Hollar ruled at a hearing on Thursday that there were fatal flaws in the appraisal process used by the government to determine the fair market value of the 21.5-acre Smith Bay property. The property's title also never transferred because the $4.1 million check, which was supposed to have been deposited with the court registry, sat in a safe at Superior Court instead. Hollar said she had no choice but to invalidate the purchase.

Reliance plans to build eight six-unit rental apartment buildings and 12 duplex townhomes for sale on about eight acres of land across from Johnson’s Bay, along the southern shore of Coral Harbor.

Plans for the development also include construction of reverse osmosis and waste water treatment plants, and renovation of the existing senior center.