Oliver's Market said Tuesday it will keep its current store in Cotati, scuttling plans to build a new shopping center in town near two proposed, controversial traffic roundabouts.

The company, which has three stores in Sonoma County, recently signed a long-term lease to remain in its 36,000-square-foot supermarket on East Cotati Avenue, said general manager Tom Scott.

Oliver's will withdraw its application with city planners to build a larger store on 6.2 acres along Old Redwood Highway near Gravenstein Highway, Scott said.

The City Council late last year approved plans to place two roundabouts along that section of Old Redwood as part of a $3.5 million redesign of downtown. Critics responded by qualifying Measure U, a Nov. 6 ballot measure that would ban roundabouts throughout the city. Oliver's took no position on the measure.

Oliver's majority owner Steve Maass said the company concluded it didn't have time to build the new center before its current lease in Cotati expired in August 2014. Scott and Maass acknowledged that the issue of roundabouts and the uncertainty surrounding them in Cotati was a factor in their decision to drop their plans.

"We're not anti-roundabout," said Maass. "We were just trying to build a project and it made it impossible."

Staying put has its upside, Mayor Susan Harvey said. Oliver's will keep 178 full- and part-time workers in town.

"I'm very excited that they're staying in Cotati," she said.

Oliver's will help keep the East Cotati shopping center a vibrant place, Harvey said. And eventually the Old Redwood site will be developed "because it's a great site."

Oliver's announced plans in June 2011 to build a 40,000-square-foot grocery store on the Old Redwood site, plus apartments, offices and more retail space. The city considers the land a key part of its redevelopment plans for what it calls Cotati's "Northern Gateway."

But last fall Oliver's officials warned that they wouldn't build on the site if the council decided to keep the roundabouts in its redesign plan.

In July, the company said it was close to signing a new lease. Financial details weren't disclosed, but the new lease is for 10 years with two renewal periods of five years each.

"It ensures that we'll be in Cotati until 2034 probably," Scott said.

The company will consider selling the Old Redwood site, Scott said, but probably not to anyone who would build a supermarket there.

Oliver's is the third supermarket to drop plans for the property.

Lucky Stores proposed a supermarket for the spot in 1996, a plan that died after Oliver's helped sponsor a ballot measure to limit the size of retail outlets in Cotati. Then, in 2000, Albertson's supermarket chain sought to build a store slightly bigger than the one that Oliver's proposed.

(You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@ pressdemocrat.com.)