Mystic — The developers of the controversial Smiler’s Wharf project announced Tuesday that they have withdrawn their application for a zone change and master plan approval, effectively halting the project.

The withdrawal came as the Stonington Planning and Zoning Commission was prepared to resume its public hearing on the plan Tuesday night at the high school. That hearing was canceled and the commission will not need to make a decision on the application that would have paved the way for one of the most expensive projects in town history.

"While we still believe in our vision for a vibrant mixed use waterfront redevelopment of the property, we do acknowledge the public opposition to the project, the vehemence of which admittedly caught us off guard given the lack of public engagement through May of this year," John Holstein, Abby Holstein Boardsen and Harry Boardsen, the principals in the project, wrote in a letter to PZC Chairman David Rathbun in withdrawing the application. "We especially feel that the comments of some select opponents, which have been fundamentally unfair and directed personally, are divisive and damaging to the reputation of this close knit community."

"As longtime residents and business owners in Stonington, it is both disappointing and frustrating to be publicly attacked for wanting to reinvest in and make our village of Mystic a better place. Reasonable people can agree to disagree as to whether Smiler’s Wharf should have been approved, but the efforts of some in their opposition to the project to try to destroy our reputations as well as those of elected officials, Commission members, and town staff have no place in civil public discourse," they wrote.

"Quite frankly, the cheering and jeering of these select opponents and their repeated refusal to adhere to the Commission’s rules and time limits during the public hearings on the application was an embarrassment," they added, a reference to opponents’ objections to the commission's initial two-minute time limit on speakers.

The developers said their firm intends to step back from the project at this time, reassess their options and re-engage with the community before returning to the commission at a later date to explore options for the Seaport Marine site on Washington Street.

During the first two nights of the public hearing, opponents had attacked various aspects of the project — from its effect on the character of Mystic, the environment and flooding, to increasing traffic and congestion and the height of the buildings, one of which would have been 72 feet tall. They stressed the project was not in compliance with the town’s Plan of Conservation and Development and the state’s Coastal Area Management Act.

Neighbors and opponents had especially criticized the project through the use of social media, especially the Stonington Community Forum Facebook page.

In addition, they had presented to the commission a petition signed by owners of at least 20 percent of the property within 500 feet of the site. If the signatures were certified, this would have forced the commission to approve the zone change application by a 4-1 vote instead of a 3-2 margin.

Paul Sartor, who lives across the street from Seaport Marine and opposed the zone change request, said Tuesday he was happy but not surprised by the withdrawal. "They really didn’t have a choice. They could have either withdrawn or be defeated," he said.

Sartor added that he would have preferred to see the process continue and the commission deny the zone change.

Rathbun said Tuesday that it was the right decision for the Holstein-Boardsen family to withdraw its application. He said the commission could have begun modifying aspects of the plan but added, "we’re not designers." He said the commission had a long list of questions it was prepared to ask Smiler’s Wharf attorney Bill Sweeney and the development team if Tuesday’s hearing had gone forward.

"I think now is the time for them to get together with their neighbors and work with them. That approach worked well with the Perkins Farm," he said, referring to the residential-medical campus project under construction off Jerry Browne Road.

For decades, the Lattizori family faced resident opposition as it made several unsuccessful attempts to gain approval to develop the farm for a variety of commercial and residential uses. That changed when David Lattizori undertook an extensive effort to talk to neighbors, especially opponents at the Stone Ridge retirement community across the street, about what type of project would be acceptable to them. That has resulted in a project that features a Hartford Healthcare facility, townhouses and apartments and preserves half the site as open space.

Sartor said he would be willing to sit down and talk with the owners of Seaport Marine about a new plan. But he said any proposals need to conform to what is allowed in the existing marine commercial, or MC-80, zone and what is recommended by the town’s Plan of Conservation and Development. The more than 400 people who have signed a petition opposing Smiler’s Wharf also have asked the town to remove the MC-80 zone from the zones where the floating Neighborhood Development District can be located.

The project had called for rezoning a 7.5-acre portion of Seaport Marine’s 11-acre site off Washington Street from marine commercial to Neighborhood Development District and obtain approval for the master plan for the site.

The plan had called for the demolition of all buildings on the site except for the popular Red 36 restaurant and construction of a five-story, 45-unit hotel; a 16,590-square-foot, three-story marine service and community event space; a three-story, 200-seat restaurant; a six-story, 25-unit apartment building; 16 townhouses; six units of multifamily housing; a kayak rental building; an open-air plaza; a park; 120 boat slips; a 200-foot public boardwalk extension; 130 feet of new coastal access; a new boat basin that would require the removal of 13,000 square feet of land and a new bulkhead to protect against storm surge. Services now located at Seaport Marine would have been moved to Noank Shipyard.

Supporters of the project who spoke on June 17 say it would increase the grand list, create jobs, revitalize a property that contains deteriorating boatsheds, increase public access to the water and improve coastal resiliency.

In their letter to Rathbun, Holstein and the Boardsens also said they wanted to "respond directly to some of the more egregious misrepresentations and false statements made by opponents and local commentators regarding the project."

They said the suggestions by opponents that they did not reach out to neighbors to gain their support for the project are untrue, saying that they invited neighbors last year to a meeting to review the conceptual plans and voice suggestions and concerns. But they said that, with the exception of one neighbor, they were "rebuffed and ignored." They went on to list the other public discussions they have had on the project and their efforts to contact neighbors that resulted in little or no feedback.

They also stated that the "accusation that our company intentionally sabotaged our boat repair and storage business over the last 15 years so that we would be well positioned to propose the Smiler’s Wharf project is similarly false, and quite frankly, ludicrous."

They stated they have invested $15 million in the property to date and that it makes economic sense to relocate the boat repair and storage operations to Noank Shipyard.

"Again, the false narrative put forward by select opponents that our company purposefully ran these parts of our business into the ground to obtain some type of advantage in the land use permitting process is irresponsible. These uses will be relocated regardless of this withdrawal and that will provide an opportunity for redevelopment in the upland areas of the site. We have the right to use that land for any lawful purpose and fully intend to do so," the letter states.

Third, they stated that a letter from the state Department of Energy and Environmental Protection, which raises numerous concerns about the project and recommends it not be approved, has been mischaracterized by opponents. They said DEEP’s recommendations are not binding on the commission and added that the letter is "simply wrong and ignores critical facts of the development."

DEEP recommended the PZC not rezone the property and that it is appropriately zoned for a boatyard use. It added that rezoning the site would result in the loss of water-dependent uses and place residences in a flood zone, which would expose more people and property to risk. The DEEP has said it will not approve new bulkheads or flood control structures for the site if a hotel or residential development is built there.

j.wojtas@theday.com