A controversial 26-storey condo development planned for the Don Mills area of Toronto is on hold after city council voted down a proposal by Cadillac Fairview Thursday evening.

The company wants to build two new residential towers in the Don Mills Road and Lawrence Avenue area. The developers had hoped to make the project more appealing by offering to contribute $17 million for a new neighbourhood community centre, but area residents were divided on whether the towers should be approved.

Terry West, a local resident who heads Don Mills Residents Inc., said a new community centre would be an important addition to the neighbourhood.

"Don Mills has been without a community centre for many, many years," West said. "We did a survey of our coummunity and people wanted a swimming pool, they wanted an audtiorium."

But city staff told council that the 26-storey proposal far exceeds the eight-storey maximum outlined in the local plan.

Simone Gabbay, who heads the Friends of Don Mills, said she didn't like the proposal. "We should listen to these experts, and put the brakes on this," Gabbay said.

Coun. Denzil Minnan-Wong told CBC News that if council had accepted the proposal, it would have changed the complexion of the neighbourhood, which is a mix of low-rise and mid-rise housing.

"It's a choice between 26-storey buildings and the future for large buildings, tall and dense, to come into the Don Mills area and turn this area into a tall building district for the price of a community centre," Minnan-Wong said.

A lawyer for Cadillac-Fairview said they will appeal the decision. The Ontario Municipal Board will hear arguments for both sides next spring.