The Hawaii Supreme Court has issued a ruling that allows developer Castle & Cooke to proceed with building a 3,500-home community known as Koa Ridge in central Oahu.

“The LUC in this case properly reclassified Castle & Cooke’s property from the agricultural land use district to the urban land use district,” the majority opinion says, referring to the state Land Use Commission.

The ruling is a blow to the environmental group Sierra Club and former state Sen. Clayton Hee, who sued to prevent the construction the 576-acre community off of H-2 freeway near Mililani.

They argued that the Land Use Commission was wrong to reclassify the land from agriculture to urban in part because the Hawaii constitution says “the state shall conserve and protect agricultural lands.”

For decades, residential development in Hawaii has involved converting large tracts of farmland into housing. A State Office of Planning study last year found that 27 percent of Oahu has been urbanized, compared with less than 5 percent statewide.

The Supreme Court also affirmed last December developer D.R. Horton’s plans to build 11,750 homes on 1,289 acres of farmland in West Oahu. That legal challenge was also brought by the Sierra Club and Hee, and the justices also issued a 4-1 ruling.

Anthony Aalto, who leads the Oahu chapter of the Sierra Club, said Wednesday that he’s disappointed in the Koa Ridge decision.

“It’s a shame that the Supreme Court has ignored its constitutional duty to enact the (state) Constitution and preserve our farmland,” he said.

Aalto said the Sierra Club supported the city’s $6 billion rail project with the understanding that future development would be concentrated along the rail line.

Koa Ridge would sit at least two miles away from the route. While residents could take the bus, drive or bike to the nearest station, Aalto believes the project will “make life more miserable for commuters.”

“The city and the state should have found a way to preserve that farmland and in return give Castle & Cooke the opportunity to build along the rail,” Aalto said.

Castle & Cooke has long argued that its project would fulfill a need for housing and jobs. Construction is expected to start next year, and the first homes will be available during the last quarter of 2018.

Prices will range from the mid- $300,000s to $900,000, a spokeswoman for Castle & Cooke said in an email.

Harry Saunders, executive director of Castle & Cooke, issued a statement saying that the company is pleased with the ruling and supports both agriculture and residential development.

“Koa Ridge has now received full approvals from both the LUC and City and County of Honolulu, and we look forward to moving ahead with our efforts to provide new housing and job opportunities for Hawaii families,” he said. “We would like to recognize and thank all who have supported Koa Ridge and waited for over a decade to have the opportunity to make Koa Ridge their home.”

The majority opinion was signed by Chief Justice Mark Recktenwald, Justice Paula Nakayama, Justice Sabrina McKenna, and Circuit Judge Browning. Browning took the place of retired Justice Simeon Acoba, who was recused.

Justice Richard Pollack issued a dissenting opinion.