Stonington ― A controversial affordable housing project planned for downtown Pawcatuck has been scrapped, according to the company planning the project.

“We are no longer pursuing this opportunity. It's been a pleasure working with Town officials to this point, but unfortunately there was no path forward for our project,” said Matt Robayna, senior project director for WinnCompanies of Boston on Friday.

Winn decided to cancel the project in late June after the fully permitted development on the former Campbell Grain Site at the end of Coggswell Street was denied a tax credit by the Connecticut Housing Finance Authority in late April.

"While the location offered a unique opportunity to provide attainable housing in walking distance to so many amenities, I hold onto the hope that one day this long vacant site will attract investment that will further enhance our downtown village," said First Selectman Danielle Chesebrough on Friday.

The CHFA low-income housing tax credit program provides tax incentives for the construction or renovation of affordable housing for low-income individuals and families in Connecticut and would have covered between 50% and 60% of the project cost.

Under the program, which uses a point system to rank applicants on various criteria, developers can receive tax credits that can be used to reduce their federal and state tax liabilities. In exchange, the developer agrees to keep rents at affordable housing limits set by the U.S. Department of Housing and Urban Development, helping to increase the availability of affordable rental housing for low-income residents in Connecticut.

Robayna said that the 70-unit, age restricted, 100% affordable housing community approved by the Planning and Zoning Commission earlier this year did not score enough points to be awarded the credit, and the project faced a great deal of competition from other proposals that, unlike the Pawcatuck project, had strong local support.

An initial plan to build a 82-unit, affordable housing development faced strong opposition due to traffic and parking concerns, restricted access on the narrow street and a location next to the railroad tracks. Critics also said the building would be too large and unattractive, and questioned why more affluent areas of town, such as Mystic and the borough, do not host any affordable housing.

Residents also rejected a $697,748 tax break over 10 years for the initial 82-unit, affordable housing development at a referendum last year.

Affordable housing is housing that is affordable to people who earn 80% or less of the area median income. A single individual earning 80% of the area’s median income, $63,000 per year, would pay $1,500 per month in rent.

“We believe strongly in the housing market in eastern Connecticut and clearly see the ongoing need for affordable and workforce housing. We have been developing and managing apartment complexes in Connecticut for 40 years, and we will continue to work with municipalities and other partners to identify opportunities in the future,” said Robayna.