"Over the three years or so, construction costs compounded at 15 percent annually and it's not as if rents were moving in a direction where you could absorb that cost increase," Rhea said Tuesday afternoon.

Labor shortages and other issues have driven up construction costs in the last year or two, hampering not only Brush Park South but other development projects in the city.

Mayor Mike Duggan's administration has been working to kick-start long-delayed development projects in the last year in anticipation of a pending recession.

The first phase of Brush Park South would have included 154 apartments and 600 square feet of retail space across three mixed-income apartment buildings.

It received about $14 million in low-income housing tax credits, which have been returned to the Michigan State Housing Development Authority; about $1.6 million in HOME Investment Partnerships Program funds, which the city will reallocate to other projects; and about $1 million in brownfield financing, which will not be used, Rhea said.

The Tuesday council agenda says "the city now wishes to cancel the original sale in place of several smaller-scale projects."

Grand Rapids-based Rockford Construction was the contractor and Detroit-based Hamilton Anderson Associates was the architecture firm.

Brush Park South was the byproduct of a disagreement over parking economics related to the proposed redevelopment of the Brewster Wheeler Recreation Center at the I-75 service drive and Wilkins Street.

In April 2015, the city announced that it had selected a pair of development teams to redevelop the historic Brewster Wheeler property.

KC Crain, publisher of Crain's Detroit Business; restaurateur Curt Catallo; Schostak Bros. & Co., and Rhea planned a $50 million project that would have brought a new restaurant, meeting space, 100-150 residential units and an acre of green space to the 6.2 acre Brewster Wheeler property. Commercial space was also planned.

But by July 2016, the parking disagreement that caused Rhea and Schostak to pursue a residential development on a different chunk of city-owned land; Crain and Catallo continued to pursue the Brewster Wheeler redevelopment. Crain said Tuesday that he is still working on lining up the financing for the project.