Following a hearing of more than three hours, the council voted 7-1 to approve a memorandum of understanding with the Plaza de Panama Committee, a group of private citizens that intends to raise $25 million to pay for the bulk of the project.

The primary backer of the plan, Qualcomm co-founder Irwin Jacobs, said the memorandum of understanding was necessary to begin fundraising and start work on an environmental impact report.

"We need some indication that this project is acceptable to the council," said Jacobs, who has already chipped in $2 million for early studies and designs. "We need approval [from] the City Council for this MOU so that we can continue to raise donations."

Before a marathon council meeting which brought out more than 100 speakers both for and against the plan, Mayor Jerry Sanders said, "This MOU is not an approval of the project or is it a binding commitment."

While the basic concept of taking cars out of Plaza de Panama and Plaza de California gets unanimous support, details drew numerous opponents to the council meeting.

Their main objections are a bypass bridge that would be built to re-route traffic off the Laurel Street Bridge, and construction of a parking garage adjacent to the Spreckels Organ Pavilion.

They said the changes will radically change the appearance of that park entrance and be disruptive to the Alcazar Garden, concerts in the pavilion and other park activities.

Bruce Coons with the Save Our Heritage Organization, which has opposed the by-pass and parking garage option from the start, said, "What the council did was illegal so we are looking at what our legal options are."

Councilman Carl DeMaio urged the two sides to work together and hoped the concerns of the opponents could be mitigated by the time the issue returns to the panel.

"If there is still that opposition, it will raise some red flags," DeMaio said.

The environmental impact report will study alternative plans from the public, and Jacobs said the committee would back a competing proposal if it was found to be better.

Councilwoman Sherri Lightner, who cast the dissenting vote, said the council's action sent a signal that Jacobs' plan was favored over the others.

"An MOU is about the proposed project, and not so much about the alternatives," Lightner said.

The city will fund construction of the parking garage and pay back the money by charging for parking. The committee will be responsible for cost overruns, according to the memorandum of understanding.

Jacobs said he anticipates the project will be completed by December 2014, in time for the park's centennial in 2015.