KB Home has dropped plans for now to build a subdivision upriver from New Orleans, a proposed project that was to be one of the largest housing developments in the hurricane-ravaged Gulf Coast region.
The Los Angeles company said Thursday that it let expire a contract to jointly purchase 3,000 acres of farmland west of New Orleans. Instead, the builder and its partner, Shaw Group Inc. of Baton Rouge, La., said talks were continuing with the owner to acquire a smaller parcel.
"We're really committed to the area, but things didn't work out," KB Home spokeswoman Caroline Shaw said.
With the expiration of the contract, she said, the landowner has the right to sell to others. Calls to representatives of the owner, Joseph Marcello of New Orleans, were not immediately returned.
Plans for the initial phase of the project -- in an area locals call the West Bank -- had been approved by the county planning board. Developers had hoped to build as many as 12,000 homes.
With much fanfare a year ago, KB Home was among the first major builders to enter the New Orleans market. The area had long been ignored by big builders because of its lackluster economy and its unusual geographic features, including its location below sea level.
But the need for new construction became clear after Hurricane Katrina and the flooding that followed destroyed tens of thousands of homes. Since then, other companies have moved in, including Fort Worth-based D.R. Horton Inc.
For its part, KB Home, the fifth-biggest U.S. builder by revenue, has started construction elsewhere in the region, including in the Lower Garden District of New Orleans, on the Mississippi River's north shore near Ponchatoula and in Baton Rouge.
The slumping U.S. housing market has forced many builders to reassess their plans.
This month KB Home said it was withdrawing from another high-profile project: a plan to build high-rise luxury condominiums across from Staples Center in downtown L.A.