The council unanimously voted to apply the recently adopted hillside-development standards to any projects without architecture and site approval from the town. The standards are intended to regulate building in the surrounding mountains, keeping the area as natural as possible. To this end, the regulations call for limiting home sizes to 6,000 square feet and home visibility to 25 percent, as well as giving more specific details on landscaping and plant selection.

Developments with architecture and site approval will be allowed to continue as planned and will not have to meet the new guidelines.

The council and the Los Gatos Planning Commission have been working on these regulations for more than two years, but developers with existing projects in the hillsides have been wary of how the standards would be applied.

In particular, developer Joe McCarthy asked the town council to exempt his 58-acre property on Foster Road from the guidelines, based on the service he has provided to the community through the project and the expense he has accumulated from the development to date. McCarthy does not have architecture and site approval on his plans from the town.

McCarthy's property is the site of the former Guadalupe College, once used as a nunnery. He bought and then tore down the college in 1998, to the satisfaction of residents who considered the college a blight on its surroundings. He plans to set aside almost half of the area for an open-space preserve and divide the remaining property into six lots for subsequent development.

Before McCarthy purchased the property, it had been abandoned for more than 30 years, serving as the proposed site of a school for Taiwanese girls, a maximum-security prison, and other outlandish developments.

Thomas O'Donnell, McCarthy's attorney, told the council last week that his client was not trying to make more money off the development. McCarthy spent $2.5 million alone just to demolish the college.

"This is not driven by profit motive," said O'Donnell. "This is about trying to break even."

Council members were not swayed by the argument. Many saw this case as the first test of the hillside-development standards and thought McCarthy should adhere to the new guidelines.

"This is a perfect example to make these guidelines work the way we built, proposed and approved them," said Councilwoman Sandy Decker. "It's to minimize the impact of building in our hillsides. If we allow this particular pristine piece of property—that we have gotten back into our own purview—to now be put up for an exemption from the guidelines we put in place, which are very fair, I think we do the community a disservice."

Others thought that the guidelines provided enough flexibility for McCarthy to ask for larger homes later in the development process.

"I look at the way our standards allow for living space with the use of basements and other areas to exceed 6,000 feet," said Councilman Mike Wasserman. "While I understand the applicant's desire to build a home in excess of this amount, there has to be a finite number somewhere."

Neighbors in the hillsides also urged the council to act with the regulations in mind. In a letter to the council, Reservoir Road resident Art Bonner wrote: "This is the first test of these new standards; we hope you don't fail it!"

Another resident told the council that although she was in favor of McCarthy's project, the hillside-development standards should come before the development.

"The council must express clearly and specifically what justifies any exceptions to the standards," said Peggy Dallas, who lives on Foster Road.