Nordstrom Inc. has pulled out of downtown Cincinnati.

        The Seattle-based retailer on Wednesday told city officials it would put off for at least a year any discussions to build a department store downtown, dumbfounding council members and ending a seven-year courtship to build the desirable but elusive merchant there.

        Mayor Charlie Luken was more direct.

        “The deal is dead,” he said before Wednesday's City Council meeting. “Nordstrom's has pulled out.”

AT A GLANCE

• The decision: Nordstrom, citing concerns about its current operations, decides to delay building a downtown Cincinnati store for at least a year.    • The reaction: Surprise by city officials, who differ on what to do next.    • The Deerfield Twp. store: Plans to build in Warren County unaffected by decision.

        Nordstrom's board of directors on Tuesday decided to suspend indefinitely talks on locations in downtown Cincinnati and downtown Pittsburgh.

        “This is not something we knew was coming,” City Manager John Shirey told a stunned City Council on Wednesday, adding that he expects there will be a “tendency to somehow blame the city for this.”

        But the retailer, which has been struggling against declining profits and weak sales, said it wants to focus on improving its existing stores after recently appointing a new chief executive and top management.

        A second area Nordstrom, proposed for Deerfield Township, is apparently not affected by Tuesday's decision.

        “(CEO) Blake Nordstrom and his management team have been reviewing our company strategy, including real estate, and felt that downtown Cincinnati and downtown Pittsburgh were two projects that didn't make sense,” said Paula Weigand, Nordstrom spokeswoman. “It's not a reflection on the project. It's really a reflection on our business needs.”

        Council members, who in June approved a $48.7 million incentive package to lure the coveted retailer to Fifth and Race streets — which is now marked by an open pit and a chain-link fence — immediately started talking about alternatives for the site.

        “This is not good news any way you look at it,” Mr. Shirey said. “I don't want to mislead people into thinking this can be worked out in a few months. This puts off the development of the site for at least a year.”

        Nordstrom told site developer Eagle Realty Group that it may be interested in revisiting the downtown site in a year — though a year could be a minimum.

        “I don't think I can count on that,” Mr. Shirey said.
       

No stores interested

        In the meantime, Eagle will decide whether to pursue development of the site with another retailer, develop the project as non-retail or wait for Nordstrom.

        “We need to look obviously at all the alternatives,” said Tom Stapleton, senior vice president of investment management at Eagle, the real estate arm of Western Southern Life Insurance Co. “We do not want to let the site sit there vacant for a long time.”

        Mr. Stapleton, who has dedicated 30 to 50 percent of his work weeks to the Nordstrom project for the past four years, said the merchant was the only department store to express interest in the site. Eagle had spoken to non-department-store retailers before Nordstrom committed, and will begin the process of visiting them again.

        But council members said they have been frustrated with Eagle's failure to land Nordstrom.

        Mr. Luken said he wants to use Nordstrom's withdrawal to “default” the contract the city has with Eagle to develop the city-owned site. He said the site is still one of the most attractive retail locations in the city and wants to open it to all developers.
       

Parking lot proposed

        Mr. Shirey — to the approval of most council members — suggested filling in the Fifth and Race site and leveling it off for parking. That plan is reminiscent of the delayed Fountain Place project, which sat as a parking lot for years after being cleared for development.

        Wednesday's announcement also left shoppers disheartened.

        “I'm disappointed,” said Denise Harpring of Anderson Township. “I think it would have been a very good draw for downtown.”

        Nordstrom officials have said for years they wanted to open a store in Cincinnati, one of the top 50 markets in the country.

        Cincinnati officials have been wooing Nordstrom since 1993. In May, the retailer promised a store downtown at Fifth and Race and in Deerfield Township at a proposed mall on Mason-Montgomery Road. Both stores were scheduled to open in 2003.

        The downtown deal hinged on the store developer's ability to reach an agreement with the city on a $48.7 million incentive package, about half of which would come from the city and state.

        Monday, city officials said an additional $360,000 would be needed to build a parking garage that was promised along with the $48.7 million financial package.
       

City will save money

        While Nordstrom's decision will save the city money, a majority of the incentive package would have come from bonds, state loans and a private pool of money from businesses. The city has spent $10 million buying property and clearing the site.

        Mr. Shirey said the city will save “a couple of million dollars.”

        Nordstrom said Wednesday the decision to put off the deal had nothing to do with the incentive package offered by Cincinnati.

        Instead, Ms. Weigand said, the support by the community has been encouraging.

        Dan Theno, Deerfield Township's administrator of development and community relation, was surprised by downtown's bad news, but said it puts Deerfield at an advantage.

        “It would strengthen our position considerably” before the Warren County Regional Planning Commission, he said. The board voted last Thursday against rezoning the Deerfield site, although the board's vote was only a recommendation.

        “That would put more emphasis on the development of the Nordstrom-anchored mall in Deerfield,” he said.

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