In a decision that sends reverberations all across southern Scott County, Wal-Mart has decided against building a controversial Supercenter in New Prague.

The company said the decision is merely a part of a national throttling back of expansion plans and "should take nothing away from New Prague as a good place to do business."

But Wal-Mart continues to build stores, though at a reduced pace. The decision seemed yet another signal that exurban areas in particular are seeing a chillier economic climate these days as housing construction slows to a near halt.

The city's mayor, Bink Bender, described the decision as a "great disappointment" but stressed that New Prague is a "strong, vibrant community."

Although some residents and business owners had opposed the idea since the possibility of its happening became public in 2007, city officials welcomed the development and worked hard to make it happen.

A city-commissioned economic-impact study conceded that some business people were concerned about the effect of competing