A proposed $48 million condo and hotel development, described as a "crowning jewel" of the SouthSide Works complex, has been waylaid by the nation's credit crunch.

The development team, DOC-Economou, has been unable to secure financing for the project, which has been delayed indefinitely and could be scaled back to reduce the cost.

It is the second major Pittsburgh development DOC-Economou has put on hold in recent months. The developer also postponed construction of a seven-story hotel in Bloomfield last month after scores of residents protested against it.

Brenda Yurick, a principal in DOC-Economou, said the delay in starting the SouthSide Works project is related strictly to the difficulty in securing financing.

"It's obviously more challenging in today's world. We're confident that we'll get the financing we need, but it's taking longer than expected," she said.

Although the federal government's $700 billion bailout package was aimed in part at loosening tight credit markets, "we haven't seen evidence of that yet," Ms. Yurick said.

As proposed, the 13-story mixed use development was to contain a 140-room luxury hotel, 23 condominiums, a 20,000-square-foot spa, a two-story ballroom, an 18,000-square-foot events center and 20,000 square feet of street level retail and dining space.

However, with money so tight, DOC-Economou is looking for ways to reduce the cost of the project and may even abandon the upper-floor condos, one of the building's major elements.

"Unfortunately, a lot of investors see the word condo and it scares them," Ms. Yurick said. "We're looking at different options with the lenders. One of them is potentially not building the condos on top of the building."

The developer also is considering ways to redesign the complex "so as not to change the overall effect but to bring down the cost," she said.

In December 2007, the city Urban Redevelopment Authority board authorized the sale of an acre of land to DOC-Economou for the project.

The sale was contingent on the development team obtaining financing.

Kyra Straussman, URA director of real estate, said the agency still is interested in working with DOC-Economou on the development. She said the Soffer Organization, the SouthSide Works developer, considered the hotel-condo development the "marquee project" at the 34-acre site along the Monongahela River.

"I think we will see if there's a way to salvage the project," she said, adding the URA is willing to give the developer more time, at least in the short term.

Ms. Yurick said DOC-Economou still is hoping to be able to secure financing sometime this year to start the development, which originally was to be completed this summer.

"Our hope, of course, is that things will turn around soon. It's hard to have a crystal ball in today's market," she said.

Mabon Lichtenfels, Soffer vice president of development and construction, said the hotel-condo complex is still the "first choice" for the riverfront parcel on 27th Street but that Soffer also would consider a similar project by another developer if one came along.

The delay in the hotel-condo development isn't the only bad news facing SouthSide Works. Ann Taylor Loft plans to close its store in the complex Jan. 24, officials said yesterday. Employees are expected to be reassigned elsewhere.

New York-based Ann Taylor Stores Corp. announced last year that it planned to close 117 stores as part of a restructuring. The Ann Taylor Loft store at SouthSide Works is one of seven in the region.

Two other stores within the South Side complex have closed in recent months.

In Bloomfield, meanwhile, the DOC-Economou hotel project remains on hold while the developer awaits meetings with community groups to try to work out differences, Ms. Yurick said.

DOC-Economou withdrew requests before the zoning board of adjustment relating to the hotel in December when it became evident that the sides could not come to terms.

Ms. Yurick said financing is not an issue with that project.