Cleanup of an east Petaluma parcel of land is nearly complete, reviving the prospects for more than 100 housing units and a potential second commuter rail station.

Todd Kurtin, principal with developer Lomas Partners, said he has received a draft letter from the San Francisco Bay Regional Water Quality Control Board stating that his land at Corona Road and McDowell Boulevard is toxin-free. It is a key step necessary to developing the parcel, where Kurtin plans to add 112 residential units, including 15 percent affordable housing, and a 150-space parking area for a future SMART train station.

“I wanted to get the SMART parcel signed off,” Kurtin said.

As Kurtin continues developing the site, a lawsuit is moving forward with SMART that could prevent a station at that site. A deal between Kurtin and SMART to build a parking garage at the Corona Road site in exchange for development rights to a downtown Petaluma property SMART owns fell apart earlier this year.

SMART claims Kurtin breeched the contract by changing the design of the proposed Corona parking lot. Kurtin claims SMART unilaterally walked away from the deal without considering other options. A trial is scheduled for May.

Meanwhile, Kurtin is planning on submitting a development plan to the city next month for the housing project, which is adjacent to the 200-unit Brody Ranch development already under construction. Kurtin said his proposal will carve out space for a 150-space parking lot adjacent to the train tracks, should SMART approve a second Petaluma station at the site. If not, he said the lot could accommodate housing.

“I’m moving forward with the entitlements,” he said. “I’m saving an area for the SMART parking. The best-case scenario, we work something out with the parking.”

SMART originally asked Kurtin to design a 2-story parking garage with the same amount of parking on the side of the parcel farther from the proposed station. Farhad Mansourian, SMART’s general manager, said he couldn’t talk about specifics of the case due to the pending lawsuit. He said there has been no communication with the developer during the legal proceedings, but SMART would be open to considering alternatives.

“If something is put in front of us that is in our best interest, we’ll consider it,” he said. “Our position is any station in that area would be fantastic for Petaluma.”

SMART in the past has had discussions with Cornerstone Properties, which owns the Old Adobe Lumber on Old Redwood Highway across from SMART’s headquarters. The developer wants to turn the property into a maker space, like Sebastopol’s Barlow, and add a SMART station.

Kurtin said he is “hoping to work something out with SMART,” to restart the deal that will result in the Corona Road station. He had planned to propose 300 apartments and 75 additional parking spaces on the SMART-owned downtown lot adjacent to the SMART station between D and East Washington Street, but that project remains in limbo due to the lawsuit.

“The downtown project is totally on hold,” he said.

(Contact Matt Brown at matt.brown@arguscourier.com.)