Lumberman's Investment Corp. said in a written statement that PGA of America gave notice that it was withdrawing its interest in the project, known as PGA Village.
Austin-based Lumberman's did not give any reasons for PGA of America's decision, but the golf group made it clear two years ago that it was uncomfortable with the local controversy that surrounded the 2,860-acre project.
PGA officials in Palm Beach Gardens, Fla., could not be reached for comment late Friday afternoon.
In 2002, a highly publicized petition drive collected enough signatures to force a referendum on tax incentives offered by San Antonio city leaders to encourage the northern Bexar County resort, planned in part on land that drains into the Edwards Aquifer.
Activists formed the group Save Our Aquifer to oppose PGA Village, saying it would endanger the region's main source of drinking water.
The PGA of America first pulled out in July 2002 because of the opposition, but later agreed to consider getting involved again if the project was restructured.
The resort called for as many as three golf courses, a golf school, hotels and several thousand residential units. San Antonio's business community strongly backed the resort, saying it would create hundreds of new jobs and expand the local tax base.
Lumberman's said it will now consider other uses for the land. The developer has said previously that it would build a high-density residential community on the land if PGA Village fell through.
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