A downtown project is derailed by the decision to reduce the number of supercenters being built.

An urban-designed Wal-Mart Supercenter proposed for the eastern part of downtown has been scrapped, killing a proposal to redevelop the East Village, officials said Thursday.

News that Wal-Mart will not build a supercenter downtown -- or anywhere in Tulsa -- shocked developers who were planning it as an anchor tenant for a proposed mixed-use redevelopment project.

John Williams, one of the principal developers of the East Village area, said Thursday that he was notified Monday night of Wal-Mart's decision.

He said his partner, Tom Seay of Arkansas, told him, " 'You're not going to believe what happened. Our deal, it looks like it's dead.'

"I was truly shocked. I've been working on this for 18 months," Williams said.

Seay said he doesn't know what will happen now with the property that has been secured. He said he has several hundred thousand dollars invested in the project.

Tulsa is one of many cities across the nation hit by Wal-Mart's move to reduce the number of new supercenters it constructs nationwide, said Angela Stoner, Wal-Mart's senior manager of public affairs.

"This is no reflection on the confidence Wal-Mart has in our friends in the development team of the East Village, the mayor, the City Council, neighbors or others involved in this project," Stoner said Thursday.

"This is the execution of a national growth strategy plan -- a corporate decision," she said.

The plan is specific only to new supercenters, she said, and none is planned for Tulsa.

Although Wal-Mart had announced its reduction plan in June, it had also approved the construction of the proposed supercenter for the East Village, which resulted in the developers announcing the project in August.

Stoner said an Oct. 23 meeting to review the strategy plan led to the corporate decision affecting Tulsa, which was announced this week to developers and city officials.

Stoner said it is too early to know what the next step for Wal-Mart will be in Tulsa.

"What is great about Wal-Mart is that we're always looking for new opportunities," she said. "Our focus is on better serving our customers and providing community support."

Williams and Seay have purchase options on about 15 acres of land in east downtown owned by Bill White, owner of a former car dealership, and the Nordam Group, an aerospace component manufacturer.

The property sits between Frankfort Avenue and U.S. 75 between Fourth and Sixth streets.

Jay Helm, president of American Residential Group of Tulsa, also announced in August that his firm would join the Williams and Seay project to construct 150 high-quality apartments.

"Obviously this news has caught us all by surprise," Helm said. "It's business and they have to do what they have to do, but it's frustrating."

Helm said the developers were ready to move on the project and the city was about ready to go.

"Now it's over. It's too bad for Tulsa," he said.

Seay said he and Williams had built a great relationship with the city and had anticipated approval of tax-increment financing needed to move the project.

"Wal-Mart's decision was totally independent of us and the city," he said. "Anyone that works in corporate life has been through decisions similar to this, and they know these things happen."

Seay said it is now "just a matter of figuring out how to make the best of what is a difficult situation and I'm not sure how to do that, but I'm working on it."

Economic Development Director Don Himelfarb said the city has spoken to all of the principals "and we are actively engaged in trying to make something happen on the east side of downtown."

Himelfarb would not say whether the East Village area would again be considered as a possible future home for the Tulsa Drillers.

In the summer of 2006, Global Development of Washington, D.C., proposed transforming 34 acres, which included the parcels now under option with Seay and Williams, into a mixed-use development that would include a new minor-league baseball stadium to house the Drillers.

Global had issues with some of the land purchases, allowing Williams to come in and negotiate sale contracts on land Global had planned for the stadium.

P.J. Lassek 581-8382
pj.lassek@tulsaworld.com