Glendale Galleria owner General Growth Properties Inc. has dropped its legal opposition to Caruso Affiliated Holding’s development of a mixed-use project on Brand Boulevard, according to officials at Caruso Affiliated and the city of Glendale.

With one of the last impediments to the project cleared, Caruso will proceed with plans to demolish the remaining structures on a 15.5-acre site across the street from the Galleria. Construction of the project, called Americana at Brand, is expected to cost $264.2 million and be completed in 2008.

Demolition had been put on hold after General Growth filed a lawsuit in Los Angeles Superior Court in May 2004 challenging the city of Glendale’s environmental review of the development. General Growth appealed to the Second Appellate District, where a three-judge panel upheld the lower court’s opinion.

General Growth could have appealed once again to the California Supreme Court by Dec. 27 or requested that the appellate court review its decision. But the company faced an uphill battle and elected to halt its legal actions, said Rick Moses, a senior vice president at Caruso.

“The project can go forward,” said Moses. “It is not a surprise. They pretty much had given up because the case had no merit.”

Gillian van Muyden, a Glendale senior assistant city attorney, confirmed General Growth’s decision not to proceed with a further appeal. A spokesman for General Growth could not be reached for comment Monday.

Since buying the Galleria about three years ago, General Growth has spearheaded a campaign to stop Caruso from building the Americana. General Growth collected enough signatures to put the project up to a city-wide vote.

Both Caruso and General Growth shelled out over $1 million to sway the vote in their direction. Voters narrowly approved the project in a special election last year, prompting General Growth’s legal action.

The legal challenge has delayed the project two years. When it is constructed, the Americana will have 338 residential units and 475,000 square feet of retail, dining and entertainment space.

General Growth will still have to face a $40 million lawsuit filed by Caruso accusing General Growth of anticompetitive and antitrust practices. That case is in the discovery phase and is expected to go to trial next year.