Mar. 30--The Monterey Bay Shores Resort project may have been declared dead several times, but developer Ed Ghandour isn't lying down just yet. 

Plans for the 495-unit resort hotel in Sand City may have been resurrected after the San Francisco Superior Court ruled that Ghandour's lawsuit against the state Coastal Commission can go to trial. If the court orders the state to compensate Ghandour for refusing to allow his project to move forward, it would amount to an unusual if not unprecedented move in land-use law. 

Developers and would-be developers frequently argue that government agencies should be forced to pay if they refuse to allow development on a certain parcel, but the courts have rarely backed up that position, saying that doing so would undermine land-use planning efforts. 

Ghandour said Friday that he was elated about the San Francisco Superior Court's decision to let him proceed to trial. The court's decision was the result of hearings held in January and August, but it wasn't announced until this week. 

"With the recent favorable ruling of the court, it signals that the court does not view with favor the actions of the Coastal Commission and the state," Ghandour said. 

Coastal Commission officials could not be reached for comment Thursday or Friday. 

In 2000, the commission voted unanimously to turn down the proposal by Ghandour's Santa Rosa company, Security National Guaranty, to build the project that would have put a series of buildings four to seven stories high on an eroded piece of shoreline along Highway 1. 

The commission cited 19 violations of the city's coastal plan and clear inconsistencies with the state Coastal Act, most of them pertaining to the sensitive environment in the sand dunes, impacts on bay views, lack of water permits and the impact of adding about 5,000 vehicles a day to the already-congested interchange of Fremont Boulevard and Highway 1. 

Security National Guaranty sued the commission in November, saying it had violated a 1996 agreement between Sand City, the state parks department and the Monterey Peninsula Regional Park District. The agreement required Sand City to set aside 80 percent of its coastal land for preservation in exchange for allowing development on the rest, according to court documents. Ghandour acquired the 32-acre Monterey Bay Shores site in 1997 for more than $6 million. He redesigned the hotel plan when the previous developer bailed out after years of lawsuits over the site. 

Sand City finally approved the resort project in 1998. Environmentalists then appealed to the commission, which then designated the Monterey Bay Shores site an "environmentally sensitive habitat area," and turned down the proposal. 

Ghandour argues in his lawsuit that the commission's action unfairly keeps him from using the property productively. He wants a court to either order the commission to let him develop or order the state to compensate him. 

The Coastal Commission is being represented by the state Attorney General's Office. Ghandour's company is being represented by the San Francisco law firm of Sheppard, Mullin, Richter and Hampton, and the Los Angeles law firm of Berger and Norton. Berger and Norton lawyer Craig Collins said the court will now decide whether the Coastal Commission erred in denying Ghandour a use permit. 

Collins said if the court orders the state to pay Ghandour, that would be unusual. He said it's rare for courts to order developers to be compensated by the state for land they can't use. 

Ghandour is also suing the Monterey Peninsula Water Management District, which has rejected the resort project three times, fearing the hotel-condo complex would threaten the Seaside aquifer with seawater intrusion. 

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(c) 2002, Monterey County Herald, Calif. Distributed by Knight Ridder/Tribune Business News.