PETALUMA -- Lowe's Home Improvement has opted not to build a store that was set to anchor a planned 346,000-square-foot mixed-use project on along the east side of Highway 101 in Petaluma because of project delays, the developer announced today.

Greg Geertsen, a managing partner of Merlone Geier Partners, the firm developing the proposed 36.5-acre Deer Creek Village shopping center, said the North Carolina-based retailer notified the firm in writing it was walking away from the project.

"The stated reason was that the project had not acquired entitlements as of Oct. 15, 2011, more than two years after the development application was deemed complete by the city of Petaluma," Mr. Geertsen said.

Merlone Geier remains committed to building the 36.5-acre project located between North McDowell Boulevard and the highway south of Rainier Avenue, he added.

The project is estimated to create more than 800 jobs, help fund construction of a Rainier highway crossing and result in hundreds of thousands of dollars annually in sales tax revenue for the city. A poll commissioned by Merlone Geier showed 63 percent support from local residents for the Lowe's store.

Lowe's plan to walk away from the Deer Creek project is not unique for the company. On Monday, Lowe's announced it would close 20 underperforming stores in 15 states and cut its planned store openings from next year onward in half to two-thirds, from 30 a year to between 10 and 15.