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The $197.5 million headquarters hotel project took a big step forward Monday, when a Multnomah County Circuit Court judge denied a group’s attempt to refer funding plans to voters.

Judge Eric Bloch ruled against the petitioners for the referendum, saying the county’s decision to publicly finance a portion of the project was an administrative action that could be made without voters’ approval.

At issue was a plan to pay for part of the project with $78 million in public financing, including $60 million in Metro-issued revenue bonds. Debt service will be paid by transient lodging tax revenues generated by the 600-room hotel. The remaining $119.5 million will be paid by the developer – a joint venture between Minneapolis-based Mortenson Development Inc. and Chicago-based Hyatt Hotels Corp.

Developers filed an early assistance land use permit with the city of Portland on Thursday.

“Obviously, it was great news,” Mortenson official Jeff Madden said of the judge’s decision. “We will begin to move the project forward to the next step.”

The land use application is the first in a process that will involve design review and other land use processes, said Madden, general manager of Mortenson’s Portland office.

“The land where the hotel would be built is a superblock,” he said. “We will have to make sure there’s enough public space and not allow it to be developed in a way that isn’t conducive to public access. It will improve the neighborhood.”

The court’s ruling clears the way for completion of development agreement negotiations between Metro and Mortenson and then the start of construction, said Andy Shaw, chief of staff for Metro Council President Tom Hughes.

Metro in September 2012 began negotiations with Mortenson/Hyatt to serve as the development team; however, a contract including project financing was still in process, Shaw said.

Opponents included the Coalition for Fair Budget Priorities, a group comprised mainly of hoteliers. The coalition’s spokeswoman, Paige Richardson, said it never opposed the hotel project, but did believe public money was being doled out unfairly.

“We had members who sat on the original RFP board,” she said. “The original project had an $8 million public subsidy and Hyatt was the only major bidder. Hyatt came on and locked everyone out.”

The coalition is not giving up, Richardson said. It could decide to appeal the court’s ruling to the Oregon Court of Appeals, or file an initiative for the November ballot.

“It took us three weeks to get 20,000 signatures to put this on the ballot,” she said. “We’ll be looking at our options.”