In a 1999 interview with Richard Unterberger, Sebastian explained his inspiration for this song: "I was living in his house. My wife and I were staying at his house at the time, and yes, it ('Coconut Grove') was definitely Fred (Neil)-inspired. I can tell you that, as a songwriter, the natural way that he could combine these various styles just by being who he was. It wasn't any kind of an alchemy thing of 'we're gonna pour a little of this, and a little of that.' It was just who he was. That was very inspiring. And it also was a real lesson in how to let a lyric sound like it just fell out of your mouth, like you hadn't really labored over it. Fred always had that quality about his songs, and as a songwriter - at that time, I maybe had written two songs. But I certainly was taking note of how effortless these songs sounded.
As a matter of fact, in later years, I began to get a little critical about them. And say well Jesus Christ, you had this genius two verses, why didn't you write the third verse, for god's sake? And in fact, that was the only place that I could actually say I had any influence on Fred, was that occasionally I did get up the nerve to say, gee, we're kind of going back to this first verse faster than I really feel like doing it. Couldn't we have another verse, Fred? And so that was part of the pincer movement that Felix (Pappalardi) and I were helping to apply. As I say, it was sort of on Paul Rothchild's behalf."