The state Land Use Commission has denied a request to rezone more than 56 acres of Käneohe conservation land in a hotly contested case that pitted a cemetery owner against its surrounding neighbors.

The denial means no expansion for the Hawaiian Memorial Park Cemetery overlooking Käneohe town. But to neighbors, the 7-0 vote last month is a victory and they will celebrate with a block party this weekend.

"It's what Hawaii is trying to achieve in terms of sustainability, to preserve our conservation land," said Julianne McCreedy, who rallied against the expansion.

The original expansion called for a 20-lot subdivision, a one-acre archaeological preservation, 28,000 burial sites, roads, mausoleums and a 10-year flood-control plan. But the company needed the land rezoned to urban use before the plan could proceed.

After meeting with the community where about 200 people attended, the cemetery company revised its plan based on comments and dropped the subdivision plan, increased the cultural preserve to 9.4 acres, promised a 50-year flood-control plan, offered cultural practitioners access and other concessions.

Hawaiian Memorial thought it had satisfied community concerns.

The decision was a blow to the company that has spent two years taking it through the Land Use Commission process, said Jay Morford, Hawaiian Memorial general manager.

"I respect the Land Use Commission decision and obviously we're extremely disappointed in it," Morford said. "But we don't feel that it serves the big picture and the needs of the community."

The community rallied and organized soon after the project was announced in July 2007. The LUC allowed the community to intervene as long as it spoke with one voice.

Grant Yoshimori was that voice and he said the goal of the neighbors was to preserve the conservation land.

"Thankfully the community got together and voiced our concern as one voice and I think that did make an impression on the commission," said Yoshimori, adding that the community must remain vigilant because Hawaiian Memorial has other options to change the conservation zoning.

It can appeal the decision or apply for changes in the Koolaupoko Sustainable Communities Plan, which serves as a guideline for future development in the district.

The cemetery owners are still reviewing their options and the surprise decision, Morford said, explaining that the state Planning Office and the commission staff had recommended partial approval.

The Planning Office had recommended 29.4 acres for urban zoning with the remainder staying in conservation, including a cultural preserve, said Bert Saruwatari, a planner for the Land Use Commission.

"That's what the staff had proposed initially but the commission denied everything," he said.