Council members voted 3-2 to lift the moratorium preventing personal-service establishments from operating in ground-level storefronts in the central business district, while also introducing conditional-use permits in the district.

The moratorium was first imposed in September 2003 and covers the area that includes the south end of Highway 9 along N. Santa Cruz Avenue and Main Street.

According to the director of community development, Bud Lortz, those wishing to open a business categorized as being personal service-oriented, such as hair and nail salons, would have to apply for a CUP, which costs about $3,800.

"The use-permit approach to regulating personal-service businesses gives us a lot of flexibility," Lortz said. "Each applicant would be reviewed on a case-by-case basis."

Lortz added that CUPs, which have applied to restaurants and chain stores in the past, have proven to be successful thus far and would be a "control mechanism for other business," such as tattoo and piercing establishments.

Council members Sandy Decker, Mike Wasserman and Joe Pirzynski said they agreed CUPs would be a good option.

"This is not about control," Decker said. "This is about balance."

Permits may make it difficult for potential tenants to move into the downtown area, but Pirzynski said that is the point.

"It should be difficult if we do have a saturation problem, given that there are opportunities outside of the downtown area," he said.

However, Mayor Steve Glickman and Councilwoman Diane McNutt said that although they are all for protecting the downtown area, they see no reason yet to approve the ordinance.

"I'm not convinced we're at a saturation point," McNutt said. "I'm weary of us trying to act as mall managers."

As an alternative, McNutt said, she would rather have regular conversations with merchants to discuss ways to improve the downtown area.

That's an idea Mindy O'Toole, owner of Priorities Salon on N. Santa Cruz Avenue, said she can go with.

"There's enough good salons around here," O'Toole said. "Let's concentrate on making them better."

John Lochner, property owner in Village Lane, said he is opposed to the idea of having conditional-use permits. He said that most of those who are in the business are single parents, mothers and minorities "trying to scrape out a descent living." With a $3,800 fee required, it would be almost impossible for such individuals to even get started.

Lochner also said he is disappointed that the council did not exempt Village Lane in the ordinance. Although conditional-use permits would allow for the possibility of having a personal-service business move in, he said that the tenant would still have to go through a lengthy process to get approved—or not.

According to Lortz, there are more than 50 salons, spas and barbershops in the central business district and more than 150 business licenses issued. If more come in, Decker said, that could add to the parking problem, based on what she's observed so far.

"Cars seem to sit, saturate and collect," she says.

However, Glickman said that he would rather see a parking problem than not because it shows that people are coming to the downtown area.

Steve Walrath, co-owner of Ford Cleaners, had some solutions of his own—to have a fixed number of businesses allowed in the area.

"The town should allow businesses to come in based on percentages, whether it be a nail salon or a dry cleaner," he said. "This would be fair to everybody."

For Sharon DeLacy, owner of Natural Creations, personal-service businesses "don't add to the charm" of downtown Los Gatos. Instead of the conditional-use permits, she said she would rather keep the moratorium.

"It's safer," she said. "It's less personal and political."

However, as a former landlord, she said she understands why some people would oppose the permits.

"It would take the power away from landlords," she said. "I wouldn't want the town to decide who could and couldn't rent my space."

The issue will go back to the council at the May 17 meeting.

In a separate agenda item, council members voted 3-1, with one abstention, to approve an ordinance authorizing Sobrato Development Company to construct an additional 40,000 square feet for a building at 14300 Winchester Blvd., supposedly designated for Netflix, despite some concern regarding the verbiage.

Netflix is not mentioned in the ordinance, which means that if the corporation backs out of the agreement with the developer, John Sobrato, another company could move in.

Decker voted against approving the ordinance.

"I only approved the additional 40,000 square feet because we believed we were going to get Netflix," she said.

Wasserman, who approved the additional 40,000 square feet at an earlier meeting, abstained from voting because he said he did not feel right if Netflix was not mentioned in the ordinance.

"If we approve this, we're approving the unknown," he said. "What scares me with this is that if the Netflix deal falls through, the applicant Sobrato will have the ability to build the 160,000 square feet, or another entity could move in with a sales tax revenue of $100 a year."

He added that if the council decides to redo the ordinance to include Netflix, then it would be a win-win situation.

"If Netflix signs the deal—great. If Netflix doesn't sign the deal, then the applicant Sobrato gets what they want, which is 120,000 square feet."

But Pirzynski pushed for the approval of the ordinance and stated that there are no guarantees as to who will move into the building.

"The language is realistic," he said. "We have a project that we can be proud of no matter who the tenants are."

In response to Wasserman and Decker's concerns, town attorney Orry Korb recommended that the ordinance be worded without the mention of Netflix for flexibility reasons.

The ordinance will be in effect 30 days after its adoption.