By Monica Chen

mchen@heraldsun.com; 419-6636

DURHAM -- The developer of University Marketplace is hoping support from the city and county could help move the project forward.

The project, on hold now for more than a year, was planned as a mixed-use development of up to 150,000 square feet of commercial space, up to 388,000 square feet of homes and up to 75,000 square feet of offices on the 15-acre tract across Shannon Road from the South Square shopping center.

Charlotte-based developer Hawthorne Retail Partners originally planned to put $75 million into University Marketplace.

Shoff Allison with Hawthorne said in an e-mail this week that the project currently "doesn't make financial sense due to the significant decline in commercial real estate values."

"It is highly unlikely that University Marketplace is developed without some incentives/partnership from the city and county," he said. "Given the project's anticipated economic impact to the South Square area, City of Durham and Durham County, we are hopeful these economic incentives will come to fruition."

According to the economic impact analysis conducted by Hawthorne, a completed University Marketplace would net the city and county $652,100 more in tax dollars each year. The development itself would be worth $56 million.

City officials confirmed this week that Hawthorne was in discussion with them this summer on possible incentives. Deputy City Manager Keith Chadwell said the answer to Hawthorne for incentives was negative at that time.

"The resources are not there at this point," he said.

"We were unable to meet this request because the gap in project financing exceeded the availability of any incentives we could provide," Kevin Dick, director of Office of Economic and Workforce Development, also confirmed in an e-mail.

While downtown developments have a specific fund to draw from for incentives, any incentives that could be given to Hawthorne in the future will have to come from the General Fund, Chadwell explained.

Chadwell said that talks could resume in the future. "It is my understanding that when the talks ended, it wasn't a severance of ties," he said.

Since plans were announced for University Marketplace in fall of 2007, Hawthorne has acquired and renovated Shannon Plaza, now called Hope Valley Square, and assumed management of The Courtyard in Chapel Hill.

Nearly two years ago, Sitar India Palace became the last tenant at the formerly Kroger-anchored shopping center.

Since then, the popular Indian restaurant has moved across U.S. 15-501 to assume the standalone building formerly occupied by Lone Star Steakhouse.

P.C. Davis, one of the owners of Sitar, said Friday he felt lucky the restaurant had moved out when it did but said he still trusted that Hawthorne could build the development.

"We definitely want them to do something," Davis said. "That property laying there empty does not help anyone."