A state appellate court has denied the Banning Ranch Conservancy's appeal for the city of Newport Beach to cancel its environmental approval of Sunset Ridge Park, court documents show.

The conservancy alleged that the proposed West Newport park's environmental impact report was wrong not to include the adjacent Banning Ranch, a proposed mixed-use development that includes residential and commercial space. Banning Ranch and Sunset Ridge Park are interrelated, the conservancy contended, and should not have been subject to a "piecemeal" environmental review.

In their opinion filed Wednesday, 4th District Court of Appeal associate justices Raymond Ikola, Richard Aronson and David Thompson write that the EIR's "project definition properly excluded the neighboring development, which is not a reasonably foreseeable consequence of the park. The two are separate projects with different proponents, serving different purposes."

The justices also write that, fundamentally, the EIR in question adequately analyzes the park's environmental impact.

"Substantial evidence supports its conclusions, and the city did not prejudicially abuse its discretion by approving it," the justices said.

"We knew that our environmental analysis was sound and two different courts have affirmed that," said Mayor Keith Curry in a prepared statement. "The Banning Ranch Conservancy has wasted a lot of our time and taxpayer money in an effort to block a much-needed park project to serve the residents of Newport Beach. It's been two and a half years of litigation, and I am grateful that we can move forward and get this park built in West Newport."

Steve Ray, executive director of the conservancy, said Friday that he felt the justices were wrong in their decision.

"In my opinion, the court misunderstood what piecemealing an EIR really is, and how projects are related to each other in that legal scenario," he said.

"When they did the EIR," Ray added, "the law makes clear if you have projects that are interconnected, you have to do an EIR on the complete development."

He contended that the Orange County-based justices are not familiar enough with environmental law — they even mispronounced the California Environmental Quality Act's abbreviation, CEQA, he said — and that the park was an attempt by Newport Beach to spur the development of Banning Ranch.

"Of course, we take issue with the ruling," Ray said. "At this point we feel the court erred in its judgment. We are considering our options at this point."

He called the ruling a "very bad precedent for all environment CEQA cases throughout the state of California."

The conservancy has also filed suit against the city's approval of Banning Ranch, which the conservancy is trying to buy in an effort to make it a natural park. In 2008, the city put the property's market value between $138 million and $158 million — an amount the conservancy disagrees with, Ray said.

Banning Ranch won approval from the Newport Beach City Council in July for 1,375 homes, a hotel, commercial properties, parks and 400 acres of open space.

The development still faces approval from the California Coastal Commission and other agencies. Much of the land is unincorporated and Newport would have to annex it.

bradley.zint@latimes.com

Twitter: @bradleyzint