Peter Kizilos-Clift loves his home on Lake Street in Excelsior, a century-old cottage with elaborate woodwork, original brick fireplace and a wraparound porch offering sweeping views of Excelsior Bay. He’s fascinated by the home’s past, dating to when Excelsior was a thriving resort town. So last summer, he applied to have it declared a local historic landmark.

Just one problem: Kizilos-Clift only rents the house, and its owners, Carrie and Gregory Larson, want to tear it down and build their “forever home” there.

The City Council on Monday unanimously sided with the Larsons, bringing to a close the latest chapter in an ongoing local clash between those who want to preserve Excelsior’s vintage homes and residents who want to replace or remodel them to suit 21st-century lifestyles.

Council members, who said they couldn’t recall facing a similar situation, voted in support of the Larsons’ freedom to do what they wanted with their property, valued at $1.1 million. Several also said they hoped the move would encourage friendlier relations among neighbors in the city of 2,300.

“We all share this community,” said Council Member Jennifer Caron. “We’re going to see each other at events in town, we’re going to pass each other on the sidewalks, we’re going to run into each other at Kowalski’s. We all need to learn how to live together.”

The local ordinance allows anyone to nominate a house for historic designation, but doesn’t address the property owners’ preferences. Kizilos-Clift’s application had been greenlit by the State Historic Preservation Office and the local Heritage Preservation Commission (HPC), both of which determined that the Craftsman-style house met the criteria for historic designation in terms of age, architecture and other factors.

The application needed only the City Council’s approval to seal the home’s historic status. That designation wouldn’t entirely rule out a teardown, but it would make the process more complicated.

After learning about the application in August, Carrie Larson knocked on doors of nearby older homes, warning residents their house could be next. The Larsons offered to donate the house to the city if it would move it off the property.

All parties followed the law and acted in good faith, council members said Monday.

“In this whole process nobody — nobody — did anything wrong,” said Council Member Lou Dierking.

The council’s public hearing Monday was mostly polite, as council members warned speakers against name-calling and inflammatory language. A more toxic mood had prevailed at a public hearing held last month, where upset residents shouted at Kizilos-Clift.

“It was honestly scary, like a mob mentality,” he said. “The anger over the issue was directed at me personally. That was what was so upsetting. They attacked my character, how dare I do this, like I was stealing something.”

While Kizilos-Clift moved to Excelsior last year, Carrie Larson grew up in town, where her mother owned a clothing shop for several decades. The Larsons currently live in Eden Prairie, but Carrie Larson said she loves Excelsior and has always planned on retiring there.

Four years ago, over a 20th-anniversary dinner in a downtown Excelsior restaurant, Gregory Larson announced that he had purchased the house at 200 Lake St. and showed her the architectural plans for their “forever home.” They never intended the house, with 1,300 square feet and one bathroom, for themselves or their three sons.

“I’m a part of this town,” Carrie Larson said. “I walk my dog in Excelsior. I’m always there. My husband and I eat dinner there. We want to support any retail store and spend money in the town. When you grow up in retail you learn to support local businesses.”

Kizilos-Clift said Tuesday he’s glad the issue had been debated publicly, and applauded the council’s action as an example of the democratic process working as intended. He said he initiated the application “as a public service” and didn’t regret having done so, despite the criticism he received.

“I had no idea it would be this contentious,” he said. “Has it been easy? Have I enjoyed it at all? No, not a bit. It’s been very emotionally difficult and stressful.”

Although his lease runs until May, Kizilos-Clift said that he and his girlfriend, Pam Koenig, will probably start looking for another home somewhere else.

“Excelsior is not the kind of place we want to live anymore, sadly,” he said. “We have a deep sense of loss and sadness.”