The paperwork is nearly done and the community and the mayor are strongly behind the project, but a new grocery in East Palo Alto is still not a sure thing, as the developer and land owner are deadlocked on the terms surrounding the sale of the property.

The land owner wants approximately $8 million in cash for a large piece of land at Bay Road and University Avenue, terms East Palo Alto Redevelopment Director Carlos Martinez called "unreasonable.''

"His terms were very inflexible and he has kept those terms inflexible,'' Martinez said. "His terms are that he wants his money in 60 days. As you know, even to buy a house and close in 60 days is tight. And this is not a house.''

A representative for the land owner said Tuesday the firm he represents could sell the property to another buyer if the grocery store developer, Blake Hunt Ventures, cannot accept the terms.

"All I want from Blake Hunt is, if they want to come buy it, then come buy it,'' land owner representative Eric Willis said. "Otherwise, stay out of the way.''

The piece of property at Bay Road and University Avenue is right along the spine of the city and several other developers have expressed interest in building a grocery there. But Willis' terms scare them away, Martinez said.

The city may have to put in taxpayer dollars to help the developer buy the land, Martinez said.

On the site, Blake Hunt Ventures envisions a 50,000-square-foot supermarket run by Stockton-based Rancho San Miguel, 25,000 square feet of retail space and 120 housing units.

East Palo Alto has been without a full-service grocery store for years, forcing residents to shop at small corner markets and stores in Palo Alto and Mountain View.

By buying the property in cash, the developer takes on significant risk, Martinez said. Even with community support solidly behind the project, an environmental review could find a grocery store impossible at the site.

Blake Hunt Ventures has partnered with the Smart Growth Fund to help finance the project. It has investment proposals currently out with two other financing groups, Martinez said.

"There is a big risk out there with the way he wants his property acquired,'' Martinez said. "If the agency jumps and takes some level of risk that is acceptable . . . and if we divide the risk in pieces, maybe there is a little fraction of risk Mr. Willis wants to take. And maybe among the three of us, Blake Hunt Ventures, the Smart Growth Fund and the city, we can absorb a risk that is acceptable to all of us.''

The property is owned by Washingtonia, a non-profit group formed in 1994 for the specific purpose of building a grocery store on the property at Bay Road and University Avenue in East Palo Alto, Willis said. Washingtonia spent two years and several hundred thousand dollars developing the idea and courting large grocery chains, which were all scared away by the city's high crime rate in the late 1990s.

Washingtonia again returned to the city in 2001 and proposed building a new four-story City Hall at the site. But that project "died of natural causes'' after the community said it didn't want four-story offices at the site, Willis said.