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As commercial and retail vacancy rates in Wheaton rise, a developer has backed out of its plans to build a large mixed-use project in the central business district, Wheaton officials said last week, adding they will consider seeking a "master developer" for a proposed town center.

Greenbelt-based Bozzuto Development Corp. has withdrawn its intent to build Metro Plaza, a mixed-use project at the corner of Georgia Avenue and Reedie Drive, next to the Wheaton Metro, said Lauren McDonald, the manager of corporate communications at Bozzuto in a statement.

"We determined the office market wasn't strong enough for us to locate a tenant, understandably due to the economy," McDonald said in the statement.

Bozzuto and co-developer Spaulding and Slye decided not to renew their contract with property owner Washington Metro Area Transit Authority after six years as developer of the three-acre site, said a spokesperson with WMATA.

Plans had included 125,000 to 450,000 square feet of Class A office space and street-level retail. Developers had said in the past that construction would not begin until a lead tenant had been leased to the project.

WMATA plans to put the project out to bid with hopes of landing a developer, possibly one that could manage the future redevelopment of the entire "Wheaton Triangle," said Natalie Cantor, the director of the Mid-County Regional Service Center, at a Monday meeting of the Montgomery County Council's Planning, Housing and Economic Development Committee.

According to a WMATA memo, WMATA is in talks with county officials about selecting a developer to lead a planning process for a redevelopment plan for the Wheaton Triangle.

The development model would be similar to Downtown Silver Spring, Cantor said, in which the county enlisted The Peterson Cos., the Foulger-Pratt Co. and Argo Investment Co. to develop the area around Ellsworth Drive, with Peterson also serving as the property manager.

The proposed town center for Wheaton would include a relocated Wheaton Library, a redesigned Mid-County center, the WMATA property and green space. A community meeting to discuss the future of the Wheaton Library and the town center is scheduled for 7:30 p.m. Feb. 9 at the current Wheaton Library, 11701 Georgia Ave.

In a June presentation from the International Downtown Association, a worldwide coalition commissioned by Wheaton's redevelopment office for planning consulting, presenters said work on the town center would ideally begin in the next three years. Given the tight budget in the county, the timeline for all redevelopment is unknown, officials said.

"Obviously, the economy is going to have an impact so we aren't going to have a lot of forward momentum in these revitalization projects until the economy improves," said Councilman Michael J. Knapp (D-Dist. 2) of Germantown at the meeting.

The hope is that when the economy improves, Wheaton will be ready for redevelopment that can jumpstart its central business district.

"The silver lining in a recession is you can be prepared for an upturn in the economy," said Rob Klein, director of the Wheaton Redevelopment Program, at the meeting.

Klein said the large increase in use at the new Rockville Library is an example of how Wheaton could be revitalized by the town center. Councilmembers were skeptical.

"What happened with Rockville is they replaced an old facility with a state-of-the-art facility," said Councilman Marc Elrich (D-At-large) of Takoma Park at the meeting. "I'm concerned about replicating the usage in Wheaton because the [proposed new] site is removed from housing."

Recent residential projects have seen decent results in the face of economic problems, with Centex Homes on Georgia Avenue selling 40 of its 45 condominiums and about half of its 54 town homes since the units were made available last fall. MetroPointe Apartments, which opened at the corner of Reedie and Georgia in November, has leased 82 percent of its 173 units, according to Klein.

Wheaton officials also briefed councilmembers on Westfield Wheaton's recent loss of three tenants, including Office Depot, Circuit City and the Montgomery Cinema ‘N' Drafthouse, which closed after just two months due to a "perfect economic storm," according to its owner.

At 1.6 percent, retail vacancy rates in Wheaton are actually lower than the county's rate of 2.7 percent for the last quarter of 2008, but Klein said he expects that number to rise in the coming months. Both retail and office vacancy rates for Wheaton are up about 6 percent from third quarter 2008.

The average cost of retail space for the fourth quarter of 2008 is up almost 20 percent from the previous quarter and, at $31.63 per square foot, is almost $3 higher than the county rate.

"The restaurants are getting hit the hardest," Cantor said. "It's the cost of food, the cost of fuel and [residents'] lack of disposable income."