ESCONDIDO - Four months after submitting plans for a 140,000-square-foot store off East Valley Parkway, Target Corp. has abruptly withdrawn its application for the project, city officials said.

This is the second time in five years that a national discount retailer has left the East Valley business corridor at the altar. Wal-Mart agreed in 2003 to build a store on the same 10-acre site that Target was eyeing, but that deal fell through three years later.

Business leaders said Tuesday that Target's decision was a significant letdown, explaining that merchants in eastern Escondido had spent many years seeking a national big-box retailer because of the traffic and shoppers it would bring to the area.

"More traffic on the east side of town would have been good for all of us," said John Hudson, co-chairman of the 80-member East Valley business association.

The new store would have been the second Target in Escondido. A 110,000-square-foot Target is located just west of Interstate 15 on Auto Park Way.

A Target spokeswoman said Tuesday that she would need "a day or two" to provide a reason for the company's change in plans.

Jon Brindle, the city's planning chief, said Target's plans were headed to the design review stage of approval until the city got a letter from the owner of the property last week saying that the deal had fallen through.

Jo Ann Case, the city's economic development manager, speculated that the spiraling economy was to blame for Target's decision, not the appeal of the site or the neighborhood.

"In this economy, a lot of big-box retailers are rethinking expansion plans," said Case.

But Target has continued to move forward this winter on plans for a second store in Vista. Last October, the chain held grand openings for 61 stores nationwide, including eight in California, bringing its total to 1,591. Headquartered in Minnesota, Target is a publicly traded corporation and the second-largest discount chain in the nation.

Mike La Caze, whose family owns the property, said Target officials supplied only vague reasons in a letter earlier this month announcing the withdrawal.

"I think it has a lot to do with the overall economy," said Mike La Caze, explaining that Target's decision will probably push his family to pursue smaller stores for the site. "I don't think we're too keen on spinning our wheels any more. We've spent a lot of time and energy on this over the last five years."

La Caze said the latest plan is to attract a clothing or general merchandise retailer. Unlike Target's plan to demolish the existing 65,000 square feet of buildings on the site to make way for a much larger structure, the new approach envisions a retailer occupying all or part of the existing buildings, he said.

The buildings were left behind by the Escondido Union School District, which left the site in November for a new administrative complex north of the city's auto park.

La Caze declined to name the retailers he has shown the site. He said no one has submitted a formal proposal since Target did so last fall.

Despite Target's withdrawal, La Caze said he still plans to extend Harding Street, which now runs through part of the Escondido Village Shopping Center, so that it fully connects East Grand Avenue with East Valley Parkway.

"Irrespective of the user, that roadway has got to be completed," he said.

While Councilman Sam Abed agreed that Target's decision was disappointing, he said the East Valley area is still on the rise.

"It is a setback because the store would have generated 40,000 to 50,000 customers per month," said Abed. "But there is still strong economic growth in the area."

A Home Depot and Albertsons opened nearby the site in 2002, and Mi Pueblo Supermercado moved to that part of town in 2004. Fresh & Easy, an upscale British grocery chain, opened two weeks ago on Ash Street. And Vallarta Supermarket is slated to open in April.

Abed predicted a big-box retailer will eventually come to eastern Escondido because most other cities in the region have run out of sites large enough to fit such stores.

- Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.