The city of Lawrence failed to follow its own rules when it withheld building permits for a Wal-Mart store and restaurant at Sixth Street and Wakarusa Drive, a judge ruled Thursday.

So Douglas County District Judge Michael Malone ordered Neighborhood Resources Director Victor Torres to make an official decision on 6Wak Land Investments LLC’s application within seven days. And he ordered the city to pay 6Wak’s legal costs in the case.

“There has been no lawful or reasonable explanation given as to why the procedure set forth in (city codes) was not followed,” Malone wrote.

The decision means Wal-Mart’s hopes of building a store at the site are still alive, but that the city will have another chance to rebuff those hopes.

“This will get us back to square one, I suppose,” Lawrence City Commissioner David Schauner said after the ruling.

“The ball’s back in the city’s court,” said Bill Newsome, one of the plaintiffs in the case.

6Wak, a partnership of Lawrence developers Newsome and Doug Compton, filed suit in May after the city declined to issue permits for building the store and an unidentified restaurant.

The company argued that the Lawrence City Commission improperly interfered with Torres’ duty to issue the permits. In May, the commission declared a moratorium on building at the intersection.

The city responded that Wal-Mart shouldn’t receive the permit because it was planning to build a “department store,” prohibited by the zoning for the site. Even without the moratorium, city attorneys said, the building permits wouldn’t have been issued.

¢ 6News video: Judge tells city to approve or deny Wal-Mart permit¢More about the Wal-Mart proposal

But all of that is moot, Malone ruled Thursday. Because the city didn’t follow its own procedures and offer a formal, legal “yes” or “no” to 6Wak’s application, he said, the process hasn’t run its course.

Newsome said he now wants a different outcome from the city.

“We’re hopeful that they’ll issue the permit,” he said.

Commissioner Mike Rundle said Thursday he still believed Wal-Mart is a department store, and shouldn’t be issued a permit.

“We should take care of that bit of procedure, then take it from there,” Rundle said.

Commissioner Sue Hack echoed Rundle’s sentiments.

“I think it’s always appropriate to follow the procedures, so that’s the way the judge has ordered, and that’s the way it will go,” she said.

Should the permit be denied, Malone wrote, 6Wak will have 10 days to appeal the denial to the city’s Board of Zoning Appeals.

An Aug. 12 hearing has been canceled on a restraining order that prevented the city from rezoning the site, Malone’s assistant said.

Wal-Mart has filed a separate lawsuit in the case. Officials said Thursday’s ruling does not affect that suit. No hearing date had been set in that matter as of Thursday.

Thursday’s ruling could be costly for the city. 6Wak officials said their legal fees would be in the “tens of thousands of dollars.” A month ago, city officials estimated they already had spent $10,000 defending the lawsuit.