Developer Rick Caruso has reached a settlement with the neighbors of Montecito's Miramar Hotel, clearing the way for a major overhaul of the historic seaside resort. Caruso, who wants to build 192 luxury rooms, three restaurants, a spa, and beach club, had run into sizeable opposition from nearby residents, mostly over environmental issues. Last fall he threatened to call it quits and sell the property if Santa Barbara County officials didn't take action one way or another on his proposal (the county Board of Supervisors in December upheld the Montecito Planning Commission's approval the project). As part of the settlement, Caruso will work to improve drainage problems, and Montecito residents Jean and Stan Harfenist will drop their state environmental lawsuit and an appeal to the California Coastal Commission. (Business Journal, Pacific Coast Business Times)