COEUR d'ALENE - The midtown project is off.

The Housing Company said it pulled its federal tax credit application last week, meaning the proposed mixed-use workforce housing and retail development in midtown that depended on the financial assistance is officially off the table.

"I think it was a difficult decision given how long we've been working trying to make something happen there," said Douglas Peterson, THC director, in a phone interview from his office in Boise. "On the other hand it was kind of an easy decision because you don't want to build where you don't have the community's support."

THC said it received the letter signed by Mayor Sandi Bloem requesting the nonprofit hold off on the proposed four-story project at Fourth Street and Roosevelt Avenue in light of neighbors' concerns that it didn't fit well in the neighborhood.

"Since the mayor and the city and LCDC are an integral part of this whole midtown development, we're going to heed their request and not move forward," Peterson said.

Lake City Development Corp., the city's urban renewal agency, had pledged more than $500,000 in financial support for the project, but said it could be a willing partner should THC seek alternate plans.

A project at the site had been in the planning stage for around five years.

Originally, it was pitched as condos for sale atop a ground floor of retail space. But the market decline killed the condo prospect, and in November THC switched to 45 units of rentals available for qualified people who earn 60 percent of the median income, called workforce housing that THC said the market demands.

Some neighbors didn't like the change from sale to rentals, or that they were designed for qualifying income earners, and felt the neighborhood was left out of the loop as the plans changed. They aired those concerns at a stakeholder meeting in March. A short time later, the City Council agreed to send a letter asking the company to hold off on the project, and neighbors wrote a letter to The Press thanking the council for its support.

The tax-credit application, through the Idaho Housing and Finance Association, would have netted THC around $5 million for the roughly $9 million project if approved.

Instead, THC pulled it from consideration.

"We will be re-engaged with the neighborhood at some point and see how we move forward," Peterson said.

He said he hopes to be in Coeur d'Alene for more stakeholder meetings on the future of the midtown site by June or July.