With the economy continuing to tank, the other developer in the Colt derby unexpectedly dropped out of the competition to win a key piece of downtown property last week.

Mid-America Development Partners announced at a public hearing Thursday night that it was “gracefully withdrawing” from the competition, which has been going on since late last year.

“In this current economic environment, we really don’t see us moving forward,” said John Melaniphy III, vice president of Mid-America.

His company’s proposal included a 120-room hotel, almost 50,000 square feet of retail space and 182 luxury apartments. The development would have been in a large village-owned piece of land, which stretches from Lake Street to North Boulevard, just east of Harlem Avenue.

Melaniphy said the finances of a hotel would not work in Oak Park and that the retail climate across the country is struggling. He mentioned the possibly of having a hotel at Lake Street and Forest Avenue as another complicating factor.

He pointed both to Starbucks’ recent announcement of 600 stores closing nationwide-including one in River Forest-and to Walgreens announcing cutbacks.

“We don’t want to continue the process,” he said. “We have to pick our projects wisely. The retail market has diminished.”

Mid-America also mentioned adding a “destination retailer” to the site, such as a bowling alley. But the possibility of that happening has also evaporated, said Brian Byrne, another member of the team.

With the way the retail climate has shifted over the past few months, Melaniphy said past financial estimates that were presented to the village were “invalid.”

“We cannot stand behind those numbers that were submitted to you,” he said. “This is already a different environment. We’re not going to stand here and say the world is rosy.”

The project represented an “inordinate amount of risk” to Mid-America. Melaniphy said even two years down the line the project still appeared troubled. The company has more than 30 projects in development and it needs to prioritize, he said.

Thursday night’s hearing was scheduled to allow the public a chance to comment on revisions to the two competing teams’ proposals. Those revisions were submitted to the village last month.

-Marty Stempniak

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