Downturn stalls U-Md.'s plans for upscale East Campus district

The University of Maryland has suffered a setback in its plan for East Campus, a proposed district of upscale restaurants, shops and housing that it hopes will build a stronger sense of a college town in College Park.

The university and developer Foulger-Pratt/Argo Investment have ended their exclusive negotiations, the two organizations said in a joint statement released Friday.

"Despite best efforts, the current economic downturn and difficult financial and real estate markets preclude an East Campus development on the schedule and scale the parties envisioned," the release states.

The university selected the developer in 2007 to build East Campus, billed as a $700 million project covering 38 acres, twice the size of the corridor first redeveloped in downtown Silver Spring. There were plans for an upscale grocery store such as Whole Foods, a 500-seat music venue, an art house movie theater, a luxury hotel, a bookstore and assorted sit-down restaurants. The area, east of U.S. 1 near the university's fraternity row, includes old student housing, abandoned research greenhouses and maintenance buildings.

University officials pledge to press on with East Campus. They said Friday that the developer had "accomplished much in the predevelopment phase that will be central to the future success" of the initiative.

University spokesman Millree Williams said economic shifts compelled the school to break the project into smaller pieces.

"What we're trying to do now is find a way to get the development done in chunks, and then finance the chunks," he said. Williams said retooling the project might postpone its completion. Initial plans called for much of the work to be finished by 2011.

The project is high on the agenda of university President C.D. Mote Jr. and viewed by school officials as essential to raising U-Md.'s currency as a top state university.

According to the release, a plan to relocate the facilities occupying the East Campus district will be complete by the start of next year. The project's first phase also includes collaboration with the Maryland Economic Development Corporation on a 650-bed graduate student housing complex and a commitment from the Birchmere to operate an entertainment venue.

The project "remains at the forefront of our efforts to build a world-class research institution for the residents of Maryland," Ann G. Wylie, university vice president for administrative affairs, said in a statement.