The grocery store deal which Issaquah Highlands developer Port Blakely hopes will fill a nagging retail vacancy in the neighborhood may have hit a snag.

At a meeting of the City of Issaquah Major Planning and Growth Committee Monday night, Major Development Project Manager Keith Niven said the grocer, understood to be Safeway, still had some concerns about the project.

In the absence of Port Blakely Senior Adviser in the Highlands, Judd Kirk, Niven gave an update of Port Blakely’s progress in securing retail developments. The news was mixed.

“The grocery that they hoped would be ready to make an announcement by the end of June has not done that,” he said. “They are still interested… they are just not ready to pull the trigger.”

Niven said Port Blakely was currently talking to other grocery operators about opportunities in the Highlands.

News of the grocer’s apprehension about expansion in Issaquah came on the same day that executives of Top Food and Drug store in Redmond Town Center announced it would close after just two years in operation.

Niven went on to say that parking space was continuing to cause headaches for Regal Entertainment Group, which announced last year they would open a 14 screen cinema in the Highlands.

Port Blakely is seeking an affordable way to provide the high number of parking spaces Regal is demanding in the area.

“The theater wants 800 to 1,000 stalls, which is a ton,” Niven said. “But the theater will also drive restaurants, cafes, shopping, a lot of other things.”

While a parking garage is the ideal, given its efficient use of space and reduced environmental impact, at a cost of about $18,000 per spot, compared to $5,000 per spot for surface level parking, it was difficult for the developer to afford in this market.

On Monday night Niven said Port Blakely was now seeking a partner, possibly a retail venture, to share the cost of building the cinema.

There was some good news, however.

Niven said Port Blakely was in negotiations with retail tenants for two currently vacant premises – one near Cafe Ladro on the corner of 10th Avenue Northeast and Northeast Park Drive; the other next to Zeeks Pizza on Northeast Park Drive north of 25th Avenue Northeast.

Niven also said a developer had this week submitted permit applications for a residential apartment development, though this is unlikely to please the Major Planning and Growth Committee, which for many years has voiced its concerns over the imbalance of residential and retail development in the area.