A San Luis Obispo Superior Court judge struck down plans for a 98-home development proposed for a local beach town on Tuesday.

About three decades ago, the Anastasi Co. applied to divide an almost 20-acre property into 100 lots on Pecho Road in Los Osos, according to court documents.

In 1991, the county approved a tentative tract map for the housing development with two conditions: that construction would wait until the project could connect to a community-wide sewer system and the applicant could demonstrate an adequate water supply for the development.

Then, in October 2023, the San Luis Obispo County Board of Supervisors approved a final tract map to subdivide the property — before new developments were authorized to connect to the Los Osos Water Recycling Facility.

Approving the final map without sewer connections violated the terms of the tentative map and therefore the Subdivision Map Act, San Luis Obispo Superior Court Judge Craig van Rooyen said in his ruling.

On Tuesday, van Rooyen ordered the county to cancel its approval of the map.

Now, the Anastasi Co. must re-apply to the county in order to proceed with the project.

Los Osos Sustainability Group Chair Patrick McGibney said he felt both “vindicated” and “cautious” that the judge ruled against the development.

“We’ll just have to see where it goes,” he said, noting that the county or Anastasi could appeal the decision.

San Luis Obispo County Counsel Jon Ansolabehere said the county doesn’t plan to appeal the decision, but the property owner could still chose that option.

“We respectfully disagree with the court’s ruling but will comply with any further court orders,” Ansolabehere said in an emailed statement.

A delayed development canceled

The county approved a tentative tract map for the Anastasi development in 1991, while Los Osos was scrambling to address nitrate and chloride contamination in its groundwater basin.

During the 1970s and ‘80s, poorly designed septic systems leaked nitrates into the community’s only groundwater supply: the Los Osos groundwater basin. The SLO County Regional Water Quality Control Board banned Los Osos from installing new septic systems in 1988, essentially placing the community under a building moratorium.

The Department of Water Resources later designated the Los Osos Area Groundwater Basin as “critically overdrafted,” according to a 2020 map its website.

The Los Osos Water Recycling Facility became fully operational in 2016, but the California Coastal Commission still prohibited new development from connecting to the facility until the county set rules for managing the water supply and protecting sensitive habitats.

Tentative maps, like the one approved for the Anastasi development, are valid for two years with a limited number of extensions allowed, according to the Subdivision Map Act.

While working with the Coastal Commission on a water and habitat management plan, the county extended the map’s deadline as many times as it could before reaching a “a hard, non-extendable deadline” of Dec. 14, 2023, a court document said.

A county staff report at the time admitted that “sewer service is physically available, however, it is not presently legally available,” the court document said.

So, on Oct. 31, 2023, the San Luis Obispo County Board of Supervisors approved a final map with restrictive covenants that required sewer hookups to be available before building began.

The county and developer said the restrictive covenants counted as “substantial compliance” with the tentative map’s conditions, the court document said.

The California Coastal Commission then approved the Los Osos Community Plan on June 13, which set those water and habitat management rules and allows up to 1% growth for new residential developments annually — offering the opportunity for the Anastasi development to hook up to the sewer system.

The defendants argued that “since the county bet correctly that the Coastal Commission would lift the final barrier to sewer plant connections, no harm was done and the dispute is moot,” the court document said.

The Los Osos Sustainability Group sued the county in December 2023 for approving the final tract map without meeting the conditions of the tentative tract map.

Then, on Tuesday, van Rooyen ruled that the final map did not comply with the Subdivision Map Act.

“At a time when the county is in desperate need of housing, the court is sympathetic to the practical argument that this subdivision will be sustainable and should move forward to the next stage of development,” he wrote in his decision. “The narrow question at issue here, however, is not whether the development makes sense and is sustainable.”

Instead, the question was whether there was substantial evidence that the development could hook up to the sewer system at the time the map was approved, van Rooyen said.

“Almost complying with the Subdivision Map Act is not enough to pass muster. Nor is there legal authority for the restrictive covenant workaround the county creatively implemented in an apparent attempt to extend the Subdivision Map Act deadline,” he wrote.