The Bloomington City Council has rejected plans from a developer to build a 590-unit housing complex at East 3rd Street and State Road 446.

Fountain Residential Partners has proposed expanding a Planned Unit Development to allow for more housing, to be geared toward students, and less commercial use space at the site.

Developers also planned to add 0.71 acres of land to the adjacent PUD and to rezone the site to allow for more housing units.

The plan drew criticism because of concerns about increased traffic and density in the area.

Trevor Tollett, a representative with Fountain Residential Partners says the company has been working on the project since March and the plan has consistently evolved in reponse to public feedback.

The developers also agreed to give Bloomingfoods a $500,000 incentive to relocate from their east side location to the vacant Chapman’s restaurant on the development site. The deal was part of a larger incentive package worth nearly $2 million.

Tollett says the offer stands as an investment to enhance and add mixed uses to the site.

“We’ve come up with what we think is a fantastic public benefit, that is not only a public benefit but a huge benefit to our development,” says Tollett.

Despite the incentives, residents who spoke at Wednesday night's meeting urged the council to focus on green-lighting developments that are geared more toward families.

Steve Coopersmith lives in Gentry Estates near the proposed development site. He calls the Bloomingfoods incentive “pay to play”.

"That smells like bribe, I don’t know," says Coopersmith. "That’s over $2 million of, ‘we realize this isn’t good, we want to sweeten the deal enough for you to pass it’ I urge you to reject this project.”

Bloomingfoods representative Maggie Sullivan says the grocery co-op appreciates the vote of confidence that their retailer is worth investing in, but Bloomingfoods would need a lot more time to consider the proposal before it could make any decisions.

The council voted against the development proposal 8-0. One person abstained.