Under the current Port Blakely plan, about 140 acres are to be left as natural forest. Roughly 200 acres are earmarked for business development and about 100 acres have been reserved for 1,200 homes. Construction was expected to begin in a few years.

But earlier this month, the Issaquah-based company chose not to get the ball rolling with a required transportation corridor study. The study was to have determined whether the primary access should be around the south or north end of Kitsap Lake. The results of that research were expected to determine where ground breaking begins.

This latest setback comes after Port Blakely Communities had been successful in court, seeing legal challenges dismissed. The Suquamish Tribe and Kitsap Citizens for Rural Preservation had attempted to block the development and challenged the annexation of the property, citing environmental concerns.

The dismissal of their lawsuit followed a prior legal defeat in May, when the Central Puget Sound Growth Hearings Board ruled that Bremerton and Kitsap County had acted legally when they incorporated the property into the city's urban growth area. Both parties had said they likely would drop their legal challenges following that ruling.

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