HRI Properties is walking away from the Threefoot project ... at least for now.

The New Orleans based developer — Historic Renovations sent the City of Meridian an e-mail Tuesday alerting them they were terminating their agreement with the city to renovate downtown Meridian's Threefoot building into an upscale hotel.

Meridian Mayor Cheri Barry said she received the e-mail from HRI at 5:30 p.m. Tuesday saying they were "not moving forward with the Threefoot project."

"As stated in the letter, the City and HRI will look down the road for future projects and possibly even resume the Threefoot Project under different circumstances and different finances," Barry said in a prepared statement.

The city is expected to pay up to $1 million to HRI within 30 days of the termination of the redevelopment agreement, said Josh Collen, vice president of development for HRI. Barry said she expects the city to honor that agreement, though it is unclear when, or how much, the city will end up paying. HRI has sent the city more than 400 pages of receipts showing the money they've spent on the project, which totals about $1.25 million.

Tuesday's e-mail cited two reasons for their withdrawal: lack of 100 percent support from Mayor Barry and drainage repairs needed downtown, specifically at the Threefoot, officials said. Barry has said the city is not in financial position to move forward with the project. Some city officials did not want to back a $14 million loan — through issuing bonds — for the project. Collen said city officials told him it also could cost about $2 million to make some needed storm drainage improvements for downtown.

"I understand the mayor taking the position that the city has some financial issues right now," Collen said. "We absolutely respect that ... we don't have all the information she has, but we respect that."

City Council President Bobby Smith said he was "beside myself that this is happening." He said the storm drainage had little to do with the termination.

"All the project needed was support from the mayor," Smith said. "We'll have to deal with the drainage issue regardless of HRI. I think she's got someone she wants to build something there. I don't know. I guess we'll find out soon enough what her plans are."

Barry said she's never been against the idea of renovating the Threefoot; her lack of support centered around money and timing, she said.

"Two weeks ago the entire City Council was briefed by the City’s financial consultants and bond attorneys," she said in a statement. "At which time all council members, including Council president Bobby Smith, agreed that the project should not move forward.

"This is a time for the mayor to be fiscally responsible. After consulting with the City’s financial consultants and bond attorneys, it was easy to make the best decision for the citizens of Meridian."

Smith said he was disappointed because recently he had renewed hope for the project. After recent meetings, Smith said there were "plenty" of private investors who committed to help fund the project, though he would not name them.

"Now we're back at square one," he said. "It just blows my mind. It kills you to know we had all this support and had all of this time and money invested in it and all it needed was support to continue to move forward."

Collen, Smith and Barry didn't rule out the future of HRI and the city working together on the project in the future.

"We have other projects we need to focus our attention now, but we still believe in this project," Collen said. "If and when the mayor and her administration decides it's the right time for this project — whether it's three months or three years from now — we're more than willing to make another run at it.

"We really believe in downtown Meridian. There is tons of potential downtown. We think that building is a gem. I'm disappointed that now apparently is not the right time to do it. Again, we understand. That's what leadership is. If you believe it's not the right time, you have to make those tough decisions and we respect that."