ENCINITAS — A controversial housing development planned for a horse property in Olivenhain hit a hurdle this week when a San Diego Superior Court judge tentatively ruled it can’t move forward without further environmental review.

The ruling was a setback for Woodridge Farms Estates LLC, which plans to build 16 homes on what is now a horse boarding facility on Desert Rose Way, east of Rancho Santa Fe’s intersection with 13th Street on the very edge of the Encinitas city limits.

Neighbors have long fought the project and filed a lawsuit against the city and the developer last year, saying the plans should have been subject to a full environmental review before being approved by the Encinitas City Council in March 2013.

In a hearing Friday, attorneys for both sides presented their arguments to Superior Court Judge Judith F. Hayes, who is expected to issue a permanent ruling over the next couple weeks.

Attorney Everett DeLano, representing a neighborhood group called Save Desert Rose, said Friday his clients were elated over the court’s tentative decision.

“It’s completely consistent with what we’ve said, which is that this project should have gone through an environmental review before the City Council took it up for consideration,” DeLano said. “It’s a complete affirmation of what we’ve been saying all along.”

Marco Gonzalez, an attorney for the developer, called the ruling a disappointment, but said the judge appeared receptive in the hearing to points that she may have overlooked before.

“Today our goal was to make sure she fully understands what’s going on here,” Gonzalez said. “We still believe it’s a really good project and that the benefits to the environment far outweigh the NIMBY-istic concerns of the residents.”

Those benefits include “a significant wetland enhancement and the donation of public trails for pedestrians and horses,” he said.

Nearby homeowners have been fighting the project for years, saying 16 homes is far too many for the 6-acre lot. They argue that the project doesn’t fit with their neighborhood’s rural character, that it’s a fire hazard and that it could harm the environment.

In early 2013, the Planning Commission agreed with neighbors and voted to reject the Desert Rose proposal. That decision was later reversed by the Encinitas City Council, which OK’d the plans in March of that year.

In signing off on the project, the council said its hands were essentially tied because of a state affordable housing law that gives developers special privileges — including permission to put extra homes on their lots — if they agree to set aside part of those homes for low-income residents. One of the houses in the Desert Rose development would go a low-income family.

In her tentative ruling, Judge Hayes noted that the Planning Commission’s findings were “relevant and sufficient to establish a fair argument that the project may have an adverse environmental impact requiring an EIR.”

Gonzalez said Friday the project will eventually move forward, even if more environmental review is required.

“The developers are extremely committed to the project at the densities that are currently approved,” he said.

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