Sliema residents scored a partial victory on Wednesday in their long-running battle against developer Michael Stivala, after a court ordered the Environment and Planning Review Tribunal (EPRT) to reassess his plans to expand the controversial Townsquare project.

Residents had filed legal action after both the Planning Authority and its appeals tribunal approved Stivala's proposal to add a 10-storey hotel, restaurants, and additional apartments to the already-approved 28-storey tower on the site.

In three separate rulings delivered on Wednesday morning, the Court of Appeal found that Stivala cannot build a hotel in the middle of a designated public open space, nor add restaurants to areas zoned for residential use. It also ruled that all apartments in the development must have a minimum floor area of 150 square metres.

However, the court dismissed objections related to a proposed tunnel leading to the site and upheld the findings of the project's Environmental Impact Assessment.

Chief Justice Mark Chetcuti referred the case back to the EPRT for a fresh assessment.

The Townsquare project has been at the centre of controversy and legal disputes for nearly a decade. Originally owned by a consortium of the Ganado, Gasan, Soler, and Trapani-Galea families, the project received approval in 2016 for a 38-storey tower. Following objections from residents and NGOs, the planning tribunal overturned that decision in 2018.

The developers later scaled down the design to a 28-storey tower, which received Planning Authority approval in 2019. Two years later, the project was sold to Stivala's ST Group.

Stivala subsequently sought to expand the project, claiming that the overall building volume would remain largely unchanged and that 64% of the site would remain open space. The proposed changes would have increased the number of apartments from 159 to 234, added over 200 parking spaces, included a 90-room hotel, and expanded the site's commercial areas.

The Planning Authority approved the expansion unanimously in 2023, and the EPRT upheld that decision in February 2024. The ruling was then challenged in court by residents, with support from Moviment Graffitti and Din l-Art Ħelwa.