The Petaluma Neighborhood Association on Friday withdrew its appeal of the approvals for the Friedman's-anchored Deer Creek Village Shopping Center after reaching a settlement with the developer, Merlone Geier Partners.

The City Council was scheduled to hear the appeal on Monday, but the city announced today that the hearing has been cancelled in light of the appeal being withdrawn.

"On behalf of the Petaluma Neighborhood Association (PNA), I'm happy to let you know that PNA and Merlone Geier Management LLC have reached a settlement regarding the Deer Creek Village project," wrote an attorney for the Petaluma Neighborhood Association in a letter sent to the city on Friday.

The settlement came as a result of negotiations between the Neighborhood Association and Merlone Geier Partners.

The association agreed not to file the appeal in exchange for additional traffic mitigations and charitable contributions to organizations that serve the Petaluma community, Merlone Geier Partners spokesman Marko Mlikotin in a statement.

In an an email sent Friday, Paul Francis of the neighborhood association said that Greg Geertsen of Merlone Geier Partners had made it easy to come to an agreement.

"He was open to some of the mitigation measures that some of the east side residents had suggested and to some of the pedestrian improvements that we were looking for to make the project more accessible to our community," he wrote, adding that the settlement was "a win-win situation for all parties involved."

"The community improvements will certainly make the project more viable in the long run," he wrote.

Geertsen also expressed that the agreement was in the best interest of Petaluma, stating in a press release, "In this tough economy, no one stands to benefit from project delays and a lawsuit." He added, "an agreement has been reached that ensures Friedman's return to its hometown, 800 jobs and millions of dollars in additional city revenue that can help rebuild Petaluma's roads and help protect its neighborhoods and schools."

Francis emphasized that his association supported Friedman's coming to Petaluma and wasn't "anti-development," but rather wanted to make sure that new development had the least amount of impact possible to the community.

Having secured all the needed approvals for the project, Merlone Geier Partners says it will seek permits to begin phase one construction in early 2013. Construction of the Friedman's Home Improvement store should take approximately 8-10 months, Mlikotin said.