The country’s economic crisis is crushing Wall Street and is starting to make life tough on Main Street. And in the South Sound, tough credit and sagging demand are changing plans on Bridgeport Way West in University Place, Maple Street in Sumner and 20th Avenue South in Federal Way.

Those are sites where local governments are planning or have started construction on multimillion-dollar, mixed-use development projects that officials hope will one day generate more tax revenue.

The nation’s economic crisis, however, has forced city leaders to re-examine their projects, or at least put them on hold.

Much of the problem involves banks not willing to finance developers for large-scale construction projects. Also, more cities are strapped for cash, and investing in a development while being forced to slash operations might not make sense.

Add to the mix the sagging retail-condo markets and taxpayers growing more impatient with each deadline extension, and local governments are stuck waiting with fingers crossed for the financial storm to pass.

“We all have to be real,” said University Place City Manager Bob Jean, whose city is still trying to make its Town Center project a reality. “I think we have to recognize that good things take time.”

“Town Center is going to go forward, but it’s going to open slower than people want,” he said.

UP’s $250 million mix of retail, condos, civic and other services is one of the most anticipated and controversial mixed-use projects locally. Officials first announced plans for it five years ago.

But for a number of reasons – including developers’ inability to open when the city wanted – Town Center’s site still sits bare, save for a multilevel parking center partially paid for with federal money. Now, the city is working with its fourth potential developer after the first three fell short. Last week, the UP City Council extended its exclusive negotiations with F+F Development to Jan. 21.

Both sides are still trying to iron out an agreement. Town Center remains on schedule to open some stores and services by 2011, with the rest of the project opening a year later, Jean said.

The potential developer says his retailers remain interested in opening in UP.

More importantly, said Nate Fishkin of F+F Development, lenders remain interested in financing Town Center. It’s just that the project will have to open in phases.

“It adds to the challenge of development,” Fishkin said of the economic crisis. “Development is not easy under any circumstance because there are so many moving parts, so this makes it a little tougher.”

SUMNER

UP Town Center isn’t the only local project fighting through the downward spiraling economy. In May, the Sumner City Council selected a local firm to redevelop a 1.98-acre block next to City Hall.

Officials chose Heyer & Morris Properties to develop the city-owned land into a multistory, $15.5 million, mixed-use development of retail, condominiums and parking. It was the former site of a Red Apple Market store.

Construction on the 19,000-square-foot project was supposed to start in February and take about a year.

But plans changed as the nation’s financial outlook soured, said Paul Rogerson, Sumner’s community development director. Now, officials and the developer are waiting to move forward.

“Essentially, we’ve agreed with the development partner that we should take things slow until the economy recovers,” he said.

FEDERAL WAY

In Federal Way, development of the city’s $250 million Symphony project has been on hold since July.

The City Council extended the negotiation period with developer United Properties of Vancouver, B.C., until September 2009.

Construction was scheduled to start in December on Symphony, which will consist of four skyscrapers up to 24 stories tall and will include condos and retail and office space.

United Properties vice president David Setton blamed the setback on the economy. In a statement released by the city, he admitted that “lenders have advised us to postpone the marketing and construction of the project,” adding that the delay would be temporary.

United Properties agreed to pay the city’s carrying costs of about $150,000 per year.

Bruce Mann, economics professor at the University of Puget Sound, predicts that more communities may have to delay their mixed-use projects until the economy improves. The trend has already started on the East Coast and in the Midwest.

Still, even if local governments delay construction of such projects, it doesn’t mean they’ll scrap them altogether.

“Most of these ideas are pretty good,” Mann said. “Things will come back up. It’s not like these were stupid ideas.”

Stan Finkelstein, executive director of the Association of Washington Cities, said he understands why communities such as University Place, where construction is already under way, are trying to push through tough economic times.

But that’s not the case for cities with only a vision for a mixed-use project.

“If I were a city contemplating a new town center, I would put that on the back burner for a year or two until the economy improves,” he said.

Brent Champaco: 253-597-8653