A judge ruled Friday that the environmental review done for the controversial Canyons housing development was adequate, two years after the Sierra Club challenged its approval.

The nearly 900-acre housing development has been planned for northeast Bakersfield bluffs overlooking the Kern River for years.

The lawsuit, filed in Kern County Superior Court, said the environmental impact report did not properly plan to mitigate the project's effect on local endangered species, including the Bakersfield Cactus, and climate change.

Judge Kenneth Twisselman disagreed and also ruled that the Sierra Club did not exhaust all options for resolving the matter outside court.

"The judge ruled against the Sierra Club on all points," said Ed Shaffer, a land use attorney for The Canyons.

Bakersfield City Attorney Ginny Gennaro said the Sierra Club can appeal the ruling but as the decision stands, it saves city from having to decertify the EIR and start over again.

Redoing the EIR, she estimated, would cost the developer "a minimum of $250,000."

Gennaro said as far as she could remember, the decision was "only the second victory for the city in an EIR case."

Still, she said she expected the Sierra Club to appeal, which would draw out the legal process at least another 18 months.

Babak Naficy, the Sierra Club's attorney, said "there's no decision at this point about whether there's going to be an appeal" but he disagreed with the court's ruling.

"It seems like where the housing is not in demand, it would be unfortunate to destroy the habitat of endangered species," he said.

Robert Kapral, project manager for The Canyons, said the developers plan to move forward with engineering in light of the decision.

That way, once the dismal housing market improves, he said, they'll be "ready to build."

And as for the financial difficulty posed by the bankruptcy of one of Canyons' lenders, Cascade Acceptance Corp., Kapral said "we're no longer at threat with the lender's bankruptcy."

He said the developer agreed on a settlement amount with a Cascade trustee, and Canyons is now working on raising the money by the end of this year.