A state board has effectively stopped an Eagan group's protest against the city's plan to replace wetlands that will be destroyed at the former Diamond T horse ranch.

City officials said Wednesday they were gratified that the Minnesota Board of Water and Soil Resources refused to hear the residents' petition on the fate of 0.4 acres of wetlands.

"It makes us feel good that in the opinion of the board, we are doing things correctly. We've made a commitment in Eagan to take wetland replacement and mitigation very seriously," City Administrator Tom Hedges said.

"And that's not to take anything away from the residents and their concerns. It's more of an affirmation of the good work of our staff."

The state board's action may mark the end of roadblocks for the future Steeplechase subdivision at the closed horse ranch. Toll Brothers Inc., a national builder based in Pennsylvania, already has begun cleaning the 37-acre site and has received its grading permit, city officials said.

Raising a host of environmental and density concerns, the Friends of the Diamond T Property spent more than a year trying to block the proposal, which creates 37 single-family houses and 58 upscale town homes.

But the City Council approved the plan and went along with the recommendation of the Technical Evaluation Panel -- a board of experts from the city, Dakota County and the state board -- to mitigate the 0.4-acre loss by creating 0.8 acres of wetlands elsewhere in Eagan.

"We made the decision we made so that we can have good-quality, functioning wetlands," Council Member Mike Maguire said.

And it was largely because of the land's history of pollution. The ranch's former owner -- the late Jerry Thomas, a one-time Eagan City Council member -- illegally stockpiled horse manure at the site, according to city and county officials. In 1985, demolition debris from the former Metropolitan Stadium in Bloomington was dumped illegally on at least 2 acres of the ranch.

In their wetlands petition, residents accused the City Council of being "arbitrary and capricious" for not providing written reasoning behind its decision to allow the wetlands to be destroyed and replaced elsewhere.

Residents also argued that had the developer shaved off five housing units from its plan, all affected wetlands could have been saved.

"I was pretty disappointed when I saw the decision," said Brian Bates, the residents' attorney.

"I especially resent the use of the term 'meritless' (in the order). I thought our petition had a great deal of merit."

Neighbor Eric Vevea, whose name was on the petition, agreed.

"It's frustrating because it's clear that avoidance is possible," he said.

"Here we are running into another state agency that goes along with the city. It fits the adage that 'You can't fight City Hall.' "

The neighbors have not decided if they will try to make their case before the Minnesota Court of Appeals.