A Texas-based group hopes to build a two-store retail development in Seaside near Avenue O and U.S. Highway 101 to house Grocery Outlet, a national retailer based in Emeryville, California.

But before the deal for the 18,000-square-foot building at 325 Avenue N moves forward, developers could be required to install a left-hand turn lane southbound on the highway to avoid backups and traffic delays — a cost that could render the project unaffordable.

ODOT is planning to making some improvements, and potential owners were assured they have a “funded project” that would extend across the site frontage with a center turn lane.

“It was the magical solution to all of our problems,” project engineer Michael Ard said.

The cost of the street project is about $10 million, he said. But a letter from the state Department of Transportation delivered last week provided a revised estimate of money available.

“Now they say they have $3 million and are scrambling to get $6 (million) to $7 million by the time of construction,” Ard said.

While a center two-lane turn has been proposed near Avenue N by 2020, the Department of Transportation wrote, “the entirety of this project is underfunded.”

Earlier this year, Dan Dover of Main & Main Capital Group LLC went before the City Council seeking the “city’s pulse” for the granting of a street vacation for property along U.S. Highway 101 in Seaside. A street vacation is a type of easement in which a government transfers the right-of-way of a public road to a private property owner.

The city denied the request and Dover was redirected to the Planning Commission.

Main & Main returned this fall with plans for the proposed retail outlet. The development would take access via Avenue N, which provides access to existing retail uses on the north side of the roadway including Coast Hardware and Seaside Laundry. The property would be leased to Grocery Outlet.

Developers were encouraged by a memo from the Department of Transportation, which concluded “the need for a southbound left-turn lane” at Avenue N, part of a highway upgrade scheduled for 2020. When the funding delay was announced, the developer hit a roadblock.

With an estimated 1,300 daily trips, commissioners were wary of adding to already long year-round backups without addition of a southbound left-turn lane.

“There are definitely challenges associated with this project,” Ard said. “My job as an engineer is to try to come up with the best possible solutions — you guys have made that exceedingly difficult for me. I do believe the commission could go through with this project without the turn lane.”

The developer could fund the turn lane, but that cost would likely prove excessive, Dover said. “Potentially it could cost us more to do that than to build our property.”

The commission could approve the building plan as is, without adding a turn lane, but that may mean testing Department of Transportation policies and the city’s transportation master plan.

Chairman Chris Hoth and commissioners David Posalski and Bill Carpenter asked Planning Director Kevin Cupples to offer recommendations for the Dec. 4 meeting.

The project is “good,” Hoth said. “I’d like to see it happen, I’d like to have somebody give me information that would make me feel better about dealing with the traffic issue. If we can deal with that issue, I can make a decision, yay or nay.”