D.C. Mayor Vincent C. Gray’s economic development chief has terminated negotiations with the companies tasked with redeveloping the Park Morton housing complex along Georgia Avenue, saying the project has been unacceptably delayed.

The developers, Landex Corp., of Linthicum, Md., and the Warrenton Group, based in the District, were chosen in 2009 for an ambitious plan to overhaul the 174-unit public housing community a block east of Georgia Avenue and south of Park Road in Northwest Washington.

At the time, Landex executives said they planned to build some 500 units, including replacement units for public housing residents. More than four years later, they have built only 83.

In a Feb. 6 letter to Peter S. Siegel, Landex president and chief executive, Deputy Mayor Victor L. Hoskins said he was done waiting. “The District has determined that the reasonable timeframe for progress of negotiations and achievement of redevelopment objectives has expired,” Hoskins wrote.

In response, Siegel wrote that he was “unfamiliar with the timeframe to which you are referring” and said his company was making progress on the project despite difficult political and economic circumstances. The Park Morton project is part of the New Communities Initiative, an affordable-housing strategy first conceived by the District in 2005 to replace blighted public housing projects with mixed-income communities. None of the four neighborhood renewal projects in the initiative has progressed on time, and the city recently extended the deadline for completion by at least six years.

The termination of the Park Morton contract “is a setback, no doubt this is a setback,” said D.C. Council member Jim Graham (D-Ward 1), who spearheaded the effort to make Park Morton a part of New Communities. “It took a long time to get to this point, and now we have to start all over again.”

The letter of termination, which developers said came as a surprise, was received five days before city staff is expected to explain progress on New Communities during a budget oversight hearing Tuesday. The chairwoman of the city’s committee on planning and economic development, mayoral candidate Muriel Bowser (D-Ward 4), has battered city staff and Gray during the past year as reports surfaced about the initiative’s failures.

Siegel attributed part of the project’s difficulty to “confusion and mixed messages” from Hoskins’s unit, the D.C. Department of Planning and Economic Development (DMPED).

He said no one in the city had indicated Landex was at risk of losing the deal. Siegel said the city did not return calls and e-mails requesting comment.

Housing director Adrianne Todman declined to comment through her spokesman.

“We certainly understand and strongly support the District’s needs to replace a majority of its aging public housing portfolio with good quality, well-managed, sustainable, mixed-income communities that will support the neighborhoods,” Siegel wrote. “We recognize how mammoth a task this is. Thus, despite the confusion and mixed messages from DMPED, we have put our best efforts forth to diligently work to achieve the District’s goal and have kept the District, via its staff and its consultants, informed of our substantial progress.”

Even when New Communities was approved, city staff knew it would be a tall order to raze a property that houses 174 units to build a mixed-income complex with nearly 500 units.

Instead, the city said it hoped developers would be able to persuade nearby businesses to sell their properties on at least three swaths of land in the neighborhood. There, they’d build more housing.

Those plans never materialized. Nestled in the center of one of the most vibrant real estate markets in the city, businesses held on to their properties in hopes of getting more money, officials said.

In 2012, Landex and Warrenton Group completed the Avenue, an 83-unit building at 3506 Georgia Ave. NW that includes 27 units set aside for current Park Morton residents.

A year ago, the Warrenton Group announced that it had inked agreements with landowners along Georgia Avenue, including a dental clinic and a tire store, to expand the project.

But no additional construction has started, and the presence of The Avenue has provided little comfort to those living in Park Morton.

Even though the city has shelled out more than $370,000 dollars to provide counseling and job training to ready Park Morton residents for their new housing, only 10 residents have moved into the building.

Some residents didn’t move because of the building’s rules against smoking. But for others, it was a practical impossibility. Park Morton is primarily two-bedroom apartments, yet residents were offered one-bedroom units to replace them.

Park Morton’s housing project remains a desolate, dingy complex whose residents have lost faith in the plan designed to help them.

“The living conditions are terrible,” said Neecy Boone, 61, who has been living there since 2011.

“We have so many rats. Rats everywhere. One bit me and one bit my grandbaby. They promised me an exterminator, but I’ve been waiting two years. Something needs to be done. We need justice.”