Mayor Annise Parker told hundreds of residents Monday night that a settlement between the city and the developers of a high-rise proposed near Rice University has been finalized.

The Mayor’s office called the meeting late last month when it sent a letter to residents saying the city had no legal basis to stop the project, which has become known as the Ashby high-rise.

The settlement ends a lawsuit and allows the developer, Buckhead Investment Partners, to move forward with an altered version of the luxury project it has been planning since 2007.

“We have exhausted all legal means to stop this project,” said Parker, reiterating to the crowd her opposition against the project.

Next week, Buckhead and its architects will begin meeting to make changes to the plans based on the settlement, said Buckhead’s Kevin Kirton, who was reached by phone after Monday’s meeting.

Residents who have spent years fighting the project expressed further disappointment at Monday night’s meeting at Congregation Emanu El.

“I feel wholly deflated,” said Jim Reeder, co-chair of the Stop Ashby High Rise Task Force. Addressing the mayor in a question and answer session, Reeder said he wanted to encourage her to “make sure you believe you have done everything … to ensure that this is the best deal you can get.”

The settlement allows for Buckhead to build 228 apartments in a 21-story building at 1717 Bissonnet. The settlement requires the developer to mitigate light and noise from the building and parking garage. Vehicles leaving the building from Ashby would only be allowed to turn right toward Bissonnet, keeping traffic away from the neighborhood.

Buckhead filed the lawsuit in early 2010 over the project. The $40 million claim argued that the city bowed to neighborhood pressure and exceeded its legal authority in denying the developer’s application for building permits numerous times.