GREIG — A controversial bulk-water project sprang another leak last week when an appellate court unanimously upheld the town's special-permit denial.

By a 5-0 vote last Friday in Rochester, the state Supreme Court Appellate Division, Fourth Judicial Department, affirmed state Supreme Court Justice Hugh A. Gilbert's April 17, 2007, decision that the Planning Board properly denied John T. and Lynn L. Smoke a permit to construct a warehouse building and storage silo on their property off Sweeney Road.

That board in 2006 determined that the permit application was improper because the proposed structure would be used primarily for wholesaling, not warehousing, and the town Zoning Board of Appeals later concurred. Wholesaling is not allowed in a rural/residential district, according to town zoning law.

First-year town Supervisor Marilyn E. Patterson, one of many vocal opponents of the project, said she was confident that the Smokes' appeal eventually would be thrown out.

"I have great faith in my boards," Mrs. Patterson said. "They cross their t's and dot their i's. They made sure they paid attention to their jobs. It didn't keep me up at night."

The Smokes, residents of Bangor, Pa., over the past several years have been working to develop a facility for collection, bulk storage and shipment of spring water on their Greig land. The proposed operation would collect spring-fed surface water, using no pumps, through four concrete casings with pipes that have been installed by the Smokes, then pipe it to a storage silo and a 2,800-square-foot warehouse building. That water would then be taken by 8,300-gallon tanker trucks to bottling plants outside the area.

Before seeking the Planning Board permit, the Smokes asked the Town Council to reclassify their property to a "floating zone," which would allow them to develop their proposed facility. However, the council withheld action because the Smokes hadn't conducted a full environmental assessment.

That request has since been dropped, Mrs. Patterson said.

"We have nothing active with the Smokes now," she said.

New Hartford attorney Thomas P. Hughes, who represented the Smokes, called the appellate ruling "disappointing."

When asked about the Smokes' next step, if any, Mr. Hughes said, "I have not yet discussed this matter with my client, so I can't discuss future steps that may be taken."

Partly in reaction to the Smokes' proposal, the Town Council in late August enacted a six-month moratorium on storage facilities and extraction of natural resources, including water. The vote was 3-2, with councilmen Thomas P. Gunn and William Knapp opposed.

A group of town officials and other community members is now working to update town zoning law on those issues, with the water section based heavily on the Great Lakes Compact, Mrs. Patterson said. "We're kind of writing our laws around that and past experiences in Vermont, where they've had problems," she said.

The extraction provision in the proposed moratorium also includes soil, rock, ore, natural gas, oil or other naturally occurring resources.

Project opponents have expressed concern that the Smokes may, as a local representative once told the Turin Town Council, develop an underground water line from their spring in Greig under the Black River into Turin, where a collection facility could be developed.

With the town's actions and proposed zoning laws, the Smokes should still need Greig's permission to extract water, Mrs. Patterson said.