Questions like how did they get to build so close to the road, I thought cutting down live oaks was illegal, how could they put that many units there …

The answers can be found in the Bar Harbor Planning Commission Staff Report. (16 page PDF)

EXISTING LAND USE: The site is developed with two small buildings, a retail store constructed in 1960 and
storage building constructed in 1930.

SURROUNDING LAND USE AND ZONING:
North: Shore Drive
Across Shore Drive are multi-family multiple storied buildings / B-4 Mixed Use (SD – Shore Drive Corridor Overlay)South: Duplex and single family dwellings / R5-D Residential (SD – Shore Drive Corridor Overlay)
East: Office building and residential / B-4 Mixed Use and R5-D Residential (SD – Shore Drive Corridor Overlay)
West: DuPont Circle
Across DuPont Circle is a restaurant and residential / B-2 Community Business and R5-D Residential (SD – Shore Drive Corridor Overlay)

NATURAL RESOURCE AND CULTURAL FEATURES:

The sandy soil on the site supports seven live oak trees. While the trees cannot be maintained the applicant can mitigate the loss with a contribution to the Live Oak Fund and by agreeing to have the logs of the trees set aside and given Friends of Live Oaks (http://www.friendsofliveoaks.org).
The Live Oak is the officially adopted tree and icon for the Shore Drive Corridor and Bayfront community.

And an excerpt:

The site design is slightly deficient with respect to setback requirements in the district. A 30-foot setback is required from the front property line (DuPont Circle), the plan depicts a 20 foot setback; a 15 foot setback is required adjacent to residential zoning (southern and eastern property lines) the plan depicts a varying setback of 5 feet to 21 feet. Staff feels the site design is consistent with other projects in the corridor and does not find the reduction in setbacks to be detrimental. Further the applicant met with adjacent property owners as well as the civic league and no objections were raised regarding the plan. The Ordinance allows that “The City Council may, for good cause shown and upon a finding that there will be no significant detrimental effects on surrounding properties, allow reasonable deviations from the following requirements otherwise applicable to the proposed development:
(1) Required setbacks;
(2) Required landscaping;
(3) Height restrictions, except as provided in Section 202(b); and (4) Minimum lot area requirements.
The applicant also met with the Bayfront Advisory Committee (BAC) on May 19, 2012. The BAC found that the project substantially complies with the Shore Drive Corridor Plan, the ULI Bayfront study, the Comprehensive Plan, and the Shore Drive Corridor Plan.
Staff finds the request acceptable and recommends approval subject to the conditions listed below…