The deal to build a record-setting wooden Portland tower that was expected to  be the tallest in North America is off.

Framework, which was designed to be 12 stories including a roof deck, was to be constructed from cross-laminated timber, an innovative lumber product made by gluing sheets of wood together.

Two sources, one at City Hall, tell WW the cost of building the project proved too high.

Framework's developer, a Portland developer called project^, had received commitments from the city and the county housing authority for affordable housing subsidies—despite a whopping price tag.

The building, which was slated to include 60 affordable apartments, was projected to cost $651.43 per square foot, WW reported in December. (The 660-square foot two bedroom apartments were projected to cost $567,389 to build.)

Despite a pledge from Mayor Ted Wheeler to bring down the cost of affordable housing in Portland, the Portland Housing Bureau had nonetheless awarded the building $6 million toward the $29 million total.

The Housing Bureau justified the decision to spend urban renewal dollars on the project in part by saying the project was ready to go, including funding. But it wasn't. The project faced a $2 million funding gap, which had not been filled.

The high-tech cross-laminated timber project has received widespread interest and support from Oregon politicians looking to resuscitate the state's rural timber industry. The state's U.S. senators, Ron Wyden and Jeff Merkley, last week helped secure a half a million dollar grant to Oregon State University to study the durability of cross-laminated timber.

But the the construction material has endured several setbacks.

On March 14, the construction of a cross-laminated timber building at OSU was temporarily halted after materials failed. The contractor ultimately identified a failure in the manufacturing process at the only Oregon manufacturer of CLT.

Update, 8 pm:

A statement tonight from the developer blamed "market challenges" for the decision not to move forward with the project. But it did not address the fact that the project had a funding gap since last year.

"Although beset with market challenges beyond our control, we are very proud of Framework's achievements and the new standards we've established for the use of CLT in the U.S.," said Anyeley Hallova, a developer with project^, in a statement.

The firm had succeeded in getting approval from the city of Portland and the state to build 12 stories with CLT.