CONCORD — Almost four years after it selected Lennar to develop the first phase of the massive Concord Naval Weapons Station mixed-use project, the City Council has pulled the plug on its partnership with the developer.

By refusing to extend an exclusive negotiating agreement with Lennar that expires next week and rejecting demands the developer made in January, the council effectively sent the project back to the drawing board.

“Both parties are kind of walking away,” Mayor Tim McGallian said in an interview after Tuesday’s council meeting.

The impasse was triggered by a labor dispute that boiled over in January between Lennar and the Contra Costa Building and Constructions Trades Council. The City Council was asked to step in and decide whether the labor agreement offered by Lennar satisfies city-approved terms.

After a marathon meeting back then that drew crowds of union workers, housing advocates and community members and stretched over two days, the council essentially told both sides to try working out their differences.

The developer had sent the council a letter demanding that it confirm Lennar acted in “good-faith” negotiations with labor and the city and that it extend the exclusive negotiating agreement, as had been done before.

Tuesday’s meeting sparked far fewer fireworks than in January. Because of a statewide shelter-in-place order stemming from the coronavirus pandemic, the council held its meeting via video conference and members of the public emailed their comments to the city clerk to be read into the record.

Dozens of people weighed in, either urging the council to make Lennar use union labor as much as possible or to reject the pleas by the trades group and move the project along.

The council unanimously decided it could not confirm whether Lennar had acted in good faith or not with labor.

Lennar also wanted the city to say it could negotiate with just one or more of the individual unions instead of the Building Construction and Trades Council. Vice Mayor Dominic Aliano and council members Carlyn Obringer and Edi Birsan indicated the negotiations should be be held exclusively with the trades organization while Mayor McGallian and Councilwoman Laura Hoffmeister sided with staff’s recommendation that Lennar could work with individual unions.

“Nowhere does it say (in the term sheet) that they have to negotiate with the (trades council),” McGallian said. “I’m only interpreting it from a legal perspective. I do support the building trades, but legally on paper, when it comes to term sheet. … it’s vague.”

To keep Lennar in the project, the city would have needed to extend the exclusive negotiating agreement that expires March 31. Staff recommended extending the agreement another year and amending it to require Lennar to pay project expenses it had stopped paying in October when work halted amid the labor dispute, which staff estimated would reach $330,000 through the end of this fiscal year in June.

Aliano made a motion to decline extending the agreement, which Obringer and Birsan supported, while McGallian and Hoffmeister voted to authorize the extension.

That means the city will be out of that $330,000 and will have to return any unspent money given by Lennar for the project.

The council likely will have to seek a new developer to serve as the master developer for the project and to build out the first phase, but it will take time to do that, said Guy Bjerke, director of Community Reuse Planning Bjerke.

“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,” Bjerke said in a written statement.

While searching and selecting a new developer could delay the project, the timeline had already been stalled by another set of circumstances. The Environmental Protection Agency told the U.S. Navy several months ago it needed to assess its sites for highly toxic fluorinated chemicals called PFAS chemicals, and the Navy — responsible for the cleanup of the former weapons station site before transferring it to Concord — indicated to Concord it will need about two years to complete that assessment.

The Navy will also need to look for those chemicals in the land it already conveyed to the East Bay Regional Park District, Bjerke said.

The proposed development on the former Concord Naval Weapons Station would be the biggest in Concord’s history and one of the largest in the region, slated to cover 2,300 acres with 13,000 housing units and millions of square feet of office, retail and campus space.

McGallian said the council’s decision does not mean the end of the $6 billion project. The specific plan drafted by Lennar and city staff could be used by a new developer, but could face modifications, depending on cost estimates and other factors.

“The project will still happen, just maybe not in its current form,” he said. “The whole thing is frustrating. But luckily we still have the ability to make it happen.”