A deal designed to get the troubled SunCrest residential development above Draper back on track appears to have fallen apart.

The Draper City Council was to vote Tuesday on an agreement with developer R&B SunCrest LLC. The city and developer have been negotiating for at least two months for R&B to take over the project.

But when council members showed up, they were handed a letter from manager Ron Raddon saying the company was no longer interested, and asking that the agreement discussion be dropped from the council agenda. It also said R&B had spent more than $200,000 in engineering and legal fees.

"R&B SunCrest LLC and its affiliates have now determined that the ramifications of the city's most recent positions with regard to the development makes the purchase of the property no longer financially feasible," he said.

Councilman Alan Summerhays said Wednesday that city officials were caught unaware by the letter. "No one [knew] anything about it."

City manager Layne Long wrote a letter in response to R&B, but by Wednesday afternoon had not heard back and believes the company has decided to pull out of negotiations.

"We're not sure what's going on with them," he said.

Long said the city refuses to spend any taxpayer money to subsidize SunCrest improvements that are within the development agreement for the 4,000-acre project perched atop Traverse Ridge.

Andrew Hatton-Ward, R&B development director, did not return calls for comment.

Among the company's and city's disagreements outlined in the letters:

» R&B maintains that the city is demanding total reconstruction of Deer Ridge Drive at the developer's expense, as well as possible reconstruction and repair of all roads in SunCrest -- even those previously accepted and maintained by the city.

» The city responded that it is not requiring complete reconstruction of Deer Ridge. However, the developer must repair it up to "appropriate standards." The city will not spend money on roads it doesn't own.

» R&B says that it would be required to install a $2.7 million water tank before any new lots would be approved.

» The city said that the development's water infrastructure has the capacity to serve only existing homes. The new infrastructure could cost $10 million, but the city has identified some potential short-term improvements that would cost less than $1 million and allow for several hundred homes to be built.

Council members want to figure out a way to work with R&B because Raddon has done other projects in Draper and city officials know him, Summerhays said.

"He's the most honest man to do business with the city," he said. "I would like to see him as the developer for SunCrest."

jsanchez@sltrib.com