Further blocking or resuming construction of a moderate-priced condominium tower in Kakaako called 801 South St Building B could be near, after a state judge heard new opposing arguments Friday from residents in a neighboring high-rise fighting the project, a state agency and developer Downtown Capital LLC.

Residents in the Royal Capitol Plaza condo opposing 801 South B tried to convince Circuit Court Judge Karl Sakamoto that a state permit for the tower should be invalidated to force the developer to redo the permitting process.

At the same time, the developer let the judge know that it is resolving a key issue in the case — the lack of an archaeological inventory survey — that prompted Sakamoto’s preliminary injunction halting construction four months ago.

The judge took the arguments under advisement, and a decision is expected soon.

Royal Capitol’s association of apartment owners filed its lawsuit in March against the Hawaii Community Development Authority, the state agency that permitted 801 South B in December, alleging numerous reasons why the project should not have received a permit.

Sakamoto ruled after a preliminary hearing in May that HCDA and the State Historic Preservation Division of the Department of Land and Natural Resources didn’t follow state law protecting historic places and artifacts, including Native Hawaiian burials.

The judge, however, clarified in June that the development permit was not invalidated by his ruling based on the preliminary hearing where it was argued that historic and cultural artifacts potentially could be destroyed by construction.

On Friday, Carl Varady, an attorney representing Royal Capitol owners, argued that the developer should have to restart the permitting process. "HCDA and the developer decided to take a chance and they should not be rewarded for that," he said. "The only equitable relief is to start the process over."

Lori Tanigawa, a deputy state attorney general representing HCDA, argued that past Hawaii court decisions pertaining to state historic preservation law — cases involving the city’s rail project and Kawaiaha’o Church — allow construction to resume after requirements in the law are satisfied.

A similar argument was made by Downtown Capital represented by attorney Calvert Chipchase, who also told Sakamoto that the developer has done an archaeological inventory survey that the judge previously said should have been done.

The survey, which includes underground sampling, found no burials or historic artifacts, Chipchase said.

Downtown Capital submitted the survey report to the state Historic Preservation Division, or SHPD.

According to SHPD Administrator Alan Downer, the agency received and returned a draft report to the developer for revisions. Once a completed final report is received, SHPD has 45 days in which to render an approval or denial.

Varady said that even with an approved survey Downtown Capital should have to seek a new permit that would allow the public to comment on new information in the report that wasn’t available the first time.

"What we have to this point is a hide-the-ball process in which all the facts weren’t known," he said. "The process of public comment has to be meaningful comment."