In this Oct. Tuesday, Oct. 31, 2017 photo, drivers round the highway curve heading into Tusayan, Ariz. The town is voting on a proposal to increase building heights that would pave the way for development at an RV park. (AP Photo/Felicia Fonseca)

FLAGSTAFF, Ariz. - Residents of a small town outside the Grand Canyon's South Rim have rejected a building height increase, but it won't stop developers from pursuing an expanse of retail shops, open space and lodging at the edge of town.

Voters in Tusayan turned down a ballot measure Tuesday to allow buildings up to 65 feet (20 metres). Of the 131 people who cast ballots, 60 supported the measure and 71 opposed it.

The result was a blow to Italy-based Stilo Development Group USA, a major landowner that has eyed development in town since the late 1980s. Now, it must work within existing height guidelines. Stilo will submit building plans for a property that now houses an RV park to town officials in the coming months, said Andy Jacobs, a company spokesman.

"What we heard from voters, and we did a lot of outreach, especially in the last couple of weeks, is they still support new opportunities, particularly housing in town," he said Wednesday. "They just weren't sure the height limit was the right way to go about it."

Opponents have said taller buildings and the scale of development don't fit a town that relies on millions of Grand Canyon tourists each year. They say Tusayan should support, not detract from the national park and were worried about effects to water, traffic and the skyline.

"I'm just really happy that it seems like the Tusayan residents care more about the Grand Canyon than fulfilling every want of the Italian developers via the Town Council," said Clarinda Vail, whose family settled the area in the 1930s.

Tusayan Mayor Craig Sanderson said late Wednesday he's disappointed in the results but the vote wouldn't hinder progress. He said the Town Council will refocus on things the community agrees on, including housing that isn't tied to employment.

"Our goal is to help businesses prosper and improve the sense of security for current and future residents and visitors," he wrote in a statement.

The election was the first using all mail-in ballots in the town that incorporated in 2010.

Stilo approached the Town Council for an ordinance to allow taller buildings after the U.S. Forest Service sent back the town's application to access two properties Stilo has tucked into federal land. The town since has hired a law firm and asked Arizona's senators for help.

The Town Council approved the request for an ordinance. Vail challenged it, leading to the vote.

Asking voters to reconsider building heights is unlikely, Jacobs said, but he didn't completely rule it out.

"I think obviously the investors and the proponents will have to sit down and figure out exactly what they want to do and make a decision at a later date," he said. "I don't think we know all the answers at this point."

Before the vote, signs had gone up around town urging voters to say yes to higher buildings to bring jobs, independence and housing to the community of about 550 people. Other signs asked voters to reject the measure to protect the Grand Canyon.

Vail said she will remain vigilant of future plans.

"I have quit guessing what these people will do," she said. "I will deal with it as it comes."

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This story has been changed to correct that the town hired a law firm, not Stilo

News from © The Associated Press, 2017