PICNIC POINT — A legal battle over the largest piece of undeveloped residential real estate in the Mukilteo area has all but run its course.

Snohomish County and the developer behind the Frognal Estates project won an appeal brought by neighbors seeking to limit the proposed 112-home subdivision. The state Court of Appeals issued its ruling Tuesday.

A grading permit application for Frognal is pending from the county. Once approved, the developer could clear and log the area.

“The community is devastated at what this development will do to our neighborhoods,” said Emily Mydynski, president of the Picnic Point Preservation Committee, the nonprofit that pursued the appeal.

The homeowners could petition the state Supreme Court to review the case, but the court has discretion to take it up.

The case stemmed from a hearing examiner decision two years ago, focused on a narrow issue. In dispute was a restriction the county had imposed in the 1990s, in connection with the adjacent Regatta Estates subdivision built by the same developer. Neighbors argued the restriction was a covenant and should have stopped a 6.4-acre piece of land from being subdivided in the future — not unless the Regatta Estates homeowners agreed to it.

Had the neighbor groups prevailed, it could have tied up nearly a third of the 22-acre Frognal project.

However, the hearing examiner, the County Council and later King County Superior Court disagreed. So did the appeals court. The Regatta Estates Homeowners Association joined earlier legal challenges, but not in the appeals court case.

“Because the restriction is not a covenant, the Superior Court correctly refused to reinstate the restriction,” the new ruling says.

The judges ordered the preservation committee to pay attorney fees.

Formerly known as Horseman’s Trail LLC, a developer submitted the original plans for the Frognal site in 2005. Progress stalled during the recession. As the economy picked up, plans moved ahead under the name Frognal, a nod to a London neighborhood.

The project was grandfathered under land-use rules from 2005, which were more permissive.

The site is the last undeveloped part of Mukilteo’s future annexation area, on hilly, wooded terrain next to Picnic Point Elementary School. It’s a small piece of the area known as Harbour Pointe.

Noah Haglund: 425-339-3465; nhaglund@herald net.com. Twitter: @NWhaglund.