DENVER • Construction of a new Department of Corrections headquarters in Colorado Springs fell victim to the economic recession on Thursday when Gov. Bill Ritter cancelled the project.

The governor’s spokesman, Evan Dreyer, said the new building, to be built near the existing 65,000-square-foot DOC headquarters on South Circle Drive, had been “indefinitely halted.” He said that if necessary the department “would seek an extension to the current lease,” which expires in 2010.

The DOC was to have been a principal tenant of the proposed Vineyard Commerce Park, an office complex being developed on Janitell Road by Mortenson Development Inc. of Minneapolis. The state’s lease-purchase deal on a new 100,000-square-foot building would have been worth $90 million over its 30-year term.

Mark Alexander, a spokesman for Mortenson, did not respond to a voice message seeking comment on the effect of the cancellation on the future of the Vineyard Commerce Park and the construction jobs it would have created.

Under the now-cancelled rent-to-own deal, the state would have paid $2.4 million for the first year, rising to $3.4 million by the end of the agreement. The DOC’s current lease is $1.4 million a year.

Dreyer emphasized that the problem was the state’s budget shortfall, estimated to be at least $631 million in the current fiscal year, and that the cancellation was not related to complaints that the decision on where to build the headquarters was flawed.

The DOC solicited bids on the project last year, and proposals from Colorado Springs, Pueblo and Cañon City were among the finalists. When Colorado Springs won the bid, Pueblo and Cañon City charged that their bids would have saved taxpayer dollars and that the DOC chose Colorado Springs because its 240 headquarters employees didn’t want the inconvenience of moving to another city.

The DOC has repeatedly defended its decision. A DOC spokeswoman, Catherine Sanguinetti, did not respond to a voice message seeking reaction to the cancellation.

Sen. John Morse and Rep. Dennis Apuan, Colorado Springs Democrats whose districts include the current headquarters and the proposed one, said the DOC decision was one of many tough choices the state would have to make as it pares its budget in the face of a recession that has hammered state revenues.

“This is the classic conundrum for Ritter and the rest of us,” Morse said. “On the one hand it would be great to put a commitment that would result in money going into this deal so that the deal goes forward and we create these construction jobs. But at the same time, is it prudent for the chief executive officer of the state to commit the state to payments two years from now that are a million dollars bigger than they are today?”

“I really regret that we have to halt this project that would create jobs,” Apuan said. “But I think there will just be tough choices that will need to be made.”

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