Heat a heavy, oven-safe pot over medium-high heat. Add the chopped bacon and cook, until crisp, for about 8 minutes.
Add the onions and garlic, and saute until the onions are translucent, about 5 minutes.
Add the water, tomato sauce, brown sugar, vinegar, Italian seasoning, red pepper flakes, salt, and pepper and stir to combine. Add the beans, stir into the mixture and bring the beans to a low simmer.
In a hurry? Skip the baking step and simmer the beans on medium-low heat for 20 minutes.
Bake:
Transfer to the oven and bake, uncovered, until the bean mixture bubbles and thickens slightly, stirring occasionally, about 30 minutes. Remove from the oven and serve.