ORINDA — The developer of a luxury home project will pay more than a half-million dollars to settle allegations it spilled contaminated water into a creek.

OG Property Owner Corp., which is developing the 1,600-acre Wilder project just east of the Caldecott Tunnel, has agreed to pay the Regional Water Quality Control Board $530,000 to resolve a 2009 complaint that violated its construction permit and state water regulations including the Clean Water Act.

The water board has received the first payment of $110,000, said senior engineer Keith Lichten.

Orinda leaders were disappointed that none of the money would come back to the city for environmental projects.

In the complaint, the board alleged that 37,373 gallons of storm water runoff and 55,000 gallons of chlorinated water and concrete wash water spilled into Brookside Creek in early October 2007 as a result of OG Property's inadequate erosion control.

The developer's cleanup was inadequate and not addressed to the board's satisfaction until January 2008, according to the complaint.

The board originally sought a nearly $1 million fine. No further information was available regarding why the settlement was reduced to $530,000.

As part of the agreement, OG Property did not admit to any of the violations.

"We are pleased to reach this agreement "... and look forward to continuing to be responsive to the agency," said OG Property spokesman Jason Keadjian. "While we did not agree with the allegations in the complaint, we decided that reaching an agreement with the (water board) was the in best interests of all the parties."

The Wilder project will include 245 single-family houses, more than 1,400 acres of open space and a number of community amenities including parks and trails.

City officials and local environmental groups urged that the settlement include money for one or more education projects, such as creek restoration. State law allows using up to one-half of a penalty for such projects.

The board typically looks for nonprofit organizations to implement those projects, Lichten said, and did not receive information about what group would do so in Orinda until after the settlement.

"We had some other questions about the details of the "... projects and how we could ensure their success over time," he said. "Given enough staff time, you can resolve any question, but we simply weren't able to do it in the time we had available."

Council members said it was unfortunate the water board chose not to spend a portion of the penalty money in the city where the environmental damage occurred.

The city had a number of proposals, said Councilwoman Amy Worth. "Sadly, what happens is the money is paid by the developer but then it goes somewhere else."

Contact Jonathan Morales at 925-943-8048. Follow him at Twitter.com/sosaysjonathan.