Santa Barbara’s three-member Sign Committee delivered a sobering blow to the Institution Ale brewery on Tuesday, rejecting its neon sign hanging on a brick wall inside its downtown location.

Committee members said the sign is too close to the brewery’s front window and doesn’t comply with El Pueblo Viejo District design guidelines. They voted 2-1 to deny an exception for the sign, which has been in place since the brewery opened in February.

Institution Ale, owned by the family team of father Roger Smith and his sons, Shaun and Ryan, opened to great fanfare, after years of vacancy at the site, 516 State Street. It quickly gained a following, from families to millennials looking for a cool spot to grab a drink and food downtown.

An anonymous complaint prompted the city to order Institution Ale to remove the sign, saying the neon letters are too close to the front window.

The owners were flabbergasted over the city’s request, which also threatened $100 daily fees if the sign was not immediately removed. The Smiths instead decided to instead seek an exemption to allow the sign.

Since last week's Noozhawk story on the sign, some members of the public have rallied to support Institution Ale and the perceived heavy hand of government cracking down on the family-owned business.

Several people spoke in support of the business at the Sign Committee meeting.

“I have watched with joy since they have opened,” said Tamara Erickson, CEO of Hotel Santa Barbara, which is across the street. “The sign is attractive. It adds to the neighborhood. I hope they succeed.”

Bob Stout, owner of the Wildcat Lounge, said the owners are helping revitalize State Street.

“Even the venerable Pierre LaFond couldn't keep this store open,” Stout said, referring to the previous tenant. “When Institution Ale opened we saw a significant change.”

Stout said there’s less loitering in that area also because the outdoor patio area is so vibrant.

“This business has really brought attention to the area,” Stout said. “It has brought the mid-block alive.”

Committee member Bob Cunningham said the sign is “clearly advertising,” adding that he was not sure it was necessary and could not support an exception.

“When I heard about this, I was expecting something gigantic,” said committee alternate Michael Drury, who supported the exception. “I think it’s very tasteful.”

Drury said Santa Barbara needs to be more business friendly amid the current climate.

“We are in a different era of commerce,” Drury said. “I don’t think anyone 10 years ago appreciated how difficult commerce would be today. We are in a crisis situation in downtown Santa Barbara.”

There are many examples of the Sign Committee forcing businesses to redesign their signs, including the Starbucks on Carrillo Street, La Salsa in Five Points, and the former Ruby’s in Paseo Nuevo.

A stroll up downtown State Street reveals small signs with shorter letters than in Goleta, Oxnard, Santa Maria and most coastal cities.

Smith said he expected the neon sign exception to get denied at the Sign Committee, and plans to appeal the decision to the Historic Landmarks Commission and, if denied again, to the Santa Barbara City Council.

“We expected this outcome,” Smith said. “We’re just trying to find ways to attract people to this part of State Street. We think the sign is an important part our business and it is worth fighting for.”

— Noozhawk staff writer Joshua Molina can be reached at .(JavaScript must be enabled to view this email address) . Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.