The Banning Ranch Conservancy has filed a legal challenge to the approval of the proposed Banning Ranch development.

In its lawsuit against the city of Newport Beach, the conservancy argues that the project violates the city's General Plan, which prioritizes that the land in West Newport be kept as open space. The lawsuit, filed Aug. 24, also asserts that the project's environmental impact report was inadequate and doesn't mitigate the project's significant impacts.

"The city's only legal responsibility is to prepare the environmental impact report, and their preparation of that was laughable," conservancy Executive Director Steve Ray said.

City spokeswoman Tara Finnigan said the approval processes complied with the law, and that the conservancy's lawsuit is "wholly" without merit.

In July, the City Council unanimously approved the nearly 400-acre Banning Ranch development, which would include 1,375 homes, a small hotel, commercial space, parks and open space.

"The key here is that the City Council totally discounted all of the expert testimony and citizens' opinion of the [environmental impact report] and the project," said Ray. "They're not interested in what's best for the city or the citizens. In our opinion, all they saw were dollars."

The project still faces approval from the California Coastal Commission and other regulators. Much of the land is unincorporated and would need to be annexed by the city.

The conservancy wants to buy the land to turn it into a coastal nature preserve and park. In 2008, the property was valued between $138 million and $158 million.

britney.barnes@latimes.com

Twitter: @britneyjbarnes