ASHEVILLE - Raleigh developers have said they will proceed with an eight-story hotel on Haywood Street after winning a legal battle against the city Friday.

Superior Court Judge William Coward has overruled a Jan. 24 City Council decision in which the council denied a conditional use permit for a 185-room Embassy Suites Hotel with a parking deck.

Parks Hospitality Group of Raleigh was seeking to build the estimated $24 million project on a 2-acre parcel at 192 Haywood St. downtown at the site of the former Buncombe County Sheriff's Office. The hotel would cover 178,000 square feet and cost an estimated $24 million to build. It will generate $8 million in room sales, according to figures presented by a PHG consultant.

The site is across from another PHG hotel, the $14 million Hyatt Place completed in March 2016 at the corner of Haywood and Montford Avenue.

Council members made the unanimous decision against the hotel in a quasi-judicial style hearing surrounded by an atmosphere of disgruntlement by many residents over how a hotel boom is changing Asheville.

The Friday ruling had not been entered yet into the court records system but was confirmed by Mayor Esther Manheimer and officials from Parks Hospitality Group of Raleigh.

In a statement to the Citizen-Times Friday evening, PHG Vice President of Operations and Sales Trevor Walden said the company was pleased with the ruling.

"We were confident from the start that our project met all conditions of the use permit, and we are excited to bring Embassy Suites to Asheville. We are moving forward with the project but currently have no timeline for an opening date," Walden said.

Manheimer said the council would decide whether to appeal.

"The city is disappointed by the decision, but it is still the city's position that the council acted lawfully in all respects and in accordance with legal precedent in denying the conditional use permit," the mayor said.

If it decides to proceed, the council's next step would be to go to the N.C. Court of Appeals.

In its petition to the Superior Court, PHG said city officials made improper demands prior to a hearing, including asking for money for affordable housing.

PHG's petition said the council was wrong because it didn't make its decision based on seven specified conditions of a the quasi-judicial conditional use permit hearing. Those include that the development won't endanger public safety and will be in harmony with the neighborhood where it is located.

The petition also said council members violated rules of the hearing because they "made up their minds" beforehand instead of basing their decision on what was presented at the hearing and that they made "demands" before the hearing.

"The message, delivered by a chamber of commerce employee, was that the City Council intended to deny PHG's application if PHG did not (a) contribute $50,000 to the city's affordable housing fund, (b) agree to pay all employees a 'living wage;' and (c) agree to construct, at its expense, public parking spaces that were not required by the Unified Development Ordinance and that were in excess of the spaces needed for use by the hotel guests and employees."

The petition included sworn statements by PHG President Shaunak Patel and Walden.

The two said their local attorneys Lou Bissette, a former mayor, and Bob Oast, a former city attorney, were contacted the day of the hearing by Ben Teague, Asheville Area Chamber of Commerce economic development director.

Teague had met earlier that day with Manheimer, City Manager Gary Jackson and Chamber of Commerce Vice President of Public Policy Corey Atkins and was relaying conditions talked about at that meeting, the PHG officials said.

Patel said Oast told him that "requiring certain types of conditions was improper under the North Carolina statutes." Patel said he "decided not to give in to such unreasonable demands."

The council asked for similar conditions in January 2016 with developer John McKibbon for the Arras hotel going into the former BB&T building.

But that was a different process, known as as conditional zoning application. It's not quasi-judicial like the conditional use permit process and allows discussion with a developer before and during a hearing.

The council has said it wants to eliminate the more formal conditional use permit hearing in favor of conditional zoning.