Vindication tastes sweet as water for the developer of a proposed “ecoresort” in Sand City.

Ed Ghandour of Security National Guaranty scored a legal victory April 29, when a Superior Court judge invalidated the local water board’s denial of Monterey Bay Shores’ water distribution permit. This doesn’t make the ecoresort a done deal – the water district will have to reconsider the permit, and Coastal Commission staff has recommended denying the coastal development permit. But for Ghandour, it’s a step closer to groundbreaking.

Two months earlier, the Monterey Peninsula Water Management District board rejected the permit and ordered SNG to prepare an updated environmental impact report on the water supply. The decision hinged on the concern that California American Water, SNG’s proposed provider, would sometimes deliver Carmel River flow to the 341-room, mixed-use development on Sand City’s coast. (The state has ordered Cal Am to stop overpumping from the river.)

Attorneys for SNG balked, arguing the water board has no authority to revise pumping allocations already established by the court. Carmel River water may mix with Seaside Basin water in Cal Am’s storage tanks, they said, but the resort’s entire supply would be pumped exclusively from the basin.

The case brought Superior Court Judge Roger Randall back to Monterey County, where in 2006, he adjudicated the Seaside Basin and established the regional watermaster in a landmark decision known as the “physical solution.” The ruling divvied up basin water rights among property owners, including 149 acre-feet for SNG’s resort.

“We have a concrete example of how the water management district… disregards the physical solution,” said SNG attorney Sheri Damon.

Ghandour’s iPhone rang and he briefly excused himself.

Water district attorney David Laredo insisted SNG’s permit denial was the only issue before the court – not the larger question of the district’s authority. SNG has a right to its water allocation, he said, but it still needs to address all the potential environmental impacts of water delivery.

“SNG retains exactly the water right now as it had before the district’s decision,” he said. “If at times Carmel River water is going to supply SNG… the water management district wants to understand the effects on the Carmel River.”

Judge Randall sided with SNG. Holders of Seaside Basin water rights are allowed to use water pumped inland, he said, even if it mixes with Carmel River water in storage. He then gave the water district a mild scolding, warning it not to contradict the physical solution.

After the ruling, Laredo said the water district still interprets SNG’s permit application to mean some of the water will come from the Carmel River – and therefore needs to comply with the California Environmental Quality Act. “He did not make any findings about where this water will come from,” he said.

But the developer, who has stuck with the resort project through more than a decade of permit denials and legal appeals, was relieved. “Needless to say, I’m elated,” Ghandour said. “We’re gonna get this thing done.”