An appeals court filed a decision Thursday involving the Gaviota coast and reversing a prior victory for local environmentalists.

The decision centers on whether to annex 130 acres on the Gaviota coast, making it part of the Goleta Water District. Opponents of the annexation said it would open up the previously undeveloped area to new projects with the water availability.

Thursday’s decision reversed a decision made last year that said the annexation had expired and awarded the respondents of the lawsuit — the Gaviota Coast Conservancy and the Surfrider Foundation — $185,800 in attorney’s fees.

Santa Barbara Superior Court Judge Thomas Anderle ruled last spring that the annexation was voided, and the denied appeal comes at the end of a long and complicated history.

Instead, “we reverse the judgment and vacate the award for attorney fees. The annexation is valid,” court opinion stated from the Second District Court of Appeals in Ventura.

The property was formerly an ARCO oil and gas production facility. Makar Properties LLC, a Newport Beach-based development company, purchased the property and sought to build a golf course.

Santa Barbara County approved a conditional-use permit for the plans in 1993, which was appealed to the state Coastal Commission. The agency denied the appeal and granted the permit, but on the condition that 20 smaller lots be merged into larger ones to prevent residential development.

The environmental documents for the project stated that the Goleta Water District would be able to use potable and reclaimed water for the project. Eighty acres of the project already lie within district’s purview.

The GWD submitted an application for annexation to the Local Agency Formation Coalition.

With a misunderstanding about whether the project could move forward with or without the lot merger, the discovery of threatened red-legged frogs on the site and environmental groups claiming potential California Environmental Quality Act violations, the project slowed to a halt as it worked through its legal challenges.

LAFCO approved annexation of the property in 1998, but it never made the lot merger a condition for annexation because “the recommendation was unworkable,” according to the court document.

The property owner “needed water to commence construction. Until the certificate of completion was recorded, it could not proceed with the golf links project. Delaying recordation of the certificate of completion created a chicken-egg conundrum. Had LAFCO imposed a lot merger condition as recommended by staff, it would have trumped Coastal Commission approval of the project, which deferred merger of the 20-plus lots until after the golf course was built,” the documents said.

In 2008, LAFCO determined that all annexation conditions were satisfied, and because it’s a quasi-legislative agency interpreting its own resolution, LAFCO’s decision is entitled to judicial deference, the report said.

In the meantime, the golf course plan was put on hold, and an alternative plan for two single-family homes on two of the parcels was proposed. GWD said Makar could do that without an amendment to the water-use agreement.

Respondents went on to say that Makar’s proposal to build the two homes was a new project that required county review. But the ruling said that LAFCO has no authority to reopen an annexation that had already been approved.

LAFCO’s Bob Braitman said Thursday that the agency will be looking at the matter at its June 3 meeting, which will be held in closed session.

“We’ll know by then whether anyone has decided to appeal,” he said.

Braitman seemed positive about the court’s decision. “They basically said that LAFCO made the right decision in approving the annexation,” he said.

Attorney Marc Chytilo, representing the Gaviota Coast Conservancy, said the group was disappointed to see the court’s analysis Thursday.

Chytilo also disapproved of the water use, once for golf courses, now going toward residences, and said it signified approval of water for “McMansions on agricultural land.”

He said the group was still analyzing the briefing and had not yet decided whether to appeal to the state Supreme Court. That decision will be made in the near future, he said.

In the meantime, the residential project still “has a number of hurdles before it,” he said.

The county is reviewing comment for the draft environmental impact report, and then it will have to be approved by the Planning Commission, the Board of Supervisors and the Coastal Commission.

“It’s hard to take their commitment to ag land seriously,” Chytilo said of LAFCO. “They’ve indicated they’re willing to give away the Gaviota coast because there’s some money involved.”

— Noozhawk staff writer Lara Cooper can be reached at lcooper@noozhawk.com.