A group of Laurel Heights residents has filed a lawsuit against a massive development project that would revamp the UCSF Laurel Heights campus into a 744-unit housing and retail complex.

The case, filed last week in San Francisco Superior Court by the Laurel Heights Improvement Association of San Francisco, argues that the city failed to comply with the California Environmental Quality Act in approving the project at 3333 California St.

According to the lawsuit, the development at the 11-acre site would cause “needless significant environmental impacts” to the area. It also takes issue with plans to renovate the existing complex at the site.

The project — which was unanimously approved by the Board of Supervisors and San Francisco Planning Commission — includes 186 units of on-site housing for low-income seniors. That would be the largest addition of affordable homes to the area in a decade, said Supervisor Catherine Stefani, whose district includes the site.

“I worked with neighbors, community groups and the project sponsor for years to come up with a project that fits our community,” she said in a statement. “I am eager to break ground to provide housing for our aging population.”

Doug Shoemaker, president of Mercy Housing, which is working closely with market-rate developers the Prado Group and SKS Partners to build the affordable units, said it was a “shame” that the lawsuit was filed.

“It’s a pretty clear indication that there is a need for CEQA reform,” he said. “We’re in a moment where no matter how much work you do and how much consensus gets built … this is the option that is available to anyone who can scrape together enough money to file a lawsuit.”

The developers anticipated legal action and took a big step ahead of time to prepare for a lawsuit. They won approval for the project to be deemed an “environmental leadership” development under AB900. That state law speeds legal challenges to large developments, meaning the lawsuit over 3333 California St. will go directly to an appeals court and must be resolved in 270 days.

The lawsuit comes just as state Sen. Scott Wiener, D-San Francisco, revives a state bill, SB50, to legalize greater residential density around public transit. The Laurel Heights project sits on one of the city’s busiest Muni lines: the No. 1 bus.

The proposal also includes a child care facility and streetscape improvements like a new park, public walkways and expanded sidewalks. It will also include 857 underground parking spots and 35,000 square feet of retail.

While some neighbors are supportive of the foot traffic the project could bring to the area, others are wary of how it would transform the quiet neighborhood with more congestion and add new retailers that would compete with existing businesses at the struggling Laurel Village up the street.

“We have Target and Trader Joe’s, and the merchants in Laurel Village are very concerned about the impact on their strip,” resident Christina Ortega Morris said in September.

Clay Street resident Krisanthy Desby also previously said “this is not a downtown construction zone” and “15 years of noise, construction dust and congestion is simply unacceptable.”

Others took issue with the idea of touching one of the buildings on the campus — once the Fireman’s Fund Insurance Co. home office — which the Laurel Heights Improvement Association nominated for historic status in May 2018. Under the current proposal, part of the historic building would be reconstructed to allow for more public access.

The association is calling for changes on the proposal that would “allow substantial expansion while avoiding needless impacts to the historic 1957 Fireman’s Fund Insurance Company complex,” according to a press release.

“Much of the natural green landscaping and landmark building can be preserved and adapted to residential use under state-sanctioned historic design guidelines,” Association President Kathryn Devincenzi said in a statement. “We support sustainable development complying with the city’s general plan policies, responding to site constraints, and compatible with the historic locale.”

Devincenzi and a lawyer for the association could not be reached for further comment Tuesday.

Developers have been working on the plan for more than five years. They have held more than 100 meetings in the community, though only a handful were open to the public. In response to community feedback, the original plan was amended to include less retail than initially proposed and adds on the on-site affordable housing for seniors.

The lot is currently cut off from the neighborhood by a private green space and brick fence. The Prado Group and SKS Partners hope that the development will better integrate the complex with the surrounding community.

“We have worked diligently to ensure that we deliver affordable and family-friendly housing without unnecessary delays and as promptly as possible,” Dan Safier of the Prado Group said in a statement.

Trisha Thadani is a San Francisco Chronicle staff writer. Email: tthadani@sfchronicle.com Twitter: @TrishaThadani