ROTTERDAM — Weeds have sprouted through the cracked pavement of the desolate and darkened Capitol Plaza parking lot.

The 1950s-era shopping center that once bustled with restaurants and shops remains a dormant and increasingly dilapidated structure that was awaiting demolition by a team of prospecting developers representing Walgreens Pharmacy. But after more than two years of maneuvering between 14 small businesses, building owner Jeff Musiker, the state Department of Transportation and HDB Ventures, the deal to build a new drug store at the busy commercial intersection has apparently fallen through.

“The bottom line is we are not going to open a store in Rotterdam,” said Carol Hively, a spokeswoman for Walgreens, offering no further explanation for the company’s decision.

News of the abrupt withdrawal came as a surprise to all of the parties involved in the deal. Bob Blank, a principle with HDB Ventures and a developer for the chain drug store, said he was negotiating a deal on the property up until learning about their decision this week.

“Right now, this one on their books is a done,” he said today. “I’m not going to buy it without Walgreens.”

Blank suggested the recent downsizing of Walgreens’ expansion plans may have led to the demise of the Rotterdam project. After opening more than 1,100 stores over the past three years, the nation’s largest pharmacy chain announced in July they would reduce store growth in 2010 and 2011 to save $500 million.

Muskier was also caught off guard by the apparent failure of the sale, after insisting the deal would go through for the past three months. Instead, the debacle left him with a rotting building, no tenants and a property that continues to accumulate bills.

“It’s very frustrating,” he said Thursday. “I basically have an empty plaza and all the expenses I had before.”