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Sheep still graze across the street from Cotati City Hall. Bars and funky shops still outnumber fast-food joints.

And the golden arches have yet to cast a shadow in town.

But change is in the air in fiercely independent Cotati. A big-box home improvement store opened earlier this year. And Starbucks is on the way.

It's enough to cause some in the town of 7,400 with a tie-dyed past to shake their heads.

"It used to be you knew right away when you crossed the border into Cotati," said Jim Barrett, a local lawyer and former city councilman who first arrived in 1973. "But the borders are getting fuzzier."

The notion that time - and commercial development - might be catching up with Cotati created a buzz this week after City Council members rejected a measure to ban "formula" chain stores.

Some residents and small-business owners called on the council to enact the prohibition for fear that the Starbucks outlet - the city's first - was a bellwether for more cookie-cutter projects to come.

They pointed to neighboring Rohnert Park with its forest of commercial neon.

"We're different," said Earl Joslin, who was practicing trumpet on Old Redwood Highway. "We seek the rural life while Rohnert Park is trying to surround us."

People like Barbara Iannoli, who co-owns a bookstore and coffee shop in the shopping center where Starbucks is going, said chain stores have the potential to ruin the charming town she came to from San Francisco's Haight-Ashbury district in the 1960s.

"It's a true small town," Iannoli said. "It's got that feeling: It's a little bit funky. It's a little bit wonderful."

"Funky" was a word that resonated with Trey Standing Elk, a smoke shop clerk across town.

"Cotati's freaky, man," said the aspiring country musician, who stood near a shelf of glass water pipes and novelty T-shirts. "It's always had this funky, dusty old soul."

Louis Doss, a retired teacher, said the proximity of Sonoma State University gave the town a different vibe.

"It's an intellectual community," said Doss, playing chess outside a downtown store.

Whatever the label, residents have proved they are willing to fight to keep national stores and even high-tech manufacturers from expanding in Cotati.

Residents fought over a Hewlett-Packard development proposal in the 1970s and adopted an initiative limiting the size of stores in 1997 when American Stores, then the nation's largest supermarket chain, wanted to come to town.

Cotati voters went to the polls twice during a protracted battle over the Lowe's home improvement store that opened this spring.

A new front emerged when Starbucks said it would lease space in the all-independent Rancho Cotati shopping center.

City officials drafted a moratorium that could have blocked the Seattle giant and many other types of stores.

But council members decided the measure could discourage an economic boom and rejected it.

Not everyone was disappointed.

"I'm actually kind of happy about Starbucks," said Brian Wing, a systems administrator who lives on the border of Cotati and Rohnert Park. "Honestly, Cotati needs the revenue."

Even Barrett, the lawyer, said it wasn't the worst thing that could happen.

"Cotati still has a 'there there,'" he said, sipping a drink after work at the Tradewinds bar and quoting author Gertrude Stein.

Others said it doesn't bode well for a small town wanting to stay small. But the town hasn't lost its fight.

"People who live here are special," Iannoli said. "They will fight, they will put their hearts on the line, to keep this town home."

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