After more than 10 years of working with the city and the neighborhood to develop a satisfactory replacement for the 30-year-old Greenwood store, Fred Meyer has announced it is scrapping plans for a new $91 million, mixed-use development in favor of a much cheaper remodel of the existing store.

The most recent design for the new Greenwood Fred Meyer development, which was approved by the Northwest Design Review Board in September 2009, included a mostly below-ground, 170,000-square-foot Fred Meyer with a three-story parking garage, additional retail space along Northwest 85th Street and 250 apartment units.

The project was $13 million over budget. Melinda Merrill, public affairs director for Fred Meyer, said they knew the project – the most expensive Fred Meyer development ever – would be over budget going in, but $13 million is too much to cover.

The remodeled Fred Meyer, located at 100 N.W. 85th St., will include groceries and apparel and be more high-end than a typical Fred Meyer, Merrill said. When the neighboring Greenwood Market's lease is up, it will be converted into Fred Meyer's garden center and home department, she said.

The remodel will cost Fred Meyer approximately $15 million.

Greenwood neighborhood activist Kate Martin said Fred Meyer led itself down a road for redevelopment they couldn't afford. She said she doesn't know how the company let itself get this far along the planning stages knowing the current economic situation.

Martin said she wonders if the budget is the only reason the redevelopment project is being scrapped. The Fred Meyer real estate team always had the remodel plan in their back pocket, she said.

At a July 2009 community meeting, Fred Meyer Director of Real Estate Development Tom Gibbons warned neighbors against asking for too much from the project. He said he was surprised that Fred Meyer was already going along with the project given its price tag.

Over the course of half-a-dozen public meetings, Greenwood residents had variously requested no surface parking, no parking garage, a public plaza for events and farmers markets, a two-story store with a smaller footprint or a small grocery store, among other things.

Martin was one of the residents pushing for a two-story Fred Meyer, which she said would fit better in the context of downtown Greenwood.

"It seemed like they were trying to put a square peg in a round hole," she said.

Merrill said the decision to remodel the current store instead of proceed with the new development is entirely about the project's budget and has nothing to do with the economy or Fred Meyer's relationship with the neighborhood.

"We worked really hard to come up with something the neighborhood wanted and we wanted to give them," she said.

The most recent public meeting on the project was March 11, during which an architect, a hydrogeologist and an engineer working with Fred Meyer met with neighbors about how the development would affect the peat bog covering half the site.

The volatility of the bog had been a major concern of neighbors throughout the project, and Fred Meyer had drilled 30 monitoring wells on the site and included features in the design for the new development that would cut down on the storm water that currently runs from the store's roof and parking lot into Puget Sound.

Martin said the peat bog and the groundwater situation can not be ignored by Fred Meyer even with plans changing to a scaled-back remodel.

Merrill said it is unclear when the remodel will take place, but Fred Meyer will look at redeveloping the store again in eight to 10 years.

Martin said she is not disappointed the redevelopment plan was scrapped. She said in eight to 10 years, when the redevelopment is brought up again, maybe the neighborhood can get a solution for the next 50 years that isn't a throwback to big-box stores and car-centric lifestyles.