JERSEY CITY -- In a blow to a Downtown neighborhood group, a state appellate panel ruled today in favor of the developers of a planned five-story, 87-apartment "micro-unit" building long opposed by the group.

The decision affirms a lower-court ruling that gave automatic approval to the developer's plans following the city's failure to approve the project during the 95-day time period prescribed by state law. The plans never went before the city Planning Board.

Donna Jennings, attorney for developers Rushman-Dillon, said her clients are "thrilled" by the ruling but remain frustrated that the project remains stalled four years after it was first proposed.

"We've lost four years," Jennings told The Jersey Journal. "It's a win but it took four years to get us what we were entitled to."

Residents of the Van Vorst Park neighborhood objected to the planned development -- slated for a formerly city-owned lot at Bright and Varick streets -- arguing that the proposed density was inappropriate for the area and that residents were left out of the preliminary approval process.

One resident during a November 2013 meeting about the plans expressed fear the building would create a "Hoboken-like atmosphere" in the area, which sits about one half-mile west of the Grove Street PATH station and comprises mostly three- and four-story brownstones and apartment buildings.

A representative for the Van Vorst Park Association, which appealed the lower-court ruling, said in a statement the group is "disappointed."

"The VVPA intervened on the case to defend the public's right and to request that the developer make the required presentation to the boards," the statement says. "We believe the court decision to grant the automatic approval could have city and statewide consequences as it provides a mechanism for developers and municipalities to circumvent the public input process that is required by land use laws & zoning ordinances."

The two appellate court judges who decided the case contradicted the residents' claims about not having a say on the project, saying there were meetings about the redevelopment plan that allows for the micro-units.

"There were numerous noticed public hearings during the redevelopment process at which no member of the public, including VVPA, appeared and objected regarding the issue of density or on any other basis," the ruling says.

Rushman-Dillon's micro-unit project, which would have been the first in this area, received the go-ahead from city planners in September 2013, when the city told the developers that their application was "substantially complete," a key step before the project could go before the Planning Board for final approval.

At about that same time, Van Vorst residents began calling on Mayor Steve Fulop, who took office in July 2013, to slow the process. At first, the Fulop administration said there was little they could do, but after the heated meeting in November 2013, the city reversed course and told the developers the density of the project presented a problem.

In January 2014, the city denied the application and in February 2014, Rushman-Dillon sued.

Seven months later, Hudson County Superior Court Judge Joseph Turula ruled in favor of the developers, granting them automatic approval. Today's decision upholds Turula's ruling.

The Van Vorst Park Association has 20 days to petition the New Jersey Supreme Court for a possible review. City spokeswoman Jennifer Morrill indicated the court battle is not over, but it's not clear the city has any legal standing to appeal. It was named a defendant but was not an appellant.

"This is not the end and we have no intention of backing down as we side with the community on this important issue," Morrill said.

Terrence T. McDonald may be reached at tmcdonald@jjournal.com. Follow him on Twitter @terrencemcd. Find The Jersey Journal on Facebook.