An Orange County Superior Court judge has upheld the environmental impact report for the proposed Newport Banning Ranch development.
However, Judge Robert Becking also found that the city violated its general plan during the process of approving the project.
The judgment, which wraps up the court case unless either side appeals, echoes rulings made late last year.
City Council members will consider at their meeting Tuesday whether to amend that portion of the general plan, a guiding document for development in the city, said City Atty. Aaron Harp.
At stake is a proposal from Newport Banning Ranch LLC to convert Banning Ranch, a 400-acre piece of land in West Newport, to about 100 acres of residential, resort and commercial development plus nearly 300 acres of park and open space.
The judge agreed with the Banning Ranch Conservancy, a group that advocates for preserving the land, that the city failed to work with the California Coastal Commission to identify habitats for preservation before approving the project, as the conservancy understood the general plan to stipulate.
"If you do it right, you don't give us much room to argue it, but they didn't do it right, and the court agreed," said Steve Ray, executive director of the conservancy.
But the city — which drafted the policy — did not interpret that part of the general plan as such, Harp said.
If the council decides to amend the general plan, the Planning Commission will then need to review the change before it can return to the council for final approval.
"This is an outstanding project," Mike Mohler, the Newport Banning Ranch project manager, said in a prepared statement. "We look forward to working with the city to resolve the technical issues related to the city's general plan."
The project still awaits a decision from the Coastal Commission.