An application to build a controversial 11-story hotel on Spicewood Springs Road has been temporarily withdrawn, according to an Austin city councilwoman.

In an email message to her constituents, Sheri Gallo, who represents District 10, said developer David Kahn made the decision a day after meeting with Gallo and her senior policy advisor.

Plans for the hotel, which would have been located at 6315 Spicewood Springs Road, near Yaupon Lane, had alarmed many nearby residents who were concerned about traffic increases, among other issues.

The site is outside Austin’s city limits but is inside the city’s extraterritorial jurisdiction, Gallo said, which means the city only has a very limited say in what is ultimately developed there.

"I discussed the serious concerns that both the neighborhood and I have about the project," Gallo’s message said, in part. "I emphasized how critical it was for him to listen and work with the neighbors. I also suggested that perhaps the best approach would be for Mr. Kahn to consider withdrawing his current site plan application and begin again by working with the surrounding neighborhoods on what would be appropriate for the property."

In the coming weeks, Kahn said he intends to see if the two sides can find common ground and reach a compromise.

"We’re not going away," Kahn said. "We have the right to do it, we want to do it and we think it’s a good place to do it."

Kahn said if the neighbors are "reasonable" he could file to build a smaller hotel, "or if they’re unreasonable, I could file (to build) the same project – or a larger one."

Kahn said the project as currently envisioned calls for about 130 hotel rooms, including a few that would be in Airstream trailers. He said some neighbors have taken that out of context and think he plans a trailer park, which he said is not the case.

He said residents also have concerns the project could harm Bull Creek, but he said he plans to build on only 5.8 percent of the tract, which is about 500,000 square feet in all.

"94.2 percent stays 100 percent pristine," he said. "Once people learn about that, they may be more comfortable. I think we’re being very responsible."

As for concerns about more traffic, Kahn said it’s the county’s responsibility, not his, "to make sure the roads keep up with the traffic."

Spicewood Springs is used as a cut-through for people coming from Cedar Park and Leander, he said. It is considered substandard, he said, because it’s too narrow and regularly floods in a number of areas.

Kahn said a boutique hotel would not generate a lot of traffic, and the traffic pattern wouldn’t coincide with commuter traffic.