The proposed 580-home San Luis Ranch development off Madonna Road and Highway 101 in south San Luis Obispo may be headed to approval, judging from the comments of City Council members Wednesday night.

In front of a packed audience at City Hall, the council generally supported the project that would develop 40 acres of the 131-acre site for housing and set aside nearly half the total space — 60 acres —for organic farming and open space. Anyone who wants to buy a home must already live or work in the city to have first dibs.

The project also calls for a 200-room hotel, about 200,000 square feet of commercial space and 150,000 square feet of office space.

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