It was going to be store No. 4364, until a surprise rollback by the company. But the city’s not rolling over on retail yet.

For almost three years, it was a dream shared by developers, city staff and shoppers: A new retail complex at Exit 80, anchored by a big-name big-box, with smaller stores sprouting in its shadow.

Gone would be the days of driving half-an-hour to buy a spool of thread, a pair of running shorts and the latest best-seller, as many shoppers in Lisbon, Greene and Sabattus do now. After much work and wooing by the city and developers, Wal-Mart last year stepped into the dream with a plan to locate a Supercenter at the site. But two weeks ago the city got a wake-up call.

In its own version of retail rollback, the mega-retailer announced March 28 that it was abandoning its plans. The $36 million project was dead.

Lacking a much-needed anchor store to attract other retailers, the 75-acre parcel’s future is unclear. Some believe the site still has retail potential and are even optimistic that it will become a shopping magnet. But there are challenges.

Among them: flat retail spending at the national level, challenging site work and new state environmental laws that reset the development clock to zero – another hurdle for any newcomer.

“Unfortunately, sometimes the timing just doesn’t work in your favor,” said Jim Bennett, Lewiston’s city administrator, who unveiled the intention for a retail complex in 2005. “At this point, we’re still pushing on with the belief that retail makes sense.”

In abandoning the project, Wal-Mart e development costs compared to its expected rate of return. Which begs the question: If Wal-Mart and its famously deep pockets won’t invest in the site, then who will?

“We are actively working to get it out there,” said Lincoln Jeffers, city economic development chief. He has been working with retail developer Hecht Co. and local developer Dave Gendron for the past two years to get the site going. Gendron owns a portion of the intended Wal-Mart site, as well as an adjacent 40-acre parcel.

At the very least, they’ve had a lot of practice. Since the city slated the area for retail development, Wal-Mart has been wooed. But high turnover within its real estate brokerage arm meant every time the regional rep for Wal-Mart changed, Jeffers and company had to make their pitch again. At least four times.

Their efforts paid off. In January 2007, Wal-Mart officially announced its plans to build the new Supercenter on about 25 acres near the exit.

But that summer, at a stockholders meeting, Wal-Mart executives announced they were scaling back expansions. Sagging sales in 2005 and 2006 led to a new emphasis on renovating stores in the U.S and building new stores overseas. Retail analysts said Wal-Mart had reached its domestic saturation point and was in danger of cannibalizing its own stores.

A surprise announcement

Pending stores went through internal reviews with new performance thresholds. The Lewiston project – which had reached the top 10 sites greenlighted for construction – was reviewed internally again. Last month, despite spending hundreds of thousands of dollars on preliminary work at the site and having all permits in hand, Wal-Mart walked away.

“It was a surprise, that’s for sure,” said Bill Fielding Jr., a local businessman who owns eight acres of the intended Wal-Mart site. “I was under contract with them for three years; we were expecting it to be a go and then they pulled the plug at the last minute.”

Wal-Mart and its engineering firm, Bohler, declined to discuss the specifics of the site. But the characteristics that make it expensive to develop aren’t likely to change. Bordered by the turnpike, wetlands and power lines, the parcel is small for a typical big-box retailer. There’s ledge and complicated easements. Traffic improvements alone are pegged at about $2 million.

Wal-Mart’s estimated cost for the project was between $34 and $36 million; by contrast it cost $10 million to build the Auburn store in 2000.

Nationally, many retailers are hitting the pause button. Last week, General Growth Properties announced it was scrapping plans for a $20 million expansion of the Maine Mall.

Consumer confidence has taken a nosedive since July when it hovered around 118 on its index. It now ranks at about 62; economists start ringing the alarm bells when it goes below 80. When consumer confidence plummets, shoppers become more tightfisted. This January retailers reported disappointing holiday sales and lackluster year-end numbers.

“Retailers are taking a step back and seeing how it plays out over the next six to 12 months,” said Hecht’s Patrick Cleary, which has several other projects in New England. He declined to speculate about the future of the Lewiston site or Hecht’s role in it.

