Long disputed by adjacent neighborhood activists and questioned by others, the City Council's plan to build hundreds of houses in Santa Fe's Northwest Quadrant appears now to be heading for a halt, or at least a delay.

A recent analysis found that the project is not feasible under the area's market conditions, yet some officials still want the city to sign off on a proposed master plan so that the project could go forward if the economy improves.

The city manager announced Wednesday that a hearing scheduled for May 21 before the Planning Commission has been postponed until at least June 18. The delay is so that two City Council committees — Finance and Public Works — can perform further review of the master plan that has been proposed by staff at the council's direction.

If approvals are granted by those bodies, the plan would then move to the full council for a vote. But even if all goes according to plan, the city department head in charge of the project said she does not believe it can or should be built soon.

"The overall housing market has changed sufficiently, which causes us some concern," said Kathy McCormick, director of the Housing and Community Development Division. "I don't think a developer would bid on it now ... so if the City Council does approve the master plan, staff would recommend that we wait for market conditions to improve."

Mayor David Coss said in an interview Wednesday afternoon that he supports the idea of moving the master plan through an approval process now, then stalling its implementation until conditions improve.

"The pro forma might not work now, but we started this project and put in all the time and effort and financial resources, so it makes sense that we get a final work product. ... We need to reach a point that says, 'This is our best effort,' " he said.

The city has already spent about half a million dollars on planning, archaeology and traffic studies, as well as other facets of the project, according to estimates provided by McCormick.

Meanwhile, councilors took an affirmative step to spend more money on the project when they voted 4-2 Wednesday night to carry through a land-swap and purchase agreement with Santa Fe Public Schools on a parcel the district owns within the proposed development area.

Councilor Patti Bushee, who voted against the plan along with Councilor Chris Calvert, said she had concerns about the deal to pay $840,000 to the schools over three years, because if the city's project did not move ahead, the money wouldn't be used for affordable housing.

"I don't agree with this plan. I don't see the purpose of it at this point," she said, adding later, "I honestly don't understand the urgency to this purchase. I think it is foolhardy and fiscally irresponsible."

Project supporter Councilor Carmichael Dominguez said he felt like some councilors were using the school contract as a way to thwart the development project.

"I can appreciate and respect that some people are not in support of this project for their own reasons, but it's offensive to me as a former public education board member how (the schools) have been dragged into the middle of this," he said.

A project estimate in 2007 said the whole development, including architecture, infrastructure, construction and other costs would amount to more than $265 million. The original vision was that a private developer or nonprofit would make the investment, participate in the city's affordable housing project and help create revenue by selling some homes at market rates.

But given the changes in the cost of materials, the lending market and real-estate sales, among other factors, the city is revisiting those estimates. Financial consultant Michael Halsey has already determined that the pro forma plan as it exists today is not feasible, said McCormick.

Halsey's preliminary report is not public and has not been produced for councilors. Instead, McCormick expects to give a full presentation to the Finance Committee, she said in an interview.

Other councilors stressed that Wednesday's decision was not aimed at a final yes or no on the whole development project.

"There will be plenty of time to debate the merits of the project as we move forward," said Councilor Rosemary Romero.

County Commissioner Virginia Vigil attended Wednesday's meeting to propose the city and county work together on a potential joint affordable housing project. Although the city has a head start with its planning on the Northwest Quadrant, the county is undertaking a planning effort for a housing project on land it owns in the southeast sector of the city. The future of the College of Santa Fe campus also is unknown, she noted.

"We have finite resources, our budgets are limited and we are all looking for ways to do it," she said. "We need to collaborate."

Vigil also noted that she has concerns about some of the city's plans for the quadrant project. Her commission district includes that area, and several residents are worried about traffic and other issues, she said.

The city's proposed master plan calls for up to 773 houses on the roughly 540-acre parcel that lies northwest of the Casa Solana neighborhood in what the plan calls "a fairly hilly and steep site."

Among other elements, the master plan proposal comes with a request to connect the development uphill to the city's sewer system via a system of pumps, and to exempt the project from any changes to the city's Escarpment Overlay District rules that are currently under review.

It also aims for vehicular access to the project to come from Ridgetop Road's interchange with N.M. 599 instead of moving cars through the adjacent existing Casa Solana neighborhood, although a traffic plan is still pending approval by the Public Works Committee.

The decision to spend money on the school parcel displeased several project opponents who attended Wednesday's meeting, including Frank Herdman, an attorney who lives in Casa Solana and who said the city is not following promises to have an "inclusive public participation process," as it wrote in an earlier resolution.

"I have concerns that aspects of this project, including the decision to expend $840,000 by the city ... prior to the master plan ever having been reviewed and without public participation, is contrary to the letter and the spirit of the resolution they purport to be operating under," he said.

Activist Marilyn Bane said she would continue to lobby for the city to put the whole project on the back burner.

"I am concerned that at this point we do not have satisfactory solutions to either the financial feasibility or the traffic," she said after the meeting. "So much is in the air and it's a moving target."

More information about the proposed master plan is posted on the city's Web site at www.santafenm.gov.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.