EUGENE, Ore. -- The University of Oregon must get a conditional use permit before starting construction on a $227 million basketball arena, a Eugene hearings official has ruled.

The permit process would require a public hearing and an evaluation of the project's impact on neighbors. The review won't stop construction of the 12,500-seat arena, but it will determine how the venue is built.

It's unclear if the extra step will delay the arena's opening, scheduled for fall 2010.

University officials could appeal to the state Land Use Board of Appeals or accept the ruling and seek the permit. They said they were still reviewing Wednesday's decision.

"We remain fully committed to moving forward with construction as quickly as possible, while at the same time continuing our fruitful and productive discussions with the Fairmount Neighborhood Association," the university said in a statement sent to The Register-Guard newspaper.

Neighbors have said they are concerned about traffic and parking. They also want the university to address issues such as noise, litter and lighting.

Hearings official Anne Corcoran Briggs overturned a decision by the city planning director that found the arena was an extension of the university and did not need a conditional use permit. Fairmount neighbors challenged the decision, saying the arena falls under city zoning rules because it is more like a separate entertainment venue than a university building.

"It wasn't a personal vendetta against the university arena," said Sue Jakabosky, co-chairwoman of the Fairmount Neighbors group. "Part of it was the principle that we felt in this case the planning process was being circumvented."

Meanwhile, the university on Friday will seek final state approval of a plan to sell state-backed bonds to finance the construction. The university used $27 million in bonds to buy land for the arena site, and wants permission to use another $200 million in bonds to pay for construction.