PROVIDENCE, R.I. (WPRI) — The controversial luxury residential skyscraper project in Providence dubbed the “Fane Tower” will not be built.

The chairman of the I-195 Commission, Marc Crisafulli, announced Friday that the Fane Organization has opted not to continue with the project. The developers were in the middle of attempting to negotiate a new design approval with the state commission, ahead of a late March closing date for the $3 million sale of the land.

“The Fane Organization has informed us that they are no longer proceeding with the proposed development on Parcel 42,” Crisafulli said in a statement. “As a result, their contractual rights will lapse later this month. We appreciate the Fanes’ interest in investing in Rhode Island, and we look forward to making the parcel available for another developer.”

In a statement, developer Jason Fane said it was no longer feasible to move forward with the project “due to recent risk factors outside of my control.”

“I came to Providence with a vision for a great and iconic project that would provide much-needed housing, quality jobs, and revenue for local government and have worked long and hard to make it a reality,” he said in a statement. “I wish the I-195 Redevelopment District Commission, the City of Providence, and the State of Rhode Island success with their plans for further development in the I-195 District.”

Fane did not elaborate on specifics about the risk factors, and a spokesperson declined to comment further. But he previously said the old design was no longer feasible because of the increased cost to build the tower, prompting him to propose the new design in December.

The proposed 46-story luxury tower drew ire from residents for its height and design — it would have been the tallest building in Rhode Island — but had support from state leaders and unions.

It divided local elected officials, some of whom applauded development of new housing and jobs, while others said the tower didn’t align with the city’s comprehensive plan and did not contain any affordable units.

In 2018, former Mayor Jorge Elorza vetoed a zoning change approved by the Providence City Council, which was necessary for the project to move forward because of the height of the building. The council voted to override the mayor’s veto, and the dsaga caused state leaders to pass a law removing Providence’s zoning authority over the I-195 Redevelopment District.

The R.I. Supreme Court also weighed in last year, siding with Fane in a lawsuit from neighbors about the height issue.

Sharon Steele, the president of the Jewelry District Association and member of the group that sued, said she was “over the moon” at Friday’s news.

“We are not anti-development,” Steele said. “We are anti-bad development. This was a project that never should have seen the light of day.”

The proposal dragged on for years, even after the Fane Organization signed a purchase-and-sale agreement for the old highway land.

Fane repeatedly butted heads with the I-195 Commission over developmental and design deadlines. In 2020, Fane called on the commission to delay all development deadlines, citing the coronavirus pandemic. Nonetheless, Fane had been adamant that he was committed to the project and Providence, pegging the cost of the project at $300 million.

However, that estimate came long before the recent spike in inflation, which has driven up development costs across the country.

Fane said his new design was proposed as a way to keep the price at $300 million, but many doubted that he would be able to pull together the financing for the project.

The tower had long received the support from the building trades, which looked forward to a new massive development project in Providence. Senate President Dominick Ruggerio was also a strong proponent. Ruggerio said Friday he was “disappointed” the project wouldn’t move forward.

“The project would have provided badly needed housing and jobs, and helped to foster a vibrant downtown,” he said in a statement. “I always looked to the I-195 Redevelopment Commission to conduct their necessary diligence, but my concern with this particular project was that the developer faced numerous roadblocks separate and apart from that review process”

He also raised concerns with “the signal being sent to other developers,” suggesting it doesn’t look good when “we put up obstacles to development that take years to overcome.”

“In construction, time is money,” Ruggerio said. “When a developer is seeking to invest hundreds of millions of dollars in or capital city, we should welcome them, not chase them away.”

House Speaker Joseph Shekarchi echoed the disappointment, but said it he wasn’t surprised and called it “understandable.”

“As a land use attorney, I know the obstacles that developers so often face,” he said. “It is an extremely valuable piece of land and I’m confident it will be attractive to other developers. I’m optimistic about the future of biotech and  life sciences in our state, and that is prime real estate for potential growth in that field.”

It’s unclear what could be built next on Parcel 42, a prime piece of real estate on Dyer Street next to the new pedestrian bridge.

Mayor Brett Smiley urged the commission to market the site “quickly and aggressively,” calling it “one of the most important parcels” in the district being built on the former highway land.

“Providence is a great place to invest and our life science cluster is ready to take off,” Smiley said. “I’m confident that the I-195 Commission will find the right developer for Parcel 42 that will bring in new business and help us increase our housing stock at every price point.”

Crisafulli has previously expressed interest in courting commercial tenants. The 195 land has so far struggled to bring in much money from land sales; had it gone through, the Fane Tower would have been the largest sale by far at $3 million.

“The Commission is focused on building out the District in ways that enhance our great capital city and we are excited to deliver on our mission to foster economic development,” Crisafulli said Friday. “We have a robust pipeline of projects, including new lab and office space, which is a testament to the momentum we’ve helped build in Providence.”