A judge’s decision to reverse the City of Oak Harbor’s approval of a low-income project downtown was affirmed by the Washington Court of Appeals.

In an unpublished opinion released this month, the appellate court agreed with former Island County Superior Court Judge Alan Hancock’s ruling that the project proposed by the Low Income Housing Institute did not conform to the city’s zoning code for the downtown area.

The lawsuit under the Land Use Petition Act was brought by the Oak Harbor Main Street Association, a group of downtown merchants, against the city and Low Income Housing Institute’s architect for the project.

It’s unclear whether the institute will appeal to the state Supreme Court or what will happen with the property adjacent to Hal Ramaley Park on Bayshore Drive. Officials from the institute didn’t immediately return requests for comment.

An official previously said more than $1.5 million was spent on the project.

The Low Income Housing Institute proposed building a 50-unit project for low-income residents, with a significant percentage earmarked for veterans.

Oak Harbor planning staff, the hearings examiner and the majority of city council members concluded that the proposed development conformed to city code. They found that the project should be considered mixed-use and conformed to central business district zoning even though only 2.8 percent of the 40,000-square-foot building would be retail space.

Hancock, however, found that the code does not allow developments that are primarily dwelling units. The appeals court agreed.

“Under its plain language, Oak Harbor Municipal Code requires mixed use developments in the CBD,” the opinion states. “However, when a development’s predominant use is residential, it must be located in the CBD’s designated subdistricts CBD-1 or CBD-2.”