The developer of Koa Ridge, a planned community with 5,000 homes between Waipio and Mililani, was dealt a major setback today by a Circuit Court judge who said the project’s approval in October by the state Land Use Commission was invalid.

The ruling was a victory for the Sierra Club’s Hawaii Chapter over Castle & Cooke Homes, though the developer is clinging to some hope that a last-minute argument raised by an attorney representing the Land Use Commission could restore the project’s approval.

The Sierra Club filed an appeal with Circuit Court in November challenging the Oct. 15 decision by the Land Use Commission to reclassify 576 acres of agriculture land in Central Oahu for an initial 3,500-home phase of Koa Ridge and conditionally approve a second phase with 1,500 homes on another 192 acres of agriculture land nearby.

The environmental organization argued that the LUC decision did not receive the necessary number of votes for approval because Duane Kanuha was ineligible to serve as a commissioner.

LUC rules require that six of the nine commissioners must vote "yes" for land to be reclassified for a different use. The vote was 6-0 in favor of urbanizing the Koa Ridge site, with three members excused. Kanuha cast one of the six votes.

Kanuha’s four-year term as the Big Island commissioner ended June 30, 2009, and the state Senate rejected his reappointment for a second term on April 26, 2010. He remained on the commission as a holdover member by Gov. Linda Lingle until earlier this year.

Circuit Judge Karl Sakamoto ruled that the Senate’s rejection of Kanuha disqualified him from serving as a holdover commissioner.

However, Russell Suzuki, first deputy attorney general representing the LUC, argued that the commission’s approval should stand because the disqualification of someone holding public office, such as a LUC commissioner, should be determined under a different section of Hawaii law that would preclude the Sierra Club from challenging Kanuha’s disqualification.

Judge Sakamoto said other parties needed time to respond to Suzuki’s argument, and scheduled a hearing on the issue for Aug. 24.