CLEARWATER - After a legal battle over the future of the Shoppes on Sand Key, a state appeals court has sided with the strip mall's owners, clearing the way for them to get a rezoning that could potentially lead to the shopping center being replaced with a much taller hotel.

The Second District Court of Appeal ruled against the city of Clearwater, which had fought against the zoning change. The court's decision is a big disappointment to Sand Key residents who waged an impassioned campaign against the rezoning, at times packing City Hall with hundreds of people.

So what happens now?

The Shoppes' owner, Clearwater-based real estate group D.A. Bennett Co., say they have no immediate plans to redevelop the 3-acre property about a half-mile south of the Clearwater Pass Bridge. But they envision a hotel being built there someday with some retail space attached.

"That makes the most economic sense," said Bennett's attorney, Paul Raymond.

Clearwater officials say the legal fight appears to be over. "We will discuss with the (City) Council what direction they want to take, but in terms of litigation it's probably at an end," said City Attorney Pam Akin.

However, City Council members say they'll keep the wishes of Sand Key residents in mind if the land owner eventually asks them to approve plans for a hotel to replace the Shoppes.

The land was previously zoned "business," but that designation expired in 2006. The owner went to court to get the zoning changed to "tourist," which would allow a 100-foot-tall hotel. Neighbors had wanted it zoned "commercial," a designation similar to the now-defunct "business" designation. That would restrict a hotel's height to 50 feet.

"I hope the owner of the property will keep the neighborhood's concerns in mind," said City Councilman George Cretekos, who lives on Sand Key. As for the "tourist" zoning that permits a 100-foot-tall hotel, Cretekos said, "It allows it, but it doesn't mean it's going to happen. That's a very narrow piece of land."

Sand Key residents fear they'll lose the Shoppes, the only retail area on Sand Key. Anchored by Backwater's, a restaurant known for steaks and seafood, the strip also includes a Columbia Restaurant, a men's clothing store and other shops.

Larry Edger, who owns Backwater's and operates the Web site www.sandkeyblog.com, believes nothing will happen to the Shoppes anytime soon. He said he has more than a decade left on his lease, and the Columbia has a lease as well.

"If the owner was in the midst of doing something, they've got to come see us at some point in time. They just can't go off and secretly do a deal," Edger said. "From that perspective, there's nothing going on."

When a small Bank of America branch in the strip mall recently closed, the property owner sent tenants a letter to quell rumors that it was closing because the Shoppes were being replaced.

The Shoppes' zoning has been in question since 2006.

A 20-year agreement between Clearwater and U.S. Steel, the former owner of Sand Key, allowed shops and restaurants to be built on the barrier island under a "business" zoning.

After that agreement expired in 2006, property owner D.A. Bennett requested the Shoppes be rezoned as "tourist" because the city's development code and land-use plan said that was the only allowable zoning in that location.

Sand Key resident JoEllen Farnham, who helped spearhead a grass roots "Save Our Shoppes" effort, blames the city for allowing the Shoppes' previous zoning to lapse. This is one of the reasons why Farnham and other island activists are exploring seceding from the city of Clearwater.

"This was completely preventable," she said. "This is what we consider to be a self-inflicted wound."

Clearwater planning officials were out of town at a conference Monday and couldn't be reached for comment.

However, Raymond, said, "I don't think that's a fair criticism of the city."

He said that when the previous 20-year zoning agreement expired, Clearwater's land-use codes would have required the city to zone the Shoppes under the "tourist" designation, even if city leaders didn't want to do so.

Mike Brassfield can be reached at brassfield@sptimes.com or (727) 445-4160.