A Montgomery County Circuit Court judge yesterday upheld the planning board's approval of a multimillion-dollar housing complex and Professional Golf Association championship course proposed for Potomac.

The decision reaffirmed a controversial planning law that has preserved agricultural land by allowing developers to exceed density limits in more congested areas of the county.

Judge John J. Mitchell's five-page decision appeared to open the way for developers to move ahead on the $7 million, 18-hole stadium golf course and the companion 850-unit housing development planned for the 978-acre Avenel farm site near the Potomac River. The development also would set aside 50 acres for a future sewage treatment facility to be surrounded by a 500-foot-wide wooded area as a buffer.

The West Montgomery County Citizens Association, which represents residents near the exclusive River Road section of Potomac, filed suit against the project last year, saying the planning board had improperly allowed the use of transfer of development rights, known as TDRs in planning jargon.

A planning concept adopted by Montgomery nearly four years ago, TDRs have been used to preserve hundreds of acres of upper Montgomery farmland while spurring denser development along already built-up corridors. Other jurisdictions also have used TDRs to save historic buildings such as Pennsylvania Station in New York and the Pine Barrens of New Jersey.

The county law allows developers to add extra buildings on a parcel of land after they agree to pay an agricultural land owner to give up his right to develop his property, thus saving it from intense development. The Avenel developers used TDRs to double the amount of housing allowed on their site, and the neighborhood association assailed it as "checkbook" zoning.

Mitchell's decision said the Potomac property owners had, in effect, launched a "frontal assault" on the use of TDRs. Throwing a barb at the West Montgomery County Citizens Association for challenging the luxury development, Mitchell's opinion said, "It seems late in the day for a group commonly characterized in California as NIMBY -- not in my back yard -- to launch a constitutional attack."

"Of course I'm not thrilled with the decision. Obviously we're disappointed," Mary Ann Thane, zoning chairman for the 500-member association, said yesterday. The group's board of directors will meet next week to decide whether to appeal Mitchell's decision, she said. Such an appeal must be filed within 30 days.

But Stephen Z. Kaufman, attorney for the developers -- Rock Run Limited Partnership -- said, "It was more than just Avenel that was on trial. Mitchell's decision is a total vindication of the county's long-range planning vision, which is to put growth near where the facilities are for that growth."

Principal members of the partnership, which also developed the luxurious River's Edge subdivision "It seems late in the day for a group . . . to launch a constitutional attack." -- Judge John J. Mitchell in Potomac and part of Leisure World in Aspen Hill, are Tony Natelli, Gene Hollaway and Dennis Meyers, according to Kaufman.

"Everyone on the whole development team is obviously very pleased. We never felt the judge would reverse the decision of the planning board, which followed a very long and comprehensive planning process which involved the whole county," Kaufman said.

A 1981 lawsuit challenging the TDR concept in Montgomery also failed.

In appealing to the court, the citizens association argued that the planning board approval amounted to an "unconstitutional" disregard for uniformity and an "improper delegation of zoning power."

Mitchell disagreed. "The judiciary is cautioned not to substitute its judgment for that of a fact-finding administrative agency. The court cannot conclude that an amendment to the zoning ordinance is rezoning. Logically, it would seem that people would oppose such legislation in the planning stage," he wrote, noting that the County Council earlier had amended the zoning ordinance to allow use of TDRs in Potomac.

Roger W. Titus, an attorney for the association, said, "This is an ad hoc process where development rights can be purchased at random locations without it being done in a uniform manner. The availability of that device on an ad hoc basis throughout Potomac is of great concern.

"This particular case isn't just one little old tiny subdivision, this a major housing development with a water treatment plant, a stadium golf course and a lot of homes ringing it -- it's a major development." A stadium golf course is designed with vantage points for spectators overlooking the greens.

Judith Heimann, a commissioner for the Maryland-National Capital Park and Planning Commission and member of the Montgomery Planning Board, said, "Obviously I'm delighted. What other comment could I make -- it's always nice to be affirmed and we were quite sure that we were right."

Norman L. Christeller, chairman of the planning board that approved the Avenel complex last fall, was out of the country yesterday and could not be reached for comment. But in a recent interview, Christeller praised TDRs as the savior for vast stretches of farmland in Montgomery.

Before construction can begin, the Avenel developers must get building permits, extend public utilities such as water and sewers, and build the internal streets, according to Kaufman.