The Orono City Council approved a housing subdivision of the late Doug Dayton's property in Orono on Monday night, despite a lawsuit filed by neighbors against the city.

A developer bought property on the quiet, private Mooney Lake and proposed building 11 houses on the land, which includes slightly more than 94 acres — more than half of which would remain in its natural state in plans. However, a group of neighbors sued the city, Minnehaha Creek Watershed District, developer George Stickney and his company BPS Properties this month, hoping to stop the subdivision because it would destroy remnants of the historic Big Woods forest.

But after a Hennepin County judge didn't grant a restraining order in the process, City Attorney Soren Mattick said the City Council could move forward with final approval.

"There's nothing preventing the city from acting on the application," he said. "It's not like they just rubber-stamped it; it's received a lot of review."

A lawyer for the neighbors said the council was caving to political pressure.

"Members of the Orono City Council are more concerned about satisfying the developer's interests than they are in protecting the natural resources of this property," attorney Randy Hopper said. "Perhaps the cost the city will incur from further litigation they will face, will cause them to wish they had been more prudent rather than political."

When Doug Dayton bought nearly 100 acres of woods and fields a few minutes north of Wayzata, he vowed to create a refuge of waving grasslands.

The council unanimously approved preliminary plans in July after the city's Planning Commission approved it. Although the council approved the final plat Monday, the developer still needs the watershed district permit approvals, which are slated to be discussed Oct. 22.

Dayton, the grandson of Dayton's department store founder George D. Dayton and the company executive credited with launching Target, bought the land some 50 years ago and spent years restoring the fields and building trails in the dense forest. When Dayton, the uncle of Gov. Mark Dayton, died in 2013, his widow, Wendy Dayton, vowed the land wouldn't be sold to developers and announced plans last year for an 83-acre conservation easement.

When word leaked that the property — one of Orono's biggest remaining open parcels — was coming to market, developers pounced. It hit the market last year for $5.9 million, far less than its worth as a redevelopment project. But this summer, plans changed and Stickney proposed Mooney Lake Preserve. Just after closing, Stickney, an agent with Coldwell Banker Burnet and a principal with BPS, said the 11 lots would include seven on the lakeshore and four off the lake.

City leaders have said that Stickney could have gotten at least 30 homes on the property and chose instead to preserve some of it. The property sold Sept. 18 for $5.3 million, according to public records, bought by BPS Properties LLC from Wendy Dayton.

The 13 neighbors who sued over the subdivision say it violates the Minnesota Environmental Rights Act because it would cause "significant environmental degradation and destroy natural ecosystems" of the Big Woods forest.

"It's just a shame to see how it's turning out," Dayton's son, Bruce, told the Star Tribune this month, adding that his father had wanted only two other homes on the land. "The 40 years of work he did establishing the prairie is going to be heavily damaged. … It was supposed to be his legacy."

Staff writer Mary Lynn Smith contributed to this report

Kelly Smith • 612-673-4141