LEBANON — Plans to redevelop two lots on Bank Street near Colburn Park with a total of 40 apartment units are on hold, at least temporarily, after city officials denied the development several key waivers this week.

After hearing opposition from dozens of neighbors in recent months, the Planning Board voted Monday night to reject Hanover developer Jolin Kish’s request for three waivers sought in conjunction with a proposal to construct two buildings across Bank Street from the AVA Gallery and Arts Center.

“I don’t think that this project, as it’s currently being presented to us, meets the regulations of being harmonious to the neighborhood,” Planning Board member Laurel Stavis told colleagues before they denied the waivers Monday night, in a series of votes, only one of which was unanimous.

Kish last year proposed razing a boarding house at 14 Bank St. and replacing it with a three-story apartment building containing six units.

Behind that, she hopes to build a 29-unit structure with three floors of apartments and two floors of parking.

In all, the site would have 40 units when the existing apartments at 10 Bank St. are factored in.

Two of the waivers denied Monday would have allowed Kish to reduce the amount of landscaping between the buildings, while another sought to forgo construction of a 22-foot fire lane behind the development.

City planners have said the fire lane requirement is rarely enforced for new projects, and the Lebanon Fire Department deemed that Kish’s plans adhere to existing fire codes.

But Planning Board members and residents argue the lane would help prevent fire from spreading to nearby historic properties. Sprinklers, they added, aren’t 100% effective in saving lives.

A fourth waiver that allows lights from the project to illuminate the sidewalk was approved, and the Planning Board gave Kish until October to draft changes.

Planning Board member Kathy Romano called the votes “extremely important.”

“One of the houses on this property that’s going to be demolished has been there for 150 years,” she said of the boarding house, which was built in 1848 as the residence of Lebanon merchant Colbee C. Benton. “It is very likely that whatever we end up approving for this site will be there looming over downtown Lebanon for the next 150 years.”

Dan Nash, a Lebanon-based engineer working on the project, took issue with the decision, saying it runs counter to the city’s goals of developing downtown with new housing.

He said rules requiring a fire lane were written before sprinklers, which would be installed in apartments, became commonplace.

“They wanted to make sure they had good access around the buildings when they’re fighting the fire,” he said in an interview Wednesday. “But now with sprinklers and alarms, the fire department can usually get there before too long and make sure everyone’s evacuated safely.”

Nash also took issue with the landscaping requirements, saying Lebanon’s zoning regulations allow for the property to be completely paved over.

“In my opinion, the landscaping that’s provided is essentially a gift or a benefit to the city,” he said.

The plans do an “extremely tasteful job” of making the development attractive, added Nash, who serves on the Lebanon Zoning Board.

Several neighbors disagree and have voiced their displeasure with the project during several meetings this year.

They argue the 29-unit building would loom over the neighborhood, especially the smaller apartment buildings and single-family homes on Green Street.

The building would fit within the Central Business District’s 55-foot height limit, and renderings show it would stand slightly taller than the AVA Gallery and Art Center.

The street has recently experienced a “mini-Renaissance,” with new residents moving in to raise families, resident Kathy Elfstrom wrote in a June 30 letter to the city.

“They have relocated to escape from all that Kish represents — destruction of historic buildings, gentrification, overcrowded polluting structures destroying the stability of a neighborhood — all for the sake of greed, and that is where the waivers come in,” Elfstrom wrote in a June 30 letter to the city.

Messages left for Kish on Wednesday were not returned. She has said that restoring the existing boarding house is too costly given its aging structure and past renovations, while the 29-unit building was designed to resemble old wood-framed mills that used to line the Mascoma River.

Residents also had concerns about traffic, saying cars from residents of the new units could cause slowdowns on Route 4 and endanger children who frequent the neighboring library.

A traffic report produced in June estimates the new buildings would generate an additional 19 trips during peak hours, but some have said the number would be higher considering the development calls for 84 parking spots, 77 in the parking garage and another seven outside.

The Planning Board continued its review until October. Lebanon Planning Director David Brooks said Wednesday that Kish will also be expected to prepare another traffic report before the Planning Board takes up the project again.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.