Koll Scrubs Plan to Build Condo Tower : Redevelopment: Financing troubles cause developer to pull out of Huntington project.

Downtown San Diego redevelopment officials said Friday that the Koll Co., developer of a much-debated proposed high-rise condominium on lower Broadway, has dropped the project because it couldn’t be financed.

The news, however, might not be all bleak. A competing developer, whose high-rise apartment proposal for the same prime piece of city-owned land came in second, said Friday that he is ready to go forward with his project.

The dead project, a 36-story, $91-million luxury condominium building called the Huntington at the southwest corner of Broadway and State Street, was proposed by the Koll Co. and Davidson Communities Inc. It barely won approval over a proposed high-rise apartment complex in a protracted development competition conducted by the city last year.

Koll Vice President William R. (Biff) Porter notified officials at Centre City Development Corp. late Thursday in a brief letter that financing was unavailable for the project, which was planned to have 168 residential units ranging in price from $350,000 to $1 million. CCDC is the government agency in charge of downtown redevelopment.

Thursday was the deadline for the company to make a $150,000 non-refundable deposit with CCDC in order to keep its contract with the city valid.

The letter did not specify the difficulties in obtaining financing, and Porter was not available for comment. CCDC officials said they also did not have any specific information about Koll’s problems in financing the Huntington.

At the time of the development competition, CCDC economic consultants cautioned that financing another luxury condominium project downtown would be difficult, especially because it might take six years to sell all of the Huntington’s units. But Koll officials said they expected a three-year sellout and were optimistic about obtaining loans to construct the 1930s-style tower.

The Huntington was selected by CCDC and the City Council last year by one-vote margins over its closest competitor, a 30-story, $44-million apartment building called 900 State Street proposed by developer A.J. Lirot of El Dorado Asset Management and his partner at the time, Trammell Crow Co.

The Huntington came under criticism for its height. At 490 feet, the project particularly angered developers of the Emerald-Shapery high-rise office and hotel complex across the street on Broadway.

The Huntington also drew fire because it was a condominium project. Some council members said the downtown was more in need of apartments such as those embodied in Lirot’s proposal, which also included a day-care center.

City officials, including city architect Mike Stepner, said the choice was between two very good projects. For a while, the City Council was deadlocked, and Mayor Maureen O’Connor said that perhaps the city should “go back to square one.”

But CCDC officials found the suggestion disquieting. The CCDC board of directors had recommended that, if the Huntington were rejected, the council should approve 900 State Street. Pam Hamilton, chief of CCDC, told the City Council last November that going to its second choice was better than starting the bidding process again.

Hamilton was out of town Friday, but David Allsbrook, CCDC project director, said Hamilton will meet with a CCDC board of directors committee to discuss “alternative development possibilities” for the site.

“The site is still a hot spot for development,” said Allsbrook. The corner is surrounded by the towers of downtown’s resurgence, which has taken hold on lower Broadway.

Lirot said Friday that he remains ready to jump back in and build his apartment building and hopes that CCDC will follow through on its recommendation last year to the City Council.

“We’re still poised and ready to go. We’ve already lined up our financing,” Lirot said. He said his previous partner, Trammell Crow, would not be part of any new development.

Lirot’s project was favored by several members of the City Council because it was shorter--at 400 feet--more slender, offered reasonably priced apartments that could be rented by downtown workers, had more units--287--and, as an apartment building, would be easier to finance.