The Battle for Santa Barbara; In July, nine top staffers quit the Santa Barbara News-Press, accusing its latest owner, strong-willed millionaire Wendy McCaw, of taking too personal an interest in stories involving actor Rob Lowe, local officials, and the California Coastal Commission.

Byline: Michael Shnayerson

Wendy McCaw was on her l93-foot yacht, Calixe, in the glassy Adriatic, with Michael Douglas and Catherine Zeta-Jones, when the storm broke back home in Santa Barbara, California.

While McCaw, ex-wife of billionaire cell-phone entrepreneur Craig McCaw, lounged on deck, editors and writers rebelled at her daily newspaper, the venerable Santa Barbara News-Press. They were furious she'd put the paper's widely disliked editorial-page editor in charge of the news while she was gone. The wall between editorials and news-inviolate at any serious newspaper-had been crumbling for months, ever since McCaw had anointed herself co-publisher. Now they felt it was smashed, and with it the paper's integrity. When nine top editors and writers walked out in early July, l50 newspapers around the world covered the story. But not the News-Press: the story written by one of its remaining staffers was killed. And now many in the community were up in arms.

Santa Barbara is still the lovely seaside town it was a century ago, its Spanish missions nestled in the gentle foothills of the Santa Ynez Mountains. From its downtown hub of historic buildings, whitewashed with red tile roofs, some of the loveliest lanes in America twist and turn uphill, overhung with eucalyptus and cypress and massive oaks. Here, in stately homes set off by low brick walls, hardworking celebrities kick back. Among the actors are Brad Pitt, Jeff Bridges, Kevin Costner, Julia Louis-Dreyfus, and John Cleese, along with directors James Cameron and Ivan Reitman. Here, too, are aging musicians Kenny Loggins, David Crosby, and Jackson Browne.

Yet, languid as it seems, Santa Barbara simmers with tension. Rich new arrivals are building McMansions, supplanting simple, more traditional houses. In neighboring Montecito, Ty Warner, the billionaire creator of Beanie Babies, is building a 15,000-square-foot estate which will include a lake and thematic gardens. Oprah's Tara II, on 42 acres, is bigger than many French ch,teaux. Working people, from firemen to journalists, struggle to stay on as real-estate prices soar. That's the subtext to what locals are calling the Santa Barbara News-Press mess.

Compared to some of the area's new estates, Wendy McCaw's 25-acre oceanfront home might be deemed modest. But her ambitions most certainly are not. The multi-millionaire has made a blunt bid to dominate the local media, buying not just the News-Press but other local publications, even having editorial input over a local radio station.

In the weeks since the walkout, the 55-year-old McCaw has become a figure of national attention. And that, it's safe to say, is not what she planned when she moved to Santa Barbara permanently a decade or so ago. She was fresh from her bitter divorce, involving one of the largest settlements ever, in which her lawyers battled her husband of 22 years and forced him to part with a reported $500 million. The McCaws had met in 1970 as students at Stanford, where Wendy had helped her dyslexic boyfriend through college. In her version, the two then worked as full-time partners building McCaw's cell-phone empire, McCaw Cellular Communications, now part of Cingular. (In the divorce proceedings, her husband expressed a somewhat different view.) "I earned every penny," she said of her settlement to one of her Santa Barbara architects over dinner one night on her yacht. Later, the two sued each other, the architect claiming that she failed to pay him and McCaw accusing him of breach of contract and negligence. As the architect learned after having to settle with her, McCaw is not shy about spending money to explore legal options.

A vegetarian and animal-lover, McCaw adopts not just cats but donkeys. She is a registered Libertarian. She has a passion for renovating historic buildings, and so her $9.1 million estate, with its 20,000-square-foot Spanish-mission-style main house and stables, built in the l930s, presented a perfect postmarital project. The only problem was that occasionally a stroller or jogger would cross her desolate, windblown stretch …