Layoffs. About $500,000 in debt. No new store.

That's been the cost to the Willy Street Co-op over the past six months as it got caught in the middle of a financial mess between the developer of a Downtown condominium tower and his banks.

On Wednesday, officials with the 14,000-member food co-op announced that it could be more than a year before a second store is opened, and when it does, it won't be in Phase 2 of Metropolitan Place.

The co-op's board of directors has voted unanimously to terminate its lease for 8,750 square feet on the first level of the 164-unit condominium tower at the corner of Broom and West Mifflin streets.

Co-op officials also announced the deal gone sour has cost it $500,000 and that it will have to lay off up to 15 people who had been hired for the new store, which was originally scheduled to open earlier this month.

"That's the hardest part of all of this," said Anya Firszt, the co-op's general manager, who said the main goal now is to reduce debt. "I want to know when we're going to be profitable again."

The announcement by the co-op comes after banks filed lawsuits against developer Cliff Fisher and his company, Buckingham LLC, seeking foreclosure for more than $26 million in loans. The suit was settled earlier this month but Buckingham has not appeased the co-op, which signed a lease with Buckingham in September that called for Buckingham to provide a $750,000 tenant improvement allowance.

When the co-op tried to make a draw on the allowance in December, the money was not available. That forced the co-op to halt its construction.

"The developer's delays have made this deal untenable," Ren?e Lauber, president of the co-op's board, said in a news release. "Although the developer may have struck a deal with the bank to get its project back on track, the costs of the delay have mounted and the landlord remains out of compliance with our lease. Walking away from this deal now is in the best interests of the co-op and its 14,000 owners."

Milwaukee attorney Michael Polsky, who on March 14 was appointed managing partner of Buckingham as part of a settlement with the banks, could not be reached for comment.

Firszt said the delay "has put substantial stress on the finances of the entire organization." In a letter to members on the organization's Web site, Firszt said it was a difficult decision to abandon Metropolitan Place, but ongoing costs, which she said appear to be "extremely difficult, if not impossible to recoup," make continuing to pursue the site a "financial risk to the health of the co-op."

However, she said the co-op's core operations, a 9,500-square-foot store at 1221 Williamson St., remains strong and that sales and membership are at record levels. She said the co-op will now look at sites previously considered and look at sites that had been offered when the second store project stalled.

"We'll just begin the process again," Firszt said. "We remain focused on opening a second retail location to better serve our members. The need is clearly there."