OCEAN CITY -- It's just a little gazebo, the type you might put in your own back yard.

But state and Ocean City officials say the unpainted wooden structure threatens to undermine their efforts to protect Maryland's Atlantic resort from a treacherous sea.

Ever since the Princess Royale hotel put the 14-foot-tall gazebo on the beach last summer, Ocean City and the state Department of Natural Resources have been locked in lawsuits with the Baltimore owners of the hotel.

The dispute goes before the Maryland Court of Appeals in Annapolis on Friday. The immediate question before the court is whether the case should be tried in Baltimore, where the hotel's owners are, or in Worcester County, where the hotel is.

But the larger issue is what authority the state has to keep the resort's pricey oceanfront hotels and condominiums from creeping any closer to the surf.

The hotel's owners say they need a beachfront snack bar to compete with other resort businesses.

"They completely trampled on our rights," says Stanford D. Hess, a lawyer for 91st Street Joint Venture, the Baltimore partnership that owns the Princess Royale. Developers Malcolm Berman and Edward S. Goldstein are co-owners of the 340-room hotel and condo complex, which opened a year ago on the last vacant oceanfront property to be developed in the resort.

Property rights are the focus of a case to be argued today before the U.S. Supreme Court. A landowner is challenging South Carolina's shoreline protection law that forbids him from building on two oceanfront lots. Property rights advocates are hoping the court will rule that government should have to buy land that regulations prevent owners from using.

Maryland and Ocean City officials say the Princess Royale's gazebo, now boarded up for the winter, is in "no man's land," beyond an invisible line in the sand drawn 17 years ago to safeguard dunes along the beach. Dunes provide a natural shield to protect oceanfront properties from storm damage, they say.

The hotel's owners contend that Maryland's 1975 beach erosion control law is invalid.

They also argue that preserving natural dunes is unnecessary because of Ocean City's beach replenishment project, which included building a six-foot dune from 27th Street to the Delaware line.

The owners argue they need the gazebo to serve the hotel's guests food and drinks outdoors.

"The people on the beach want these things," Mr. Hess says. "They don't want to walk into the hotel to get a Coke. What's the harm of this gazebo? Next door you have a condo that goes out beyond this."

Robert D. Miller, the Department of Natural Resources' deputy water resources director, acknowledges that some buildings are closer to the water than others, depending on whether properties were already developed when the line was drawn.

"You take the beach where you can get it," Mr. Miller says. "It is a dynamic, potentially dangerous environment, so we need to be very conservative in terms of what we do."

Lawyers for the department asked a judge in Worcester County in August to order the gazebo removed. The hotel countered with its own lawsuit in Baltimore, where Judge Joseph H. H. Kaplan invalidated the beach building limit and enjoined the state from enforcing it.

The state appealed, and a higher court stayed the injunction.

The dispute is over an irregular strip of sand, roughly 50 feet

wide, between the hotel and the dune created as part of the beach replenishment project.

"We're not talking about putting condos out there," says Mr. Hess. "This strip isn't wide enough to do any real building."

But officials say that nearly 20 acres along the beach could be opened to development if the law is overturned.

Oceanfront property owners, including the Princess Royale, granted the state easements to build the beach replenishment dune and promised not to disturb it. The hotel's owners say that the dune easement line was "scientifically drawn" by the U.S. Army Corps of Engineers.

In contrast, they argue, the building limit line was unfairly "gerrymandered" to deprive them of a valuable strip of beachfront.

The hotel's owners say the Department of Natural Resources did not get around to issuing regulations enforcing the 1975 law until August, 16 years after it was enacted and a month after the gazebo was put on the beach.

State officials say they don't need those regulations to enforce -- the beach erosion law. Immediately after the Baltimore court told the state to hold off on enforcement, two other oceanfront owners applied for permits to build decks, swimming pools and hot tubs in the disputed strip of beach, town officials say.

"That's exactly the wrong thing to do along an eroding shoreline," says Stephen P. Leatherman, director of the coastal research laboratory at the University of Maryland in College Park.

Ocean City should be thinking about moving exposed beachfront properties back from the sea, Dr. Leatherman said.

He questions the effectiveness of the Corps-directed beach replenishment project. Although it was supposed to withstand a storm so severe it would only occur once a century, the dune was flattened by a northeaster on Jan. 4 and required $12.2 million worth of repairs.

Officials defend the beach widening and dune construction, saying it spared the resort from major damage during the storm. But they agree that the dune is not fail-safe against a hurricane or even repeated battering from northeasters that lash the coast several times a year.

"Common sense tells you that on a beach like this, you don't want to build too close to the ocean," says Jesse C. Houston, Ocean City's planning director. "And since we already have a line, we don't see any reason to move that to allow construction closer to the beach to endanger property and people any more than they have to be."

Structures on the beach can become battering rams if blown or washed back against oceanfront buildings during a storm, officials say. Anything that covers or shades the sand also discourages grasses, making the sand more vulnerable to wind and wave erosion.

The dune in front of the Princess Royale survived the January storm because it was created before the rest of the replenishment dune, officials said. Grasses planted on it had an extra year to take root, stabilizing the sand.

Allowing development too close to a man-made dune could undermine its ability to withstand storms, officials say.

"The dune shifts through wind forces," explains Mr. Houston. "If you've got some room for the dune to build and grow, it's going to be that much more effective."

Some say that instead of seeking to build farther onto the beach, property owners should preserve the smaller natural dunes on ++ their land and create new ones because they provide extra protection against wind and waves.

"We've been trying to get people to build dunes behind this dune as a backup," said Dot Truitt, who lives across 92nd Street from the Princess Royale. But she said buildings like the hotel would rather not do that. "They'd rather have their bars and 'best body on the beach' [contests] there," she said.