The D.C. Court of Appeals rejected the D.C. Zoning Commission’s approval of a $720 million project to transform the McMillan Reservoir Sand Filtration Site into retail, office and residential space. (Carlton Lewis)

A court ruling Thursday complicated the District’s plans for the 25-acre McMillan Sand Filtration Site in Northwest Washington, one of the largest and most prominent pieces of open space that city officials have been trying to redevelop for years.

The D.C. Court of Appeals rejected the D.C. Zoning Commission’s approval of a $720 million project to transform the site into retail, office and residential space.

The three-judge panel did not bar development but ruled that the commission failed to adequately explain why it approved a plan that exceeded city density limits for that area. It also said that the commission did not fully study the “adverse effects” of the plan.

The grassy, city-owned site with large ivy-covered silos, at North Capitol Street and Michigan Avenue NW, was used as a water filtration plant from 1909 until the 1980s and has been fenced off from the public for decades.

The city purchased the site in 1987 and planned to redevelop it but ran into several disputes.

A persistent group of local activists fought the latest plan from the development team of Vision McMillan Partners, arguing that such a massive development does not fit into the neighborhood and that the zoning commission failed to follow the city’s processes.

Mayor Muriel E. Bowser (D), who supports the plan, attended a ceremonial groundbreaking at the site Wednesday.

Demolition and construction are slated to start next year, although the court ruling could delay it.

“The District believes the issues outlined by the courts will be addressed so work can continue on this transformative project,” Joaquin McPeek, spokesman for the Office of the Deputy Mayor for Planning and Economic Development, wrote in an email.

“Residents have waited nearly 30 years to see McMillan reach its full potential — they shouldn’t have to wait any longer.”

City officials estimate that the project would create 6,200 jobs and 655 units of housing, including 134 affordable units. It would also have 12 acres of parkland, a 17,000-square-foot community center and grocery store.

Friends of McMillan Park, a leader of the opposition, wants the fenced-in site to be turned into a public park and its original structures preserved. The group on Thursday emailed supporters: “WE WON!”