BENNINGTON, Vt. (AP) – Mike Bethel likes downtown Bennington. Narrow streets lined with small shops and cafes squeezed into the ground floors of historic buildings, it’s quintessential New England.

But Bethel says he doesn’t mind going out to the retail strip called Northside Drive and shopping at Wal-Mart, either.

He believes there is room for both in Bennington and is opposing Tuesday’s effort to limit the size of big-box retailers.

“We can compete with big box stores in downtown because they’re apples and oranges,” he said. “We don’t have the ambiance of Vermont out on the strip. You have the ambiance of Vermont downtown.”

Bruce Laumeister thinks otherwise.

Laumeister saw the photo-finishing business he founded in Bennington more than two decades ago blossom to 26 stores in four New England states and then shrink back to 15, mainly due to cut-rate competition from big-box retailers. He even had to close what had been his biggest store, in Keene, N.H., after big retailers came in and offered photo development below cost, just to get people in the store.

“Closing that store broke my heart,” Laumeister said.

Bennington was a center 10 years ago in the debate over Wal-Mart when the Arkansas-based retailer opened its first of what are now four Vermont stores – a fifth is under review in St. Albans – in a defunct Woolworth’s on Northside Drive.

Now round two has come to the community of about 16,000 in Vermont’s southwest corner. Voters decide Tuesday whether to back a bylaw passed by the town Select Board that would cap retailers along Northside Drive at 75,000 square feet.

The vote comes as Wal-Mart says it has outgrown the old Woolworth’s and wants to more than double in size, to 112,000 square feet.

Bennington’s debate may seem quaint in some parts of the country. In California, the question in several cities is whether to allow Wal-Mart to build what it calls Supercenters at 200,000 square feet. That’s more than four football fields of retail space.

Wal-Mart has come in for a wide range of criticisms around the country for its effects on everything from the health of other businesses in town, to the traffic its stores generate, to its role as an importer of goods formerly made in the United States, to its labor practices.

Last month, the company agreed to pay a record $11 million to settle federal allegations it used hundreds of illegal immigrants to clean the floors at its stores in 21 states.

People on both sides of the debate in Bennington insist that it’s not just about Wal-Mart. “It’s about the character of Bennington,” said Town Manager Stuart Hurd.

Wal-Mart, though, seems to be on everyone’s lips.

As far back as 1993, two years before the Bennington Wal-Mart opened, the National Trust For Historic Preservation put the entire state of Vermont on its list of the “10 most endangered places,” proclaiming that the state was endangered by a phenomenon it called “Sprawl-Mart.”

The state made the list again last year, the National Trust saying Vermont’s “special magic” of historic villages and bucolic countryside faced “an invasion of behemoth stores that could destroy much of what makes Vermont Vermont.”

The Bennington debate is being watched closely in Montpelier, where state lawmakers are considering a bill that would cap retailers at 50,000 square feet.

Alicia Romac of the pro-cap group “Citizens for a Greater Bennington” said a cap of 75,000 square feet actually could encourage a range of retailers to come to the area by ensuring that no single super store moves in. “If one store dwarfs the market and creates a monopoly situation, then other stores may feel they can’t compete and not come into Bennington,” she said.

Three other parcels on Northside Drive recently have changed hands, and cap supporters say the cap will give Bennington a say in the size of the stores expected to open there as well.

Cap supporters say the measure was discussed extensively in public hearings before being approved unanimously by the Planning Commission and Select Board.

But Jonathan Levy, whose Ohio-based firm Redstone Investments owns the Bennington property that Wal-Mart leases, says he was never notified of the bylaw while it was under consideration.

Some in town said they see a class divide, with mainly the affluent and politically liberal opposing Wal-Mart’s expansion plans. “For working-class people, they’ve got to go where there’s something that’s not as expensive,” lifelong resident Pauline Dunn said after she and her husband Leroy cast absentee ballots against the cap Monday. “Not everybody in this town is rich like some of them are.”

Select Board member and retired machinist James Gulley Sr. said he didn’t see it as a class issue. He said town officials decided to support the cap after careful study, and that the aim was to create “an equal playing field” for all retailers.

Wal-Mart has had some success in California and elsewhere defeating local officials’ efforts to limit its size by putting the issue to a referendum. Paid signature gatherers helped garner support for the petition, putting the question before voters in Bennington.

Romac says she wishes the decision had been left to the town’s elected officials. “It’s often difficult when a referendum like this is presented to the public. They don’t have the time or expertise or probably the interest in examining retail growth from the many aspects that it needs to be looked at.”

Levy said he thought a referendum was precisely the way to go. “Now we’re the bad guys because we’re trying to give the people of Bennington the opportunity to vote on this.”

The people of Bennington are exercised about the issue. “We’ve gotten more letters on this topic than any other topic in the three years I’ve been here” as editor of the Bennington Banner, said Sabina Haskell.

“I’ll say say one thing,” said Town Clerk Tim Corcoran. “There’s much more awareness of the issue now.”