UC Davis officials plan to break ground this fall on a hotel and conference center on campus now that an Alameda County judge has thrown out a lawsuit that challenged the project, university officials said Thursday.

The lawsuit, filed by a Davis resident, claimed that university officials were granting an illegal subsidy of a private project. The suit said the University of California, Davis, had an agreement to lease back office space within the building from the developer that will build and operate the hotel and conference center.

UC Davis officials had maintained that the lease agreement was legal, and the judge sided with the university.

The project is to be built on campus near the Mondavi Center for the Performing Arts off Interstate 80.

Alameda Superior Court Judge James A. Richman rejected the lawsuit in a ruling issued Wednesday, saying the lease agreement did not constitute a subsidy. Richman also rejected the lawsuit's claim that the project should have been put out to bid a second time after an initial developer backed out of the deal and the university significantly changed the design of the proposed building.

Richman added in his ruling that any attempt to amend the lawsuit and resubmit it "would be an idle act."

"We were confident our process was sound from the beginning," said John Meyer, vice chancellor for resource management and planning at UC Davis.

Meyer said university officials had continued to meet with leaders from the city of Davis about the proposed hotel conference center while the lawsuit was pending.

"We've been having some meetings with the city on how we can best connect the conference center and Mondavi with the downtown," said Meyer.

Don Mooney, the attorney who filed the lawsuit on behalf of Davis attorney John C. Gabrielli, said he did not agree with the judge's ruling. He had not yet consulted with his client to determine whether they will appeal the decision, he said.

The lawsuit rejected Wednesday was the second legal challenge filed against the university's project. Davis business owner Norm Rogers filed a lawsuit in 2002 claiming the proposed hotel and conference center would drain business from Davis' downtown, creating blight. That argument also was rejected by the courts.

John Yates, director for real estate services at UC Davis, said officials hope to break ground on the project this fall and complete it in late 2005 or early 2006.

The project would include a 75-room hotel, 75,000-square-foot conference center and a three-story building that would house the Graduate School of Management, University Relations offices and other university offices. The center also would include a pub and a ballroom.

It is estimated that construction would cost between $22 million and $24 million, the lawsuit states.

Initially, university officials had proposed a 150-room hotel but scaled back the project in response to concerns by Davis hoteliers.

The project is slated to be built by University Hospitality Group, a development company owned by B.B. and Ashok Patel. The Patels own and operate a number of motels and hotels in Northern California.