For Wal-Mart, the international shift seems to be paying off. In the quarter ending Jan. 31, it reported net profits of $4.096 billion, up from the $3.94 billion it posted the year before. Net sales grew by 8.3 percent, fueled by an 18.8 percent increase in overseas sales, compared with 5 percent at home.

Philip Serghini, the spokesman for Wal-Mart who announced the pull-out, said the Lewiston market was still attractive to the retailer based on its demographics. Perhaps it would be for other big-box developers as well (there have been discussions with Target). But if another developer is interested in the high visibility and easy access of the Exit 80 site, they likely won’t be able to pick up where Wal-Mart left off.

New requirements, more cost

Wal-Mart paid $56,000 for wetland mitigation of a nearby stream; likewise, it mapped the 34-acre parcel for vernal pools, the springtime incubators for certain woodland critters. Both efforts were undertaken because of new requirements put in place by the state.

The new requirements came after Wal-Mart made its initial commitment to the project, adding time and cost to the permitting process. Any new developer would likely have to repeat the environmental work, even though the mapping showed no vernal pools in need of protection.

“The property may very well have to be remapped if a new person came in there,” said Mike Mullen, of the state’s Department of Environmental Protection, noting Wal-Mart might be willing to sell the results of its survey work, but that would be the retailer’s decision.

“We may potentially have information (about the property) and could direct or advise a new applicant,” said Mullen. “Any new applicant on the property may not have to re-survey but most likely would.”

Mapping can only be performed in April and early May when the pools are visible. Without a developer in the gates now, the work would have to be done in the spring of 2009 at the earliest.

Adding to the regulatory hoops is the Informed Growth Act, a new state law that requires an independent economic impact study for any retail development bigger than 75,000 square feet. The Wal-Mart project would have been exempt, since it was already approved for the site, but any new big-box retailer would have to pay the $40,000 fee for the study and risk having its project spiked by the findings.

Developers say that’s a hefty risk, especially when most big-box retailers invest hundreds of thousands of dollars into a site before ever seeking a building permit. In Wal-Mart’s case, the retailer paid for options on the land, engineering studies, survey work, stormwater and wetland plans, traffic studies and broker and legal fees – what developers call soft costs.

Although Wal-Mart declined to release how much it invested in the project, real estate brokers say it was easily in the hundreds of thousands.

(By way of comparison, developer KGI Properties, which had initially signed on to develop the Gendron parcel, abandoned that project a little more than a year into it to focus on the Scarborough Cabela’s project. KGI spent $250,000 in soft costs before pulling out of Lewiston, and never completed its traffic or environmental studies for permits.)

Encouraging signs

Despite the setback, Jeffers said the city is confident that site will become a retail center at some point. Market forces help make his point. Retailers have higher profit margins and can afford the development costs versus manufacturers, which need relatively cheap space. When the plans were unveiled in 2005, Bennett projected taxes of about $400,000 annually from a retail complex once it was built out.

The city has invested no money in the site to lure retail, aside from staff time. It discontinued some streets, amended a subdivision requirement and rezoned the property to allow for retail use.

And despite the retail slowdown nationally, there are some encouraging signs locally.

The Auburn Mall is nearly 95 percent full, energized by a new owner and the recent additions of Steve & Barry’s, Joker’s and Super Shoes. Site plans for PETCO and Famous Footwear in the shadow of Kohl’s are expected this week, with construction targeted for this summer.

“It’s a tougher landscape to make things happen. It doesn’t mean you can’t make it happen, it’s just more difficult,” said Greg Mitchell, a consultant with Eaton Peabody who was with the city of Lewiston at the time the retail site was announced. “It’s well positioned for the next economic upturn.”

A boost in consumer confidence, continued low interest rates and available land will turn the retail landscape around, say developers. For Fielding, it’s just a matter of time.

“It’s prime property,” he said of his turnpike-view parcel. “We’ll continue working with the city on a similar retail venture.”