Stonington ― A controversial affordable housing proposal for the site of the former Rosalini’s nightclub in Pawcatuck has been scrapped by the developer.

Fair Housing of Connecticut, LLC, of Trumbull, whose principal is Eugene Arganese, withdrew an application to build a 102 unit affordable housing development on the former nightclub property at 215 Liberty Street (Route 2) on Monday.

Arganese is the owner of Arganese Cigars, based in the Dominican Republic, and several Misquamicut businesses including the Sandy Shore Motel and Gino’s by the Beach restaurant on Atlantic Avenue, among others.

Residents stopped a strip club from opening on the property in 1999 and since then it has operated as a series of restaurants and clubs, the last of which brought back the Rosalini’s name but closed in May.

The proposal, which included 31 affordable housing units was the latest affordable housing project proposed for Pawcatuck. Village residents complain their area already hosts most of the town’s affordable housing.

Affordable housing is housing that is affordable to people earning 80% or less of the area median income, which is $63,000 a year for a single individual. Approximately 6% of Stonington’s housing is considered affordable.

Since it was introduced in September 2023, the proposal met with strong opposition from the community, despite numerous changes made to the plan for the 4.2-acre Liberty Street site.

Local residents expressed numerous concerns, including the density of the planned 102 three-bedroom, 2.5-bathroom, attached single family homes, traffic, lack of green space, safety of pedestrians, children and residents and the potential threat to public drinking water supplies.

The property sits on a sole-source aquifer that provides drinking water for Pawcatuck and Westerly residents.

A sole-source aquifer is an Environmental Protection Agency designation for a source of water in an area that has no other reasonable source of drinking water should the aquifer become contaminated.

Residents argued that storm water runoff could contaminate the aquifer, and the majority of 136 separate areas of concern cited in a third-party review of the project were related to storm water management, groundwater and aquifer protection.

Attorney Matthew Ranelli, in a letter to the commission withdrawing the application, said that Fair Housing was committed to bringing affordable housing to Stonington. He said the developer would continue to examine its options for the site and may resubmit an application at a later date.