SAN MARCOS - A group of small-business owners who oppose the Palomar Station condominium project filed a lawsuit Wednesday afternoon seeking to block construction, saying the city has not adequately studied how it would affect public health.

The lawsuit comes six days after a failed attempt by the opponents to collect enough signatures to force a referendum election that could have overturned the City Council's July 24 approval of the development.

Reached Wednesday afternoon, a representative of the Palomar Station developer said that the city adequately studied the project's potential effects and he is confident the project will not be blocked in court.

Opponents argue that residents of the 333 condos planned for Palomar Station could be subject to significant cancer risk from nearby industrial businesses. But the developer has maintained that the cancer risk would be extremely low, because it is based on a study that examined an unlikely, worst-case scenario.

The project is planned for 14 acres of vacant land one block south of Palomar College. In addition to the condos, the project would include 48,980 square feet of retail space, 9,800 square feet of offices and 8,280 square feet of restaurants.

According to the suit, filed by Escondido attorney Everett Delano on behalf of the San Marcos Business and Industrial Association, the project's final environmental impact report violates the California Environmental Quality Act by not adequately considering "cumulative" impacts.

"The project area has contaminated air, contaminated soil and contaminated groundwater, each of which poses risks to human health and the environment," the lawsuit reads. "Analyses have indicated that the project would likely lead to an increased risk to human health."

The suit seeks a temporary restraining order, or injunction, that would prohibit the city from allowing the developer to proceed until a more thorough environmental analysis has been conducted.

"We are essentially telling the city that the project would have a bunch of bad impacts that they didn't adequately research," Delano said Wednesday.

Simmons said that it is unlikely the suit would slow progress on the project, even if a section of the environmental impact report needs to be expanded.

Simmons said he doubted that a judge would require the City Council to reconsider the entire project based on changes to the environmental documents, but conceded that he was not certain on that point.

City Attorney Helen Peak did not return phone by Wednesday afternoon seeking clarification of the potential consequences of the lawsuit.

Simmons said he was surprised by the lawsuit, based on recent statements by Palomar Station opponents that a lack of money was responsible for the failed referendum.

"I find it a little interesting that they said they have no money, and now they are moving forward with the expense of a lawsuit," said Simmons.

Susan Wait, a member of the association who filed the lawsuit and the leader of the failed referendum campaign, declined to comment on the lawsuit Wednesday.

- Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.