Plans for revitalizing Victorian Square took a major hit Wednesday when developer Trammell Crow and the city of Sparks agreed to rescind an agreement for construction of a mixed residential/retail development.

The project, known as The District at Victorian Square, was to include 171 condominiums and townhomes zoned for mixed-use to allow for small business owners to operate their business on the first level while living on the second level. The decision to rescind the agreement “reflects the current state of the local real estate market and the difficulty of obtaining project financing given the turmoil in the credit markets,” according to a release by the city.

Sparks customer service coordinator Karen Todd said the city is still working on assembling properties and building infrastructure that would allow for such a development in the future. On Monday, the City Council approved the purchase of three Victorian Square properties toward that end. Todd said the city’s vision for the area has not changed and that the hope is that another developer will be found to see that vision through.

“We’re really moving forward so it is easy when we have developer in place and when market conditons are right,” Todd said.

Sparks entered into a development agreement with Trammell Crow for phase one of the project in December 2005. The city and developer were also in negotiations for the development of phase two. Those negotiations ended as a result of this decision.

"It is disappointing to have worked so hard on a project that will not come to fruition," Sparks City Councilman and Redevelopment Agency Chairman Ron Schmitt said in a written statement. "Unfortunately with the current state of the economy and the tough lending market, it has become clear that this project, as designed, was not going to pencil out. We remain committed to moving forward with downtown redevelopment in the weeks and months ahead."