Blaming the nation's credit and mortgage crisis, the Pittsburgh Cultural Trust is suspending its nearly half-billion-dollar housing plan, which was supposed to be the biggest in Downtown history.

The lead developer on the $460 million, 700-unit RiverParc project, Concord Eastridge of Phoenix and Washington, D.C., questioned the trust's move, saying the project could have been built despite the market woes and that the blame lies instead with poor oversight by trust officials.

"They were great people and I enjoyed them immensely," developer Susan Eastridge said yesterday. "However, the thing is, they don't know how to make something like this happen."

The Cultural Trust announced the project almost two years ago, saying it would provide a world-class link between its theaters along Penn Avenue and the Allegheny River. Already credited with saving Downtown by turning the seedy Penn-Liberty corridor into a vibrant Cultural District, the trust was going to use this project, planned to take 10 years to complete, to make its greatest imprint on the city.

Cultural Trust CEO Kevin McMahon said the ambitious plan -- which included environmentally friendly buildings, theaters, shops and a new link to the river -- is not dead, despite the announcement.

"We still clearly believe in this project. It's a fantastic location. When the credit markets rebound, that will allow us to move forward again. But we have to re-evaluate," he said last night.

The Cultural Trust's board approved revising the project at a meeting Wednesday, saying the group will refocus -- in the short term -- on smaller improvements to the housing site, including infrastructure improvements (perhaps parking) and a new riverside park.

A Washington, D.C., think tank started looking at the property, bounded by Seventh and Ninth streets, Penn Avenue and Fort Duquesne Boulevard, as far back as 2000. It announced an international design competition in 2005 that was won by lead developer Concord Eastridge, using designs by Stuttgart's Behnisch Architekten. The project was officially unveiled in July 2006 and Gov. Ed Rendell issued it a $12.3 million check in early 2007.

Initially, plans were to begin construction on the first phase of 200 housing units in 2007. As the credit and housing finance crisis gathered steam this January, Mr. McMahon said the trust was still moving forward with the project but construction would start in 2009.

This week, with the housing and credit markets still poor, trust leaders decided they could no longer go on with the original plans.

"In effect we never had the final economically feasible plan and the credit markets collapse only corroborated that," he said. "This is certainly not unique to Pittsburgh. You can't open up The New York Times or The Wall Street Journal without seeing this happening to another mega-project around the country. New York, Chicago, Atlanta, Seattle ... They're all having these kind of delays."

In a phone interview yesterday, Ms. Eastridge utterly disagreed, saying the Downtown Pittsburgh market is relatively healthy -- just this week during a Pittsburgh Downtown Partnership housing tour, developers reported brisk sales across the business district. Ms. Eastridge said the project was in the enviable position of being able to complete its planning and be bullish in a weak market hungry for well-financed proposals.

"This is not a project that couldn't happen -- in Miami I might be saying that, but this project absolutely could happen," she said.

According to Ms. Eastridge, the Cultural Trust fumbled aspects crucial to the financing, including the sale of the development parcel and the state subsidies. The trust, a nonprofit, originally agreed to contribute the six acres to the private developer, but ran into tax problems, and instead asked Concord Eastridge to buy it. Appraisals of the parcels came in far lower than what the trust had paid for them, she said, worrying the trust that it would alienate its funders.

Government subsidies were planned to provide much of the overall financing, and the trust took responsibility for meeting with state, county and city leaders on their support, she said. It had the $12.3 million commitment from the state but told her in a meeting May 12 that the commitment had lapsed.

"The trust lost their courage upon that defeat. That's the last thing that should happen," Ms. Eastridge said.

Mr. McMahon acknowledged that land transfers were complicated for the tax-exempt trust and the group held itself to "high, exacting standards" during planning. "No question, there were very important issues dealing with the transfer of land involved," he said.

He said the trust made a commitment to the state that it would use the $12.3 million in a timely matter, so when delays occurred it decided to return the money to allow the state to use it for other projects.

"Obviously there are a lot of very important and good uses of state funding. It's inappropriate for the trust, if it's not moving as rapidly as it likes, to in effect hold up those funds," he said.

It took the Cultural Trust -- the brainchild of H.J. "Jack" Heinz II -- more than two decades to reinvigorate Downtown through the Benedum Center, O'Reilly Theater and other cultural spots, so a pause in a project like this is nothing new, Cultural Trust trustee and design committee chair Thomas Van Kirk said.

"The Cultural District riverfront development will happen. But we should remember that building the Cultural District has taken decades and has required overcoming many challenges and obstacles," he said in a statement.

It remains to be seen if such a huge, expensive, complicated development plan can be pulled off by what is essentially an arts organization.

"I had a growing fear that it was too ambitious for them to undertake. ... It's a really sad day for Pittsburgh to lose such a really nice, really great project," Ms. Eastridge said.