One of the biggest proposed retail ventures in the region may be dead, the apparent result of a stalemate between the developer and the state Department of Transportation.

After more than seven years of planning, Simon Property Group of Indianapolis has notified local, county and state officials that the firm has decided to "withdraw from development activity" and spend no more money on the project that was to have brought a sprawling mix of retail, office and residential development to an 80-acre tract at Route 228 and Interstate 79 in Cranberry.

Letters from Simon Vice President Kathy Shields were dated Jan. 21 and Jan. 22.

About $63 million in state and federal funds and another $2 million from Simon Properties had been committted to highway improvements that were needed around the development. But that was $20 million to $24 million short of what was needed and PennDOT officials said they could not provide any more funding.

Joseph Dubovi III, district executive for PennDOT's District 10, said the agency is not surprised by Simon's decision and is moving forward on plans for incremental improvements to Route 228 instead of the broader plans the agency had demanded if the Simon mall plan would have advanced.

Cranberry Manager Jerry Andree declined to comment, saying he is meeting with state Rep. Daryl Metcalfe and state Sen. Jane Orie tomorrow about the matter. Ms. Orie and Mr. Metcalfe could not be reached for comment. A secretary to Ms. Shields said she was unavailable for comment.

The stalemate between Simon and PennDOT over the 650,000-square-foot development, which had been called The Summit at Cranberry, has been building.

Once a rural, two-lane road between Route 19 in Cranberry and Route 8 in Middlesex, Route 228 has evolved into one of the most traversed east-west highways in the region. Though individual developers have been required by state and local officials to add some turn lanes and widen segments of the road on a piecemeal basis, PennDOT had been contemplating a broader capacity-building project since the 1990s.

In 2002, Simon began working with Cranberry officials on an expansive development.

Progress was slow but, over time, Simon put together a financing package that mixed state economic development money with federal and state highway dollars to fund highway improvements that ranged from flyover ramps to new lanes in both directions of Route 228.

The trouble was the funding shortfall of more than $20 million.

Cranberry officials asked PennDOT for approval of a "Plan B"ï¿ 1/2approach, contending that the plan, though less than ideal, would be sufficient to handle transportation needs for 10 years and would salvage the $65 million that already had been committed.

But Mr. Dubovi said PennDOT was not interested in the scaled-back plan and the agency was not prepared to close the financing gap.

Dale Pinkerton, chairman of the Butler County commissioners, said he's not blaming anyone.

"I think the biggest problem is the economy. Everyone is in a tight spot. But, I think this could still be pulled together if everyone would see this project for what it is: a regional project that benefits not just Butler County, but Beaver County and Allegheny County, too," he said.