ALBANY — A developer who planned to build a grand-scale shopping mall on the waterfront here has dropped the project following a City Council vote Monday to place a shoreline protection initiative on the November ballot,

Caruso Affiliated withdrew plans to build a

$200 million retail "lifestyle center" on a 45-acre patch next to the Golden Gate Fields racetrack, company spokesman Matt Middlebrook said Tuesday.

"It's a very expensive proposition to put together an application and we just felt that in order to make that investment and proceed we needed some level of certainty at how the (city) planning process was going to proceed," Middlebrook said.

A ballot initiative would not necessarily stop all future development, but it would halt shoreline zoning changes and mandate a public planning process for the waterfront.

Middlebrook said Caruso, which has eight malls and three more in the works, will keep an office in Albany and may explore other sites for retail centers in the East Bay.

"There are dozens of opportunities to explore," he said. "Unfortunately, at this time it just doesn't appear that Albany will be one of them."

Caruso has been working on plans for more than a year to replace a racetrack parking lot with retail shops, a farmers market, apartments, a restored waterfront, a rebuilt pier, a new park on Fleming Point, a new stretch of the San Francisco Bay Trail and access to the beach.

But the odds that such a project would be welcomed by the community or approved by the city were stacking up against the developer.

A group called Citizens for the Albany Shoreline qualified a shoreline protection initiative for the November ballot after submitting more than

2,400 petition signatures to city and county officials.

The citizens group hit a snag in June when Golden Gate Fields, which owns the land where the mall was to go, sued it. Golden Gate Fields claimed the citizens group did not properly notify the public such a ballot measure was in the works.

A judge will rule today on the suit. If the judge rules in favor of the citizens group, the initiative will go on the ballot. If the judge rules against the group, it can appeal.

Preservationists were pleased Tuesday with Caruso's decision to pull out of the waterfront.

"It just seems so incongruous to have this huge beautiful piece of property and then have a mall right in the middle," said Marge Atkinson, co-chair of Citizens for the Albany Shoreline. "We already have open space and a park down there and we've tried to do a whole ring around the Bay of open space to the waterfront."

The citizens group wants the spot to be used for beach access, open space, bike trails, dog parks and, perhaps, a small office park to supplement Albany businesses. They want any development to be environmentally sensitive and at least 600 feet from the shoreline.

"Now Albany needs to complete the process of planning for what it really wants to see on its waterfront," said Robert Cheasty, a member of the citizens group.