The proposal calls for banning any retailers opening stores larger than 20,000 feet in Chinatown. The city planning commission disapproved the proposed ordinance back in July and recommended the council not adopt it.
The Los Angeles City Council voted 10-4 in favor of the moratorium on retail stores over 20,000 square feet, but the item needed 12 votes to pass because it was introduced as an emergency ordinance.
The council sought to use its power to temporarily block certain building permits in order to study the potential effects of the big-box stores on the neighborhood's character and businesses for up to two years.
The attempt was spurred by Wal-Mart Stores Inc.'s effort to open a 33,000-square-foot Wal-Mart Neighborhood Market in a space on the northwest corner of Grand and Cesar E. Chavez avenues near downtown that has been vacant for nearly 20 years.
The project stirred fears about the grocery store squeezing out small Chinese markets and business and rallied opposition from organized labor to Wal-Mart's notoriously anti-union position.
Wal-Mart received the necessary building permits in March and has been under construction since then. A coalition of labor groups has filed lawsuits and appeals to the city's Planning Department challenging the legality of the city's permitting process and public notification of Wal-Mart's permit process. A city zoning administrator heard the appeal last week and is expected to issue a ruling within 45 days.
City News Service contributed to this report.