The approval will enable Sobrato to expand its mixed-use complex on Winchester at Highway 85, increasing the amount of commercial space by 40,000 square feet. Previously approved plans limited the development to 120,000 square feet of office or research and development space and 290 apartment units.

The decision also paves the way for Netflix, an online DVD rental company and the town's largest sales tax contributor, to remain in Los Gatos. The company maintains that its current space at 970 University Ave. is too small to accommodate its growth and that it will vacate the building when its lease runs out next year. Netflix employs roughly 800 people, with 150 workers at its Los Gatos headquarters, but projects that number to increase significantly over the next few years.

Netflix and Sobrato approached the town in March to ask for the expansion and for an expedited hearing process to accommodate Netflix's move, scheduled for September 2005.

Discussion regarding the modification centered on the height of the building and signage at both meetings. Netflix requested that the height of the building be increased by five and a half feet, causing planning commission and town council members to worry about the visibility of the building.

"We are sensitive to the appearance of the town," said Mayor Steve Glickman. "We are not trying to build a skyline here."

Netflix representatives said the additional height was needed to design a "green" building.

Still, the council was not convinced. Though John Shenk of Sobrato indicated that the additional height would not be noticeable to the naked eye, Councilwoman Sandy Decker said, "Five feet has a tremendous impact and is very visible."

"We can't be as flexible as we might like to be to the issue of height," said Councilman Joe Pirzynski. "We need to work diligently to the issue that height not be increased."

Bud Lortz, the town's community development director, added, "We want to probe that issue very, very hard. It's a big deal to us and it's a big deal to the town. That will be a challenging process and one we take very, very seriously."

Town council members also expressed concerns over the size of a sign bearing the company's logo, which would be visible from the nearby freeway.

"How would it be that we would even want to set initial precedence by putting a freeway sign on Highway 85? I've driven the length of it since Tuesday, absolutely incredulously realizing that there is not another sign on Highway 85," said Decker.

Decker was the only council member to vote against the project, stating that there was still time to design the building more carefully.

The planning commission voted 5 to 1 to approve the project, with Commissioner Lee Quintana dissenting. Quintana also expressed concerns regarding the project's quick turnaround.

"I just feel that the timeframe has been so compressed that we haven't had time to look at the consequences," she said.