Scaled-Down Farmers Market Plan OKd : Development: City Council approves a shopping center proposal that preserves the historic open-air market.

After five years of controversy, the City Council voted Friday to allow the owners of the Farmers Market to build a shopping center in the heart of the heavily congested Fairfax District.

The 12-1 vote means that the A. F. Gilmore Co., which has operated an oil company, a midget auto racing track and a minor league baseball field at the site, can go ahead with plans to build 700,000 square feet of shops, restaurants, department stores and housing for senior citizens.

The council rejected the company’s request to add a 300-room hotel and 150,000-square-foot office building.

Plans call for the historic open-air market to be retained at the 31-acre parcel near Fairfax Avenue and 3rd Street, one of the largest parcels of undeveloped land on the Westside. Some neighborhood groups joined with Councilman Zev Yaroslavsky in opposing the project, saying traffic would increase the character of the neighborhood would change. The Fairfax District, long the center of the city’s Jewish community, is home to thousands of low-income elderly people who patronize Fairfax Avenue’s ethnic businesses and shops.

“The density of this project is very low, but its overall impact on traffic is very high,” said Yaroslavsky, who represents a nearby residential area.

But City Council President John Ferraro, whose district includes Farmers Market, said the developers have already reduced the project size by 55%, and that its impact would be further reduced by a long list of conditions drawn up by city planning officials.

Plans call for the May Co. to close its existing store at the nearby corner of Fairfax Avenue and Wilshire Boulevard when it opens a new one at the Farmers Market. Nordstrom also plans to open a store in the complex.

“The Farmers Market attracts over 6 million people a year. It is one of the major attractions in Southern California, and we want to keep it there,” Ferraro said.

“This project holds the promise of the rejuvenation of our community,” added Harald R. Hahn, president of the Burton Way Homeowners Assn., one of several local groups that supported Ferraro’s position.

Despite the current economic slowdown, Henry L. Hilty Jr., president of the family-owned Gilmore Co., said he and his partners, the Chicago-based JMB/Urban Development Co., plan to go ahead with the project, which has been on the drawing boards for more than five years.

“If all goes well, we don’t plan to be opening our doors before the middle of 1994, and that’s a long time,” Hilty said after the council’s vote. “Economic cycles come and go.”

Oscar Reid, executive vice president of JMB/Urban, said his firm is hesitating on some projects, “but not this one.” JMB/Urban is one of the country’s largest real estate development firms.

Now that the City Council has approved the project, the only remaining obstacle would be a lawsuit that opponents might file to argue that the environmental impact report already submitted does not accurately describe the project’s drawbacks.

When one speaker said there was a “viable basis for legal action,” Ferraro dared opponents to sue, saying, “Take it to court. We’re running out of time.”

Mayor Tom Bradley is not required to approve the council’s action.

After a four-day conference last year, a Bradley-sponsored urban design workshop recommended against the construction of a regional shopping mall at Farmers Market.

But Jane Blumenfeld, the mayor’s planning aide, said Friday that she was pleased with the final design.