COEUR d'ALENE - The Coeur d'Alene City Council Monday denied an appeal by a group of neighbors who want to prevent the construction of a proposed 14-story high-rise building in downtown Coeur d'Alene.

The denial greenlights the Colorado developer, One Lakeside LLC., to seek building permits for the project slated to break ground in the fall.

"We're pleased, obviously, with the decision," said Greg Hills, principal of the real estate development firm behind the estimated $20 million project, Austin Lawrence Partners, out of Aspen, Colo. "We always felt, I guess, we had the right to do what we're doing."

The City Council denied the appeal during a special call meeting on grounds that the building's design, slated for 201 N. Second St., fits the city's design guidelines. The developer's property rights, it said, also have to be considered since they're meeting city requirements.

"They have their property rights too," City Councilman Dan Gookin said. "Our property rights stop at our own property boundaries."

But the denial doesn't end the issue.

The next step for concerned neighbors will likely be through the courts.

Coeur d'Alene North Condo resident Harold Damiano, who filed the appeal, said the group is prepared to litigate since they believe the city has the obligation to protect everyone's property rights.

If the approximately 173-foot-tall structure is built on the spot commonly known as the Mudge building, it would restrict the views and sunlight of adjacent condo residents to the north.

The city's own comprehensive plan, design commission standards and other guidelines spell out the duty of the city to protect everyone's property rights.

"This may not end here," he said. "We've already prepared the lawsuit."

Attorney Scott Reed has told The Press in previous interviews that he is prepared to litigate the case because the proposed building would create an economic loss for existing neighbors "in excess of a million dollars."

He declined to comment Monday.

The city subcommittee, The Design Review Commission, approved the building's design after several meetings with the developer and neighbors over the summer. At one point during those meetings the developer changed the building design to a taller, narrower version after taking in neighbor feedback.

The appeal, said Warren Wilson, deputy city attorney, should only be viewed as to whether the commission acted properly in its duties. It couldn't be viewed on any other aspect, he said, like traffic impact or building height.

The council unanimously denied the appeal. Councilman Ron Edinger was absent and Mayor Sandi Bloem recused herself because her son is friends with Hills.

"Frankly, it's not a suit I'm worried about," Wilson said of possible litigation.