Proposals for the 6,000 acre Plum Creek plot were set to be aired at the Californian town's board meeting.
The unpopular purchase of the land and planned development as a potato farm had already been initially rejected by town officials.
But despite the withdrawal Heartland Farm representatives still attended the meeting to listen to residents' concerns.
More than 200 Saratoga residents objected to the proposals claiming water quality and levels would be affected.
Owner Jeremy Pavelski said improvements in pesticides and herbicides meant the environment would not be damaged and that he drank from local water sources too.
He added: "We're not going to be your neighbours if you don't want us to be your neighbours."
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