ROCKPORT — A state judge vacated Monday, Jan. 3 the building permit issued for a nearly completed 26-room downtown hotel.

Justice Bruce Mallonee declined to issue a court injunction to prevent construction from continuing. Justice Mallonee stated in his ruling he expects the town and developer to adhere to the ruling.

The attorney for neighbors who brought the lawsuit asked the judge to order that hotel be dismantled.

“The court reverses the approval of 20 Central Street’s building permit by the Code Enforcement Officer and its approval de novo by the Zoning Board of Appeals and vacates the building permit. The application is remanded to the Code Enforcement Officer for action following the further review by the Planning Board in response to the judgment,” Justice Mallonee stated in the ruling.

Mallonee ruled on Dec. 2 two petition-driven ordinance changes approved by voters in August 2020 must apply to the new hotel. One of those two new town laws set a cap of 20 rooms. The other requires an independent study be conducted to approve offsite and shared parking.

Justice Mallonee stated in his Dec. 3 ruling the Planning Board must reconvene and consider whether the balconies are in harmony with the architecture of the downtown. In addition, the judge said the Planning Board must review the parking waiver granted years ago to the nearby Union Hall, and to look at the Sandy’s Way parking lot to determine the extent it is shared with other businesses and the public.

Developer Stuart Smith said Monday he is waiting for his attorney and the town attorney to review the ruling. The construction crew is weatherizing the building, he said.  The project will go back before the Planning Board in January, but he said the review could take a month or two. Smith said he expects the Board will approve the project following another review required by the judge.

Smith said between the town and the company, legal fees have cost $250,000 to $300,000.

Rockport Town Manager Jon Duke said he sees no reason to issue a stop work order since the developer will be coming before the Planning Board as early as this month. He said the legal costs for the town have reached $120,000.

“This has been a costly endeavor to support our town boards and ordinances,” Duke said.

Smith said it was horrible that the “so-called Friends of Rockport” had cost the town so much money. He said that money could have been better spent, such as improvements to the nearby town park.

Attorney Kristin Collins, who represents the neighbors, said the developer will also have to request review of an amendment to the site plan to address the reduction from 26 to 20 rooms.

“This will provide an opportunity for the Planning Board to consider whether the removal of 10 rooms from the developer’s initial building design can provide the opportunity to preserve the harbor views from Goodridge Park and Central Street. The Court did not issue an injunction but has instead called on the Town to ‘comply with…the court’s judgment.’  If the Town does not do so (by issuing a stop work order to the developer), the Court states that it will entertain an injunction,” Collins said in an email statement Jan. 3.

“My clients are encouraged by this ruling and sincerely hope that the developer and the Town will approach this further review process with the aim of better addressing this project’s impacts on the neighborhood,” Collins said.

The Planning Board approved the project in February 2020. The town meeting vote that approved the new ordinances had been delayed due to COVID-19 restrictions.

Neighbors John Priestley, Mark Schwarzmann, David Barry and Winston Whitney — calling themselves Friends of Rockport — appealed the Planning Board approval of the project, arguing it would get rid of the scenic view and worsen the downtown parking shortage. The neighbors led the petition drive that led to approval of the town new town ordinances.

Developers Stuart, Marianne and Tyler Smith reduced the number of rooms from the original 35 to the 26 now being built.