DUNELLEN -- After a courtship of more than a year, the Borough Council broke up with developers The Kaplan Companies of Highland Park at its meeting Monday night, citing the company's inability to maintain its offer to pay for the borough's multimillion-dollar downtown redevelopment project.

The council then designated a new developer for the project, Baker Residential of Pleasantville.

The borough named Kaplan in February 2005 based on a proposal to build 400 units of housing on the former site of the Art Color industrial complex, a parking deck at Skinner Plaza and a new municipal complex with commercial space on North Avenue. A contract was not signed, Mayor Robert Seader said.

The parting of ways resulted from a falling residential housing market, which has made original financial estimates for the cost of the project invalid, both parties said.

"We were just taking the more conservative position, and we weren't able to offer what we'd originally thought," company president Jason Kaplan said. "I think this was mutual, between both of us. We wish Dunellen the best of luck and hope they find what they're hoping for."

Neither Kaplan nor Seader would offer a dollar figure to quantify the cost of the project, or the change in the offer, except to say that 90 percent of Kaplan's financial commitment disappeared. All that was left was "a small cash donation," and the borough is committed to paying for the project without tax dollars, Seader said.

Baker was recommended to the council by the borough's Redevelopment Advisory Committee, and the company already has submitted a proposal that includes a mixture of upscale residential units with new retail space, as well as a new municipal complex.

The project still is in the planning stages, but previous estimates have placed the total cost at $100 million, Seader said.

Now, the borough wants a signed contract within 90 days, he said.

Municipal Clerk William Robins estimated that once that happens, it will take at least another 18 months to break ground on the first phase of the project, which will focus on three sites -- North Avenue between Washington and Prospect avenues; a 2.66-acre site at Skinner Plaza on the other side of the railroad tracks; and the former location of the Art Color complex, a 19-acre parcel on the south side of the tracks at Washington Avenue.