The redevelopment of the Concord Naval Weapons Station, the Bay Area’s largest proposed housing project, appears to be dead after the Concord City Council declined to extend an agreement with Lennar, the project’s master developer.

In a 3-2 vote Tuesday night, the council rejected legislation that would have extended the current exclusive negotiating agreement with Lennar Concord LLC, which was set to expire at the end of March. The 5,000-acre redevelopment of the mothballed military base calls for 13,000 housing units, 8 million square feet of commercial space, 2,500 acres of open space and potentially a college campus.

“Split decisions are always difficult,” said Guy Bjerke, the city’s director of community reuse planning, in a statement. “Concord will comply with the terms of our existing agreements with Lennar, and we will look ahead to how we can get this project moving again once our community gets through the COVID-19 public health crisis and the city better understands the pandemic’s impact to the regional economy and the city’s finances.”

Lennar had run into strong opposition from building trades after refusing to sign a project-wide labor agreement that would have made it an all-union development. The Contra Costa Building Trades Council sought an agreement that was consistent with the city’s Concord First policy, which requires that developers hire 40% Concord residents, pay prevailing wages, hire and train veterans, and commit to approved apprenticeship programs.

The developers said that agreeing to an all-union job site would make the project infeasible, raising construction costs by $542 million and cutting the project’s profit margin from 17% to a loss.

Lennar declined to comment about the vote. It’s unclear whether the home builder has walked away from the development or will attempt to negotiate further.

The vote ends a year of talks between Lennar and building trades unions over how much of the $6 billion project’s construction would be done by union workers. With negotiations at an impasse, in November Lennar suspended work on the project and stopped paying $37,000 a month to the city for staff work on the site because of the labor dispute.

Tuesday’s meeting was held via videoconference because of shelter-at-home requirements imposed by Contra Costa County and the state to stem the spread of the coronavirus. As part of its agreement with Lennar, the city will return unspent funds advanced by Lennar for the project.

“Despite this setback, our vision for the redevelopment of the former Concord Naval Weapons Station remains clear,” said Mayor Tim McGallian, who voted to extend the agreement. “It just looks like our path forward will be different than we expected.”

Correction An earlier version of this story misstated the amount of open space in the Concord project. It is 2,500 acres.

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Finding a new developer willing to adhere to all the unions’ demands will not be easy, according to Matt Regan of the Bay Area Council, a business group. He said that Lennar has agreed to a package of community benefits, including 25% affordable housing, that has become increasingly difficult as construction costs have soared in recent years.

“If they think another developer is going to parachute in and agree to the same package of benefits at today’s construction costs, they are sorely mistaken,” he said. “This project could have been an absolute lifeline, a massive jobs machine during the coronavirus crisis, when we could be looking at double-digit unemployment. It’s an absolute tragedy.”

Bill Whitney, who heads up the Contra Costa Building Trades Council, applauded the City Council’s decision.

“We look at this as a victory,” he said. “We also look at it as an opportunity to get back to building this project by finding a master developer that will play by the rules the city of Concord has put in place. We are not going to sit on our thumbs. The Building Trades Council and the city will be working on finding a replacement for Lennar.”

Further negotiations would be pointless, he added — after a year at the bargaining table, the two sides were further apart than they were at the start.

“As time moved on, it became clear they were not interested in hiring a local workforce,” he said. “They were going to flood the project with out-of-area workers at lower wages. That was appallingly negligent, and we opposed that.”

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen