A dispute between Cambridge neighborhood organizations and the developer for the proposed Holiday Inn on Mt. Auburn Street has been resolved by a new plan calling for a reduction in the size of the building.

The new plan calls for a nine-story building, with a small script sign on the facade. The original plan called for an 18-story building, and large identifying signs.

Although the original plan was in compliance with the zoning code, the projected height and the signs caused the Harvard Square Development Task Force and the Neighborhood Ten Association to protest construction of the motel.

Larger Restaurant

To compensate for the reduced height, Holiday Inn will be allowed to increase the ground area of the building and to construct 331 rooms instead of the 315 originally planned. In addition, space for a large restaurant has been provided for by the agreement.

The compromise was reached after months of negotiations between the neighborhood organizations and Kanavos Enterprises, the architectural firm which will develop the Holiday Inn.

Support from City

The neighborhood groups had the support of the Cambridge Planning Department, which stated in a report: "An 18-story building is inappropriate to a lower scaled residential neighborhood."

Rev. Richard Shmaruk, a member of the Harvard Square Development Task Force, said yesterday, "The plan is a product of good faith and good will on both sides. It shows that these problems can be resolved."

Robert Cicchetti, an architect with Kanavos, agreed. "The new situation is looking very favorable," he said yesterday.