A nightclub operator has dropped its controversial proposal to build a large bar in a residential condo tower on 104th Street downtown, but is pushing ahead with plans for a 1,400-seat nightclub on 109th Street.

Brendan Crooks, a senior manager with Urban Sparq Hospitality, which owns Knoxville's Tavern and The Pint, confirmed Tuesday the company has decided not to appeal the city's August decision to reject the bar proposed for 104th Street.

Urban Sparq withdrew its application for the project on Monday, Crooks said.

"After meeting with community groups and other stakeholders, it's clear a 350-seat pub is not wanted in that location," Crooks said in an emailed statement.

"Our intent was to offer a high-end pub experience for the growing number of people visiting downtown, and for downtown residents. It is disappointing that this kind of pub is not welcome two blocks from the new Rogers Arena and the Ice District."

The bar would have been on the ground floor of the new Fox 2 condominium building on 104th Street at 102nd Avenue.

Urban Sparq originally sought approval to build a pub with a maximum occupancy of 596 people but later dropped the capacity to 400.

Chris Buyze, president of the Downtown Edmonton Community League, met with Urban Sparq representatives on Monday.

"We had been contacted by the applicant Urban Sparq over the weekend, and had a meeting yesterday morning where they informed us that they were going to withdraw their appeal," Buyze said Tuesday.

Many area residents had opposed the bar, saying it was too large for their neighbourhood.

But Buyze said he appreciated the developers reaching out to the community.

"It was the first opportunity that we've ever had to talk to the applicant," he said.

"And I think they have a better understanding now of where the community, and stakeholders in the area are coming from. And hopefully this kind of conflict won't happen in the future."

Coun. Scott McKeen had also opposed the bar, saying it wouldn't fit into an area recognized for its safety by the Purple Flag program.

"104th Street gets this Purple Flag designation and then comes along a proposal for a 600-seat bar which seems to fly in the face of all of the work," McKeen said Tuesday.

"There was a lot of work that went into that designation. So I am very, very, very pleased."

Urban Sparq is still planning another nightclub with a seating capacity of 1,400 in the former Mother's Music location on 109th Street at 103rd Avenue.

The city rejected the nightclub application in August. Urban Sparq is appealing the decision. The hearing is set for Nov. 24.

But Buyze said the community league will be talking to Urban Sparq before the appeal is heard.

"At least at this point we have a name to a face, and a contact with Urban Sparq, and they agreed to meet with us again in the coming weeks."