Kathryn Hayes woke up last month to texts from her staff that developers had proposed a five-story building directly next to the Anchor Fish & Chips, the restaurant she co-owns in northeast Minneapolis.

Over the next three weeks, she and other business owners along NE. 13th Avenue, as well as surrounding neighbors, banded together to fight the project. Developer Solhem Cos. acquiesced Monday, dropping the proposal entirely.

At a time when apartment complexes are cropping up frequently in this part of Northeast, residents of the Sheridan neighborhood are declaring victory against unwanted development.

"The reaction from the neighborhood was just unbelievably explosive," Hayes said Tuesday. "I think everyone is just quite relieved."

Solhem, a local developer, has a complicated history in Northeast. It recently opened an apartment complex a few blocks away on Broadway Street, and will soon break ground on two buildings across the street that neighbors also vocally opposed.

The abandoned proposal would have replaced three duplexes and a parking lot next to the Anchor with 108 apartments, floor-level retail and underground parking. Solhem was asking the city to raise the maximum height on the site from three to five stories, according to planning documents.

Neighbors spread news of the proposal on Facebook. More than 120 people showed up at a tense Sheridan Neighborhood Organization meeting on the project in late August, and hundreds of people signed a petition to stop the project, Hayes said.

The building was "just a wrong fit, physically and aesthetically," Hayes said. There were concerns over its height and that its construction would cause "pretty severe" disruption for surrounding businesses.

"It belongs somewhere else, but not on that historical, small street that is already fairly congested," she said.

Council Member Steve Fletcher, who represents Sheridan, said any new project proposed on 13th Avenue would first have to get the support of the community.

"The reaction to this proposal was particularly strong because 13th Avenue is a very special place," he said. "Projects should be able to answer, 'How are we contributing to ... people's experience of this street that we've been really investing in?' "

Representatives from the Sheridan Neighborhood Organization could not be reached for comment.

Solhem owner Curt Guns­bury said that section of Sheridan was "a beautiful node and vibrant node in the heart of the city, and we wanted to make it more vibrant, for our purposes and the neighborhood's."

Rents for the majority of the apartments would have been slightly below market rate, he said. Making the building shorter and the housing and retail space more affordable, like the neighbors wanted, would not have been financially feasible, he said.

"There are better opportunities elsewhere in the metro to do projects," he said. "We do what we think is really beautiful, sustainable design. The answer is, we can't do that in this location."

The company has other projects under construction in the North Loop, Downtown East and along Central Avenue in Northeast. Gunsbury said he hopes to break ground on the apartments by Broadway Street in November.

The businesses and residents along 13th Avenue are tight-knit and supportive of each other, Hayes said. While she knows something will eventually be built next to her, for now, she is appreciating what happened — or didn't happen — in Sheridan.

"I'm so proud," she said. "My respect has just doubled for my neighborhood."

Miguel Otárola • 612-673-4753