Wal-Mart is abandoning plans to build a store on a small piece of land in Fircrest, the company announced Tuesday.

“The combination of traffic mitigation costs and the constraints of the site led to a financial picture that did not pencil out,” the company said in a statement. “We explored many designs, including multi-story buildings, to fit in the footprint but found that the costs outstripped the benefits of those plans.”

Wal-Mart spokeswoman Jennifer Holder elaborated in an interview: The City of University Place, which owns the street access to the site, wanted millions of dollars in improvements that were “outside the scope of our project,” she said.

The retail giant said two years ago that it would open a store in Fircrest, a Tacoma suburb of 6,300 residents. The plan immediately drew criticism from people in Fircrest and UP who didn’t want the big-box store and its extra traffic in their neighborhoods.

Wal-Mart opponents put up yard signs, circulated petitions and launched a Web site (www.fircrestagainstwalmart.org).

Members of the opposition group greeted Tuesday’s news with surprise.

“We’re pleased as punch,” said Karen Kolley of University Place.

The project faced construction challenges from the beginning. At 9.5 acres, the site was less than half the size of most Wal-Mart plots.

Holder said Wal-Mart had a three-level design that might have worked. But University Place, which owns the main street section fronting the property, wanted improvements totaling $3.5 million to $6 million to handle increased traffic, she said.

University Place officials wouldn’t confirm the dollar amounts Tuesday and wouldn’t comment on them, saying they were Wal-Mart’s estimates.

David Swindale, the city’s development services director, said the 400-plus vehicles that a Wal-Mart would have added at peak driving hours would cause traffic jams at the five-street intersection at Regents Boulevard, Mildred Street, 67th Avenue West, 24th Street West and 27th Street West.

“That intersection couldn’t handle a Wal-Mart up the street,” said Steve Sugg, UP’s deputy city manager.

Mayor Gerald Gehring said the City Council was looking after University Place’s best interests.

“We couldn’t say, ‘Don’t build there,’” he said, “but that’s a lot to dump on that street.”

The city also wanted new sidewalks, curbs and gutters on Mildred. Swindale said the city last heard from Wal-Mart six months ago and learned of its withdrawal Tuesday morning from a News Tribune story online.

Fircrest City Manager Bill Brandon said he heard about the Wal-Mart decision Monday from a telephone voice mail left by a company attorney.

The city had asked Wal-Mart via e-mail about two weeks ago whether it wanted to continue its site development application. Wal-Mart submitted the application in July 2005 and had requested that it remain active until now.

Fircrest estimated that it would receive about $400,000 annually in tax revenue from the 127,647-square-foot store. Wal-Mart estimated the store would create up to 200 jobs.

“I think revenue-wise, the city will take a big hit,” said Fircrest Councilwoman Kathy McVay. “We’ll miss it.”

Janne Hutchins, a 13-year resident of Fircrest, said the factor that united Wal-Mart opponents was the additional traffic and disruptions it would cause in east University Place and Fircrest. She said a Wal-Mart also would have driven small businesses out of Fircrest.

Wal-Mart said in its statement that it continues to look for sites in the Fircrest area but has none in mind.

The company in January opened three South Sound stores, including one in Lakewood, about three to four miles from the Fircrest location. The others are on South Hill and in Federal Way.

It is rare for the Bentonville, Ark.-based retailer to pull out of a planned store. Locally, it happened in Gig Harbor in 1996.