Old Saybrook - In what environmentalists saw as a major victory Wednesday, the Connecticut Appellate Court upheld a lower court's ruling that a land-use commission in town correctly denied a developer's plan to build a 221-unit housing complex and an 18-hole golf course on hundreds of acres of forested wetlands known as the Preserve.

The developer - River Sound Development LLC, a subsidiary of the former banking giant Lehman Brothers - can petition to the Connecticut Supreme Court for another appeal. But those who have kept a watchful eye on potential development of the 1,000-acre property are hoping a second court ruling against River Sound will finally convince the owner to sell the land.

"We've been pushing for a conservation sale of this property for the past five years now, and the applicant unfortunately has, really steadfastedly, refused to engage in those conversations at all," said Charles Rothenberger, attorney for intervening party Connecticut Fund for the Environment. "Our hope is that now that we've had the Superior Court affirm the wetlands denial, you had the Appellate Court (affirm) the wetlands denial, that the applicant come to the table and at least open up those discussions."

Brian R. Smith, an attorney with Robinson and Cole who is representing River Sound, would not speak on long-term plans for the Preserve, 934 acres of which sit in Old Saybrook with the rest in Essex and Westbrook. He said only that his client had 20 days from Tuesday to file a petition to the Supreme Court, should River Sound choose to appeal further.

Because the Preserve is one of the last and largest areas of unprotected forested wetlands in the state, the developer's plans for the land has caught the attention of environmental groups and state officials alike.

The Appellate Court's opinion rejects River Sound's claims that the Old Saybrook Inland Wetlands and Watercourses Commission lacked evidence of negative impact to wetlands and watercourses and did not have the right to police activity beyond 100 feet of a wetlands and watercourse.

"The record reflects that there was sufficient evidence to support the commission's determinations that formed the basis for its denial of the plaintiff's application," the court's opinion reads.

The commission found "that certain types of species that live in the wetlands, including wood frogs and spotted salamanders, need upland wooded areas extending 750 feet from the edge of the vernal pool," the opinion reads. "In this case, impacts to frogs result in impacts to wetlands. While the commission's jurisdiction extends only 100 feet from the wetlands, per its regulations, it is allowed to consider all proposed activity that would affect that area."

State Attorney General Richard Blumenthal applauded the ruling, saying in a prepared statement that the decision spares "hundreds of acres of sensitive and significant coastal forest on Long Island Sound from devastating development."

But River Sound appears poised to continue with plans to develop the land. A Planning Commission meeting Wednesday evening included discussions on modifications to the open-space subdivision permit River Sound holds to build the housing complex.

The Preserve and its legal battles

The wetlands commission has been embroiled with lawsuits surrounding the Preserve for years. An appeal of a 1999 wetlands approval for a golf course there predates even River Sound; the owner at the time was Tim Taylor, a golf-course developer who in the 1990s bought the property from the Lyons, an Old Saybrook family, said Town Planner Christine Nelson.

Taylor wanted to build a gated 300-plus-unit housing development with a golf course, Nelson said. But Taylor went bankrupt, leaving the Preserve in the hands of mortgage holder Lehman Brothers, Nelson said.

Town Attorney Michael Cronin, who represented the wetlands commission, said an Appellate Court decision on the appeal of the 1999 wetlands decision is expected shortly. Another lawsuit, one the Connecticut Fund for the Environment filed against the town's Planning Commission in 2005 over its approval of a portion of the Preserve project, was dismissed two years ago.

Paul Smith, who has served as chairman of the wetlands commission throughout the duration of the 2006 lawsuit, said he wasn't sure what to expect next from River Sound.

"I would still love to see the state and local groups come together in some way to purchase the property, and, as a play on words, to preserve it," Smith said. "But we've made that approach, we've had overtures in that area a couple of times in the past, and it's never come to fruition, and I don't know how optimistic therefore I should be at this time."

j.cho@theday.com

THE PRESERVE

Total acres: 1,001 (934 in Old Saybrook; 65 in Essex; 2 in Westbrook)

Acres of wetlands: 114.5

Development plans: A 221-unit housing complex and golf course

Current owner: River Sound Development LLC, a subsidiary of Lehman Brothers

Previous owner: Tim Taylor, who bought the property from the Lyons family in the 1990s

LAWSUIT TIMELINE• Aug. 11, 2005: River Sound files application with Inland Wetlands and Watercourses Commission• March 18, 2006: Commission denies application• April 10, 2006: River Sound appeals denial in Connecticut Superior Court• Feb. 19, 2008: Connecticut Superior Court upholds wetlands denial• July 21, 2010: Connecticut Appellate Court upholds wetlands denial