New London - Formal talks have broken down between the developers who proposed building housing in Fort Trumbull and the Renaissance City Development Association.

Months-long mediation between RCDA and father-and-son developers Irwin and Robert Stillman of River Bank Construction did not result in an agreement, RCDA President Linda Mariani said Thursday.

But the RCDA has not given up on development of the first phase of the proposed 103-unit, Village on the Green.

"Mediation produced no agreement. ...But we've been talking with the Stillmans to see if there's any chance this beautiful project can happen," Mariani said.

But, she added, at the December RCDA meeting, the board will consider cutting ties with the Stillmans if there is no new agreement in place.

"I'm always optimistic, but it's really hard because it has taken so long to get an agreement," she said. "By the first of the year, we'll know."

The Stillmans have been working on the project since 2009, when they were granted prime developer status for about 7 acres in Fort Trumbull. Last spring, the Stillmans were preparing to sign the final papers and break ground on the first 34 units, but the RCDA refused to turn the land over after a dispute about how the $18 million to $20 million project was going to be financed. The Stillmans were prepared to self-finance the project, but the RCDA wanted assurances in the contract.

The two sides were in mediation until recently. The RCDA maintains the Stillmans are in default of the contract. The Stillmans believe the RCDA breached the agreement.

Reached by email Thursday, Robert Stillman declined to comment.

Mariani said the Stillmans are planning to apply for financing through Competitive Housing Assistance for Multifamily Properties, a state program through the Department of Economic and Community Development that offers low-interest loans and grants that address affordable housing needs.

CHAMP funds can be used for only rental properties, according to the DECD's website, and cannot be used for condominiums. If the Stillmans were successful in obtaining a CHAMP loan, rents would have to remain in place through the life of the loan.

Mariani said the type of funding the Stillmans are seeking would make the apartments available to those making about $100,000 a year or less. Plans for the project would not change if they are successful with the state.

The process has been like a roller coaster ride, she said. "It really seems like it's going to happen and then it doesn't."

Mayor Daryl Justin Finizio, who would like to see eco-friendly projects developed at Fort Trumbull, said future development there is on hold.

"I feel the city administration has done everything in its power to honor the city's obligation to cooperate with the potential developer so they would have the ability to proceed," Finizio said, pointing out the contract for the project was signed and negotiated before he became mayor in 2011.

"At this point, the city administration has no formal role in deciding whether this project moves forward or not," he said.

The city is not part of the agreement with the Stillmans, and resolving the issues remains with the RCDA, he said. There is also the possibility of more mediation and litigation.

"Within the next month or so, we'll have a much better sense of where this stands ...and we can start to see where we go from here," Finizio said.

Council President Michael Passero said that if the Stillmans return to the negotiating table with state financing, it's possible the project still could go forward.

"I would think it would be in our best interest to listen to a new proposal," he said. "But from what I understand, the project is currently in default. The agreement is done. ...I still think it was a good project. It's a shame it fell apart after the 11th hour."

k.edgecomb@theday.com