital officials say that many of their workers, primarily nurses, can't afford to buy a home in Santa Barbara, where the median home price is more than $1 million.

"The concept of a major employer taking advantage of an opportunity like this is just phenomenal," said Commissioner Grant House.

Cottage has assembled a strong team of city power brokers to steer the project through the planning process. At the meeting, Cottage Chief Executive Officer Ron Werft sat in the front row with one of Cottage's attorneys, Doug Fell, and former St Francis Administrator Ron Biscaro.

Behind Mr. Werft was project architect Brian Cearnal, and a few rows back was Marshall Rose, executive director of the Downtown Organization and chairman of the Cottage's Housing Task Force. And taking notes in the back row was Dave Davis, a consultant hired by Cottage, and the city's former community development director.

The clear theme expressed by commissioners throughout the meeting was that the project was a good one, but the environmental report should look at impacts related to construction, noise, traffic, parking and long-term circulation patterns.

"It's a wonderful opportunity the city has," said Commissioner Harwood "Beady" White. "I truly appreciate what you are doing."

Cottage Health System purchased St Francis Medical Center for about $18 million last year. The project comes while Cottage is planning to rebuild its hospital on Pueblo Street at a cost of nearly $400 million. The hospital will use reserves, money from its foundation, a private bond and community donations to pay for that project. The hospital's foundation will pay for the work force housing development.

Cottage held four neighborhood meetings during the past few months to talk about the condominium plan. Thursday's Planning Commission crowd was smaller, perhaps because the hearing was held during the workday, and more subdued. Nurses spoke in favor of the project, and some residents said it was simply not the right location for 115 condos.

"Walk around the area and see how congested it is," said nearby resident Stephen Fountain. "We don't need any more traffic. Find another place. It's really, really crowded. It will be a significant impact."

Others praised the project Cardiology nurse Colleen Wheeler told the commissioners that she's the first person you want to see if you have a heart attack, prompting commission chairman Jonathan Maguire to quip, "Let's hope none of us see you at work."

Ms. Wheeler said she works hard and it's important that nurses and other essential workers own property in the community where they live.

"If I can't afford to get something in Santa Barbara in the next two years, I am going to have to go back to Los Angeles," she said.

Some of the commissioners urge Cottage to require workers to use shuttle bus between home and work. Other commissioners asked Cottage to consider reusing some of the St. Francis buildings, rather than demolishing them - but acknowledged that saving the buildings would be more expensive.

The commissioners also asked that Cottage mix the below-market condos with the market-rate condos so that that no one would feel isolated. Commissioners stressed that the design should blend with the neighborhood.

"I think the neighborhood is going to be blessed by having this community there," said Commissioner Charmaine Jacobs.