Construction is set to start later this year on the long-delayed 5M development at Fifth and Mission streets, after a panel of judges rejected an appeal of the project neighbors filed more than 3½ years ago.

The First District Court of Appeal on Monday ruled that the development may proceed as planned, setting the stage for property owner Brookfield Properties to start work on a 652,000-square-foot office tower at Fifth and Howard streets, as well as a 288-unit apartment building on Mission Street.

The project will also eventually include a 400-unit condominium building on Fifth Street, to be built by Hearst Corp., which previously owned the entire site but in 2017 sold part of it to Forest City, which was taken over by Brookfield Properties last summer.

“We look forward to taking the next steps with the SoMa community to realize the benefits of new housing, much-needed open space, youth programming and other extensive investments positively impacting the neighborhood,” said Brookfield Properties Vice President Jason Bonnet. “We will continue to work with neighbors and community groups to ensure 5M is thoughtfully integrated into the neighborhood and beneficial for all over the long term.”

Hearst, which owns The San Francisco Chronicle, still owns 901 Mission St., where the newspaper has been located since 1924. That building will eventually be renovated, with a public park to be added to the roof. The Chronicle will remain in the building.

In total the project will include 702 units: 400 market-rate condos, 211 market-rate rental apartments and 91 units targeting middle-income households earning from 100 percent to 150 percent of area median income, currently between $118,000 and $177,000 a year for a family of four.

In addition, the developer agreed to pay $18 million to the Tenderloin Neighborhood Development Corp. for a 71-unit affordable project at 168 Eddy St., a few blocks from Fifth and Mission, and also build an 83-unit, low-income senior housing project on an 8,800-square-foot empty lot at 967 Mission St., between Fifth and Sixth streets.

Angelica Cabande, director of the South of Market Community Action Network, one of the nonprofits that sued to block the development, blasted the decision.

“The approval of the 5M project was a huge giveaway to a for-profit development proposal that will have lasting negative impacts not just for SoMa but for the entire city of San Francisco and for the region,” Cabande said.

The project opponents still have until early May to appeal the First District Court of Appeal decision to the state Supreme Court, but have no plans to do so, according to neighborhood activists involved in the appeal.

Instead, the project opponents urged the city to “mitigate” 5M’s impacts by “aggressively purchasing rent-controlled buildings and development sites for affordable housing as well as protecting our precious few public open spaces.”

The project — dubbed 5M for Fifth and Mission — will transform a transition block between SoMa and downtown San Francisco with a mix of housing, office space and arts. The project includes an acre of open space.

In addition to The Chronicle building, two other historic structures will be renovated: the Cameline Building and the Dempster Printing Building, which will be dedicated as new office space for CAST, the Community Arts Stabilization Trust.

SoMa activists objected to the fact that some of the on-site affordable units will be aimed at middle-income households earning 150 percent of area median income, far more than most South of Market or Tenderloin families earn.

In addition, they opposed the project because, they argued, the environmental study for the project didn’t adequately study its shadow impact on Boedekker Park, the only public park in the Tenderloin. Critics also argued that the project would speed up gentrification of a part of San Francisco that is home to high-flying tech companies as well as residential hotels housing some of the city’s poorest residents.

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