A split Petaluma City Council late Monday asked city staff to return with a revised sign ordinance that would allow "tasteful" freeway-oriented signs.

The council took up the issue after developer Regency Centers sought an exception to an existing ordinance that prohibits freeway-facing signs.

East Washington Place, at 34acres and 378,000 square feet of retail space, will be the city's largest shopping center once it's built. Construction is in its early stages now along East Washington and Highway 101.

In a 3-2 vote, the council approved the developer's request to move a 30-foot sign to the middle of the project, on Kenilworth Drive in the middle of the center. Regency appealed a Planning Commission requirement to move the sign to the southern end of the center.

Regency also appealed the commission's denial of freeway-facing signs on the back sides of retailers planned for the center — Target, TJ Maxx, Sprouts grocery store and Dick's Sporting Goods, ULTA Cosmetics and others.

The city's existing sign ordinance prohibits signs or advertising structures designed to be viewed primarily from the freeway or ramps. But there are plenty of exceptions, including newer structures along the northern end of the city and in the auto mall.

Regency spokesman Ryan Nickelson told the council the signs would be lit with white light from behind, creating a soft, halo effect he promised would be attractive.

While Councilwomen Teresa Barrett and Tiffany Renee opposed the request, Councilman Mike Healy suggested the city and retailers could all win with rewrites to two portions of the sign ordinance. Councilmen Mike Harris and Chris Albertson agreed.

Mayor David Glass recused himself because he owns a large amount of Target stock and Councilman Gabe Kearney was absent.

Nickelson said he needed to provide "maximum identity" to tenants with freeway-oriented signs on the buildings' rear walls.

"These are not big, bright, showy, individually lit signs," he said.

The council asked staff to return within two months with a modified section of the sign ordinance that would allow Regency and other businesses to seek freeway-facing signs. The change would also allow the Planning Commission to require improvements to the backs of buildings at the same time.

Regency's appeal sparked dueling letters from law firms representing Regency and the Petaluma Community Coalition, who both sued the city in 2010 amid the planning process for the shopping center.

Regency ended up paying the two leaders of the coalition $100,000 plus $50,000 for their legal fees, and another $32,000 for the city's legal fees, in exchange for the group promising not to oppose the project<NO1><NO>.

The coalition letter "respectfully urges the council to give careful consideration" before approving the freeway-facing signs

Regency lawyers say the coalition's letter violates their agreement, which allowed the city to move forward with the center. They called the letter a "thinly veiled opposition," which the settlement expressly prohibits.