The City Council voted Monday to cap the size of retail projects at 160,000 square feet, leaving the future of a proposed Wal-Mart in doubt.

The council voted, 5-2, to approve the restrictions for the gateway zoning district as the Planning Board recommended them, with Council President Jim Violette and Councilor Suzanne Joyce casting the votes against the standards.

The restrictions also contained standards for increased buffering for the surrounding neighborhood, controls on lighting and hours of operation and delivery, but the size of the store was the largest issue.

Wal-Mart has proposed building a 203,000-square-foot Supercenter on the site of the closed Saunders Brothers dowel mill. Last year, the City Council voted to change the property’s zoning from industrial to gateway, which would allow Wal-Mart to build on the site.

At the urging of Westbrook Our Home, a neighborhood group organized to fight the project, the council asked the Planning Board to come up with a series of restrictions that would be applied to large retail projects in the gateway zone. The board worked for almost a year on the standards, referring them to the council for final approval last month.

While Wal-Mart had originally proposed a 203,000-square-foot store for the site, the company had indicated they would be willing to comply with all of the restrictions as long as the store size was increased to 180,000 square feet.

Phil Serghini, Wal-Mart’s community affairs manager for the Northeast region, said Tuesday morning that the company was disappointed with the results of the vote. Serghini said he felt 180,000 square feet was a reasonable compromise that served the company’s interests while still protecting the neighbors.

Serghini said the company had not yet decided if it was going to move forward with the project at the smaller size dictated by the council’s vote. “We’ll weigh our options, but we don’t know what we’re going to do yet,” he said.

While Wal-Mart still hasn’t made a final decision, Saunders Brothers President Josh Saunders said he would be surprised if Wal-Mart proceeded with the project under the new restrictions.

Saunders said he was not sure what he would look to do with the site if Wal-Mart walked away. “I have absolutely no idea right now,” he said. “I guess we start over and see who’s interested in purchasing the site.”

Westbrook Our Home’s Eileen Shutts said after the vote she was very pleased the council elected to uphold the 160,000-square-foot limit. “I think that it really shows that they have gone out of their way to be fair to everybody,” she said. “A 160,000-square-foot limit, that’s not really much of a limit, that’s huge.”

Councilor Gary Groves said he did not think the council’s vote was a vote against Wal-Mart, he thought a 160,000-square-foot store would be economically viable for that property. “I still want to balance the needs of the neighborhood with economic development,” said Groves. “I don’t think 160,000 square feet was saying ‘no’ to anybody.”

Violette who was absent from the Aug. 1 meeting when the council voted to approve first reading of the standards, said he decided not to support them because he didn’t agree with the size limitations.

He pointed out that the nearby Westbrook Crossing shopping area has buildings totaling 195,000 square feet of retail space on 11 acres of land and to limit the development of the 27-acre Saunders property to 160,000 square feet was not fair to the developer or the landowner. “I just think we need to make this site as attractive as possible,” he said. “At 160,000 square feet, we’re going to have trouble developing that land.”

On Tuesday, Saunders echoed Violette’s sentiments, saying he thought the limitations would ultimately not be in the best interests of the neighborhood or the city as a whole. “There’s every likelihood that there’s going to be something worse here rather than better.”

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