EVERETT — A controversial development near Lake Goodwin can’t go forward without an in-depth environmental study, a hearing examiner has ruled.

The McNaughton Group wants to build nearly 600 homes on land northwest of Marysville, but was asking the county planning department to review the development in chunks. A hearing examiner said the Edmonds-based developer and county planners need to focus on the overall effects of the entire proposal.

The examiner on Friday said the county’s planning staff “completely ignored” the cumulative impacts of traffic, water runoff and other changes the proposal would cause to the surrounding, mostly rural area.

“This is a major development that must be analyzed in an environmental impact statement,” wrote Barbara Dykes, the hearing examiner.

The hearing examiner was asked to review plans for rural cluster subdivisions that a McNaughton-affiliated company, Lake Goodwin A Joint Venture LLC, is trying to build. Developers building in rural cluster housing zones are allowed to build more homes on that land, in exchange for putting them closer together to preserve open space.

The hearing examiner was looking at one application with 49 lots. The developer has applied to build eight other subdivisions, most of them right next to each other.

Those plans compelled nearby residents two years ago to form a group opposing large housing developments in rural areas. That group, called 7-Lakes, filed the appeal with the hearing examiner in 2007.

In particular, 7-Lakes objected to county planners determining that the project did not require more in-depth environmental review of the homes’ combined impact.

Dykes agreed and in April ordered planners to do more work on the cumulative impact of the development. She clarified her order in May and again last week.

Only during the latest order did Dykes specify that she was ordering an environmental impact statement, a study of how the housing would affect nearby habitat and infrastructure that typically takes more than a year to finish and can easily cost the developer hundreds of thousands of dollars.

County planners tried to comply with the examiner’s previous decisions, but her directions were too vague, said Executive Director Brian Parry, who oversees the planning department.

“We can’t read Barbara’s mind,” Parry said. “She modified her request to specifically ask for an (environmental impact statement). If she had asked for it initially, it would have been provided.”

Considering the applications separately didn’t ignore the total impact the developments would have, Parry said, because county code already forces county planners to take some of that into account when approving permits.

Barring a successful court challenge, the McNaughton Group would need an environmental impact statement to go ahead with the development. The company would pay for the study, but the county would choose the consultant who does the work.

The company already is appealing the hearing examiner’s May decision in King County Superior Court and plans to add the latest ruling to that case.

“Clearly, we’re disappointed in the hearing examiner’s ruling,” Kevin Ballard, McNaughton’s chief operating officer, said in a statement. “Now, after more than a year of cost and delay, the hearing examiner is yet again requiring more study and data that is simply unwarranted and in most cases, redundant.”

Ballard added that his company has complied fully with the current land-use code and has completed several studies that go beyond what’s required.

The development not only spawned 7-Lakes, but became a cornerstone of a political campaign when the nonprofit’s founder, Ellen Hiatt Watson, decided this year to run for the Snohomish County Council’s 1st District. She stepped down from the nonprofit to run her campaign. Watson, a Democrat who has accused big developers of wielding too much influence over county land-use policies, said the planning department’s behavior “doesn’t pass the laugh test.”

“The planning department had the gall to essentially reject the hearing examiner’s decision,” she said. “It’s not their place. It’s not their job. Who are they working for? Is it the developer or is it the county?”

Parry, the county executive director, said Watson was criticizing planners “for her political aspirations.”

“There’s no issue of (planners) failing to comply with orders of the hearing examiner,” he said. “The hearing examiner has much broader discretion than any permit reviewer.”

County Councilman John Koster, the Republican incumbent Watson is trying to beat in the Nov. 3 election, mostly agreed with his rival on the general issue: Planners should look at adjacent developments as a single project when it comes to considering their impact. Koster said the Legislature should try to clarify state law on this point.

“If there’s a single owner and you know that there’s going to be cumulative impacts, it defies logic not to look at it,” he said.

Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.