On Feb. 12, the San Marcos Planning and Zoning Commission voted 7-2 to reapprove a conditional-use permit for Zelicks Icehouse, denying an appeal by a neighbor who complained about noise at the popular bar.

City Council must give final approval for the three-year permit. Zelicks, at 336 W. Hopkins St., had received preliminary approval of its permit Dec. 11, but neighbor Barry James and his wife, Brenda Smith, appealed because of concern over rules governing live music at the patio bar.

Seth Katz, who opened Zelicks with his brother Chase in May 2011, told commissioners that he will continue to run business as usual, while occasionally having live music.

"We have committed a lot of money towards noise negation. We have made an agreement with our neighbors about our differences. Now they have a problem when we have done absolutely nothing," Katz said. "We have done nothing but the right thing. How come there is an issue here?"

Commissioner Randy Bryan and commission Chairman Bill Taylor opposed the motion to deny the appeal.

Zelicks' permit had been on hold during a dispute with neighbors who own the Crystal River Inn. The Katz brothers came to a settlement with the bed-and-breakfast owners in December, but James and his wife were not part of the mediation process between Crystal River Inn and Zelicks.

James and Smith expressed concerns over language in the permit that says Zelicks must shut down all amplified or stereo music at 2 a.m., and no live outdoor amplified music will be allowed after 11 p.m. The couple, who own the Young Building across the street from the bar, told commissioners the live music was unpleasant to live with.

"When they had live music on Texas Independence day, every square inch of my building was shaking," Smith said. "You couldn't think, couldn't hear a TV and really couldn't work."

Mike Dillon, who owns Crystal River Inn with his wife, Kathy, said that allowing outdoor music would be disastrous to his business.

"It was not brought up originally," Dillon said. "It was not apart of the original agreement."