The application for a housing complex on the Spenger’s parking lot — which has faced opposition from Native American activists — is now in the property owners’ hands.

Developers who tried to use a controversial state law to build housing on the Spenger’s parking lot — a 260-unit complex with 130 affordable apartments — have dropped out of the project and given the rights back to the property owner.

West Berkeley Investors, a subsidiary of developers Blake Griggs Properties, has relinquished its interest in 1900 Fourth St., including the development application, said property owners Ruegg & Ellsworth in a Aug. 23 letter to the city of Berkeley. The letter was shared with Berkeleyside by the city.

Ruegg & Ellsworth, which owns the lot with the Frank Spenger Company, “intend to pursue all development rights, including any rights associated with the pending applications,” the letter said.

Ron Heckmann, a spokesman for the Danville-based developers, confirmed that West Berkeley Investors and Blake Griggs Properties are “no longer working on the project,” but declined to give a reason why. The project website, which once contained documents and information, has gone dark.

Ruegg & Ellsworth did not respond to Berkeleyside’s repeated inquiries about the status of the property or plans for the development application.

With the contentious project, the developers had aimed to take advantage of a new state law designed to fast-track housing development and override local barriers. SB35 requires cities to give over-the-counter approval to projects that are at least 50% affordable. West Berkeley Investors reworked an initially mostly market-rate project to fit the requirements of the law, presenting in March 2018 plans for a larger 260-unit project with half of the units held for tenants making up to 80% of the area median income. The developers were the first to file an application under SB35.

The property shuffle “does not affect the status of the SB35 application in any way,” said Berkeley spokesman Matthai Chakko in an email.

In June, the city denied the application, saying the project was not eligible for SB35 and needed to go through the standard planning process. The city argued that the plan did not qualify for ministerial approval mainly because its location in the middle of a landmarked shellmound would impact a historical site and because it failed to meet the city’s affordable housing mitigation rules. Berkeley requires developers of market-rate projects to either make 20% of the units affordable or pay $37,000 per unit into the city’s affordable housing fund. The city said the 130 affordable units included in the Fourth Street plan don’t count, because they would only be kept affordable for 55 years, not forever.

West Berkeley Investors responded with a 400-page rebuttal, disputing each of the city’s points, and threatening to sue Berkeley if it did not change course and approve the project by the state-imposed deadline of Sept. 4 — today.

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Berkeleyside will cover the city’s response to the developers’ appeal when it is released.

The 1900 Fourth Street project faced fierce opposition from the start, as the Spenger’s lot is located within the bounds of the city-designated multi-block West Berkeley Shellmound. The hundreds of towering mounds of shells, bones and other objects built up by Native Americans around Bay Area over thousands of years sometimes served as burial grounds. A growing group of Ohlone Indians has worked hard to block the 1900 Fourth St. project, saying it would destroy a sacred site and disrespect native history.

In response, the developers said they’d planned to abandon the project if there turned out to be evidence that the site itself was once a shellmound. Extensive archeological excavations and old maps found no evidence of human remains or shellmound objects under the property. Instead, they suggested the site had been marshland, with two shellmounds nearby.

The research didn’t sway opponents, who showed up in force to a recent City Council meeting. They said the site is culturally significant in a larger context, whether or not there are human remains specifically under the parking lot. The site is the only part of the landmarked West Berkeley Shellmound area without a building on top of it yet.