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The 500-acre project's permit must be revised, a federal judge orders.

A federal judge has ordered the U.S. Army Corps of Engineers to revise its permit for the 500-acre Cypress Creek Town Center, finding the agency failed to ensure the protection of wetlands.

The order does not halt the work at the mall site at State Road 56 and Interstate 75, where crews have done earth-moving and road work preparations. But until the permit is revised, the developers proceed with any work at their own risk.

U.S. District Judge Royce C. Lamberth gave a harsh assessment of the corps in his 30-page memorandum that accompanied the order.

"The corps has failed to fulfill its statutory duties under (federal laws). Unfortunately, this is a familiar course of action for the corps when processing permit applications," the judge wrote. "As another member of this court has stated (in a separate case), the corps 'resorted to arbitrary and capricious meaning - manipulating models and changing definition where necessary - to make this project seem compliant (with federal laws) when it is not.'"

The judge wrote that the corps failed to conduct an in-depth study that takes a "hard look" at potential environmental concerns and make a "convincing case" that there would not be significant environmental impacts. It also failed to consider the "cumulative effects" of proposed actions, he said.

The corps' assertion that the mall would not create a cumulative impact "flies in the face of logic," the judge wrote.

"It not only may have an impact, it already has," he continued, referring to muddy water that discharged into the creek in 2008.

It's too early to say what the ruling could mean for the project. The corps will craft a revised permit. The Sierra Club, which filed the legal challenge, will offer its input. Then the judge will determine what conditions to impose on the project.

Deanne Roberts, a spokeswoman for the town center, did not comment Thursday on the judge's ruling, saying officials were still in meetings regarding the case.

The proposed 1 million-square-foot mall is being developed by the Richard E. Jacobs Group of Cleveland and Sierra Properties of Tampa. Developers have said in the past that they remain committed to the project, which they say will provide more than 3,800 full-time jobs, more than 1,000 construction jobs, annual revenue of $6 million for Pasco County and $2.4 million for the school district.

The project has been controversial from the start. Environmentalists raised concerns about pollution in a nearby creek that feeds the Hillsborough River. The river is a source of Tampa's drinking water.

The corps granted the permit in 2007. Then in February 2008, the corps suspended the permit after muddy water began spilling into the creek. Work stopped for 18 months.

The developers then paid about $297,000 in fines for violating the federal Clean Water Act.

Work recently resumed after a settlement in that matter was reached. In the settlement, the corps said the discharge was due to "human error" and not any flaw in the developers' plans.

That prompted U.S. Rep. Kathy Castor, D-Tampa, to call for a review by the U.S. Environmental Protection Agency. The agency agreed with the corps' findings.

"I have long been concerned about the environmental impacts of the Cypress Creek Town Center because of its location," Castor said Thursday in response to the judge's ruling. "I fear the detrimental impacts to Tampa's drinking water supply and wetlands. Now the U.S. Army Corps of Engineers, the Cypress Creek Town Center developers, the Sierra Club and the community have another chance to get it right."

The judge found that the corps got part of the review right: The agency properly ensured protection for endangered species, including the wood stork and the indigo snake, Lamberth found.

But environmentalists raised other objections during the application process, including concerns about the size of the parking lot and its effect on wetlands. Developers balked at reducing it, arguing it was too costly and saying an 8 percent profit was necessary for the project to be feasible.

In his review, the judge found that the corps relied on those claims from developers without independently verifying the data, which the law requires.

In calculating the developers' costs, the corps also accepted the developers' figures, which used only the market value of the property and failed to take into account the revenue expected from the sales of offices, hotels and homes. Had developers included that revenue, their project costs would have shrunk from $72 million to $46 million, the judge wrote.

He also said developers failed to prove why an 8 percent profit was necessary and that records showed average profits at area regional malls are 7.6 and 7.7 percent.

Denise Layne of the Tampa Bay Sierra Club called the ruling "a national victory" and said it would have been much easier for developers to address the group's concerns nine years ago.

"If they had listened and worked with us, that mall would be open and functioning today," she said. "It was their greed that made it go this long."

Times staff writer Craig Pittman contributed to this report. Lisa Buie can be reached at or (813) 909-4604.

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Fast facts

What happens next

The Army Corps has 20 days to submit a proposed remediation plan and any comments on the relief sought by the Sierra Club. The Sierra Club then has 20 days to file a response to those plans. The court will then issue an order specifying the remedial actions to be taken by the corps.