Daniel Hostettler, Ocean House Management LLC president and managing director, said in an email Tuesday that he expects to see an appeal filed in court against the Waterford Planning and Zoning Commission's rejection Monday of developer Mark Steiner's proposed amendments to the zoning regulations of the Seaside Preservation Zoning District.

Hostettler announced at a commission meeting in June that Ocean House intended to manage an inn Steiner has proposed building on the property of the former Seaside Regional Center for the developmentally disabled.

Steiner's amendments would have allowed for commercial development including construction of the inn, but they failed Monday despite the commission voting 3-2 in favor of the changes. The developer's proposal required at least four votes in favor to pass due to the success of a neighborhood petition opposing the zoning changes for the property.

"We continue to fully support Mr. Steiner's development of a small 32-room luxury inn on the Seaside site, which I hope he will continue to pursue despite last night's decision by the commission," wrote Hostettler.

He wrote that to his understanding, the outcome was a result of commission member Dana Award not recusing himself from the vote. Award is a neighbor of the Seaside property and voted against Steiner's proposed amendments. Had Award recused himself, an alternate voter would have taken his place, and the amendments could have potentially gotten the necessary four votes.

Steiner, or anyone else New London Superior Court deems to have standing, may appeal the decision in court, according to town attorney Robert Avena. Appeals must be filed within 15 days of the town publishing a public notice of the commission's decision. Avena said Monday he expects official notice to appear in the newspaper by Sept. 22.

Gov. Dannel P. Malloy's spokesman Andrew Doba wrote in a statement Tuesday that the governor's office has been engaged in "active discussions" with Democratic state Rep. Betsy Ritter and state Sen. Andrea Stillman about the future of the property. Ritter and Stillman both represent Waterford, among other local towns, in the state legislature.

"We are continuing those discussions in light of last night's decision," Doba wrote.

Steiner declined to comment Monday, and his lawyer, Lewis K. Wise, said they needed to digest the outcome. Neither returned calls for comment Tuesday.

Throughout the approval process for Steiner's proposed zoning amendments, Waterford residents opposing the amendments have questioned Steiner's financial solvency, given that his home had been in foreclosure and he had in the past been sued over other financial issues.

Earlier this month, Steiner's home in Avon sold at auction. The home was under foreclosure and a Hartford judge in May ordered the foreclosure sale of the home.

A May 21 affidavit of debt showed that Steiner owed lender Farmington Bank about $792,000, which includes a mortgage of $348,000, a nearly maxed out $300,000 home equity line of credit with the bank, and more than $40,000 in attorney fees.

The bank gave the closing bid at $450,000. Recent court documents value the property at $760,000.

At the time of the auction, the property was vacant, according to court documents.

t.townsend@theday.comTwitter: @ConnecticuTess