A West Side redevelopment project that has undergone changes and delays over the last year once again is shifting course, casting more doubt on the future of what is now a hole in the ground at Hilldale Shopping Center.

The owner of the mall, Joseph Freed & Associates, said Friday that a proposed 55,000-square-foot Whole Foods Market wouldn't be built on the western edge of the site, at University Avenue and Segoe Road.

Bob Fink, chief operating officer of the Chicago-based Freed, said the company still wants to start construction next spring on other aspects of the project but he doesn't know if it will need to undergo a complete redesign.

His company is looking for another tenant for what would have housed the grocery store. The project also calls for a 125-room Hotel Indigo, 65,000-square-feet of retail, office space and a 675-stall parking structure.

Fink wouldn't say if a redesign would create further delays in the project, that had been valued at $70 million.

"I don't even want to speculate," Fink said. "I want to explore all of our options and see where this goes. This was a decision caused by the realities of the marketplace."

Kate Klotz, a spokeswoman for Whole Foods, said her company's store at 3313 University Ave., which opened in 1996, would continue to operate for the "foreseeable future." A new location for the store is still on the table but the company will wait for the economy to improve.

"It is our intent to have another location in Madison," Klotz said. "It was a different market (when the project was announced in 2005) and resources were at different prices and you just have to be cognizant of those kind of things when you're building a store."

Since buying Hilldale in 2004, Freed has spent millions of dollars transforming and expanding the shopping center. Projects have included two parking structures, condominiums, the addition of stores outside of the mall, restaurants and a theater.

Friday's announcement is the latest in a string of major changes to the site that at one time housed the Hilldale Theatre and office buildings for Humana Insurance.

Mario Mendoza, assistant to Mayor Dave Cieslewicz, said he and the city's planning department spoke Friday afternoon with Freed officials, who said an updated development plan would be submitted to the city by spring.

"We're encouraged to hear that they're planning to move forward next year and we take them at their word on that," Mendoza said.

Freed began clearing the property last fall. On the day demolition began, Freed said that the hotel, planned for the west side of the shopping center, would replace a 90-unit condominium tower near the Whole Foods store.

Then in December, Freed said a second, 112-unit condominium tower also was being scrapped from the project, eliminating residential development from Phase 2.

Construction originally was scheduled to begin in March. When that didn't happen, Freed officials said a harsh winter and changes to the design would delay the project until July. In July, officials with Freed said the project would begin in August.

Then, early last month, Freed said that it wouldn't begin construction until spring 2009.

Ald. Tim Gruber, who represents the area, said he was informed late Thursday by a call from a Freed official that Whole Foods would not build at Hilldale.

"I'm disappointed but not too surprised given the economy," Gruber said. "I guess it shows we're not immune to what's going on nationally."

Fink said he will work with the city to make sure the site is safe, but Gruber said if it remains vacant past next spring he would be more concerned about the appearance.

"It doesn't look good and it's not a very good use of the land," Gruber said. "It doesn't add anything to the city. It subtracts because of the way it looks."

Mendoza said Freed will install screening on the fence surrounding the project to make it appear "more neutral." Crews also will level mounds of rubble that are higher than the fence and monitor the site for any safety, dust and erosion problems. If the city doesn't have plans from Freed by spring, officials would want the hole filled and the site graded, Mendoza said.

As for possible replacements for the Whole Foods space, Gruber said a home-furnishings store would be one possibility. Fink said that despite Whole Foods pulling back its plans and the economy, another retailer still could be found.

"There are still retailers and other users that continue to move forward," Fink said. "Good projects still get good tenants."

Tim Metcalfe has renovated and expanded his 65,000-square-foot Sentry food store at Hilldale since Freed bought the shopping center and is looking forward to the completion of Phase 2. He would like to see some type of retail replace the Whole Foods store and said it has been disappointing that the project continues to undergo changes and delays.

"It's a gravel pit," Metcalfe said of the site. "I think Freed is a good developer. Without them, Hilldale was going in the wrong direction. They have put Hilldale back on the map. I think they've just run into a bump in the road."