When the Larchmont Bungalow opened a couple of weeks ago, the "Artisan Cafe, Bakery and Brew" coffeehouse seemed a perfect fit for the tony neighborhood, with its exposed wooden beams, reconditioned hardwood floors and roasting coffee wafting through the airy space.

But there was just one problem -- and it had everything to do with the chairs and tables where patrons sat, drank coffee and noshed on offerings such as red velvet pancakes and jerk chicken sliders.

Those chairs and tables, contended a group of residents, threatened the very fabric of Larchmont Village because they transformed what had been permitted as a takeout restaurant into something vastly different.

Because the business offered patrons a place to sit and eat, they said, it knowingly violated a series of long-standing ordinances for the neighborhood known as "Q conditions," which among other things limit the number of restaurants in the shopping district. Plans for the business showed retail and a bakery -- but not tables and chairs.

The controversy underscores a long-simmering battle on the boulevard that Councilman Tom LaBonge, who represents the area, calls "our American Main Street."

On the one side, longtime business owners and residents say they are worried about the fabric of the neighborhood, which has lost long-standing businesses over the last few years as developers have swooped in to buy property along the street.

On the other are the owners of the Bungalow, including one of those developers. They say they are trying to create a cozy neighborhood spot but have been flummoxed by rules that are arcane and confusing.

"We are not looking to pick apart the street," said Ken Bernard, a partner in Larchmont Bungalow, along with Jonathan Ahrom and developer Albert Mizrahi. "We want to restore and preserve the neighborhood."

Mizrahi, who owns four buildings along the boulevard, said he invested in the restaurant -- and a nearby yogurt store under construction -- after being unable to attract clothing retailers in the midst of the economic downturn. A native Angeleno, he said he was charmed by Larchmont, and its customers.

"I saw this as the neighborhood's living room," he said. "I only have the best interests for the street."

But longtime business owners say that isn't so. They say he has drastically raised rents on many of his tenants, forcing them out of business -- which, as the downturn kicked in, left the street with glaring vacancies.