TIETON, Wash. — A major economic development plan for Tieton has stalled after the city and Tieton Cider Works couldn’t agree on terms for a building remodel central to the deal.

The plan is centered around the building known as Jim’s Garage at the corner of Summitview and South Tieton roads. The city had agreed to purchase the 32,669-square-foot building and lease about two-thirds of that space to Tieton Cider Works. The city planned to fill the remaining space with another commercial tenant and the Tieton Police Department, and then lease the current police station at the corner of Naches Avenue and Mapleway Road to a medical clinic, Tieton Mayor Stan Hall said.

The deal promised more than a dozen new jobs and new revenue for the city while allowing the cidery to expand and take advantage of the country’s rapidly growing taste for hard cider, Tieton Cider Works owner Craig Campbell said in September.

He and his wife, Sharon, could not be reached for comment Tuesday.

To help the deal happen, Yakima County’s Supporting Investments in Economic Diversification Board agreed to give Tieton $650,000 — half as a grant and half as a 10-year-loan — to buy the building.

The city of Tieton had agreed to buy the building and land by Thursday so long as it worked out a lease agreement with the cidery. But the lease negotiations got more complicated last week when bids for remodeling the building came back much higher than expected.

The bids were higher in part due to specialized work for the cidery, and the city balked at simply covering the higher costs, Hall said. “We wouldn’t pay for specialized flooring, epoxied walls, epoxied ceilings or cold storage.”

The city wants Tieton Cider Works to chip in more money up front or pay more in rent, he said.

But the two sides won’t meet Thursday’s deadline, Hall said. Tieton City Council has to approve the lease agreement before Hall can sign it.

The two sides are still trying to work out a deal, Hall said. “We have the money. We’re going to keep working on it.”

Dan Catchpole can be reached at 509-759-7850 or dcatchpole@yakimaherald.com. Follow him on Twitter at twitter.com/dcatchpole.