The battle has been going on for nearly five years now, and residents who have fought tooth and nail against the plan won't be happy.
The city says it cannot stop the Ashby High Rise from being built at the corner of Bissonnet and Ashby.
Residents in South Hampton are just getting these letters from the mayor's office in their mailboxes.
In fact, we were with quite a few people while they opened them. Their reaction was not pleasant.
In the letter, the mayor says unfortunately the city has no legal basis to stop developers from building the Ashby High Rise. The letter reads "I am accepting the advice of city legal counsel and recommending the settlement of the lawsuit."
The terms of the settlement are outlined in that letter. They include the city permitting a 21-story high rise. consisting of 228 residential units and about 10,000 square feet of restaurant space and four town homes.
As part of the settlement, the project won't be on as big a scale as the original plans called for.
But this project has been an ongoing battle. When it was first announced, neighbors protested and the city denied 11 permits over two years because people living out here complained because they say this project will increase traffic and noise in their neighborhood.
This latest news, they say, is disappointing.
"It was a shock and a surprise, I guess, to us to see the city's position on this. We never expected the city to stop this project, we didn't think that it necessarily intended to or had the authority to stop the project. But we did expect them to mitigate the impact of what we consider to be an inappropriate project," said Jim Reeder, co-chair of Stop Ashby High Rise.
Buckhead Investment Partners said in a statement, "we are encouraged by the progress that's been made to date," but could not comment further until it's been filed in court.
But there is more pending litigation hanging out there on this issue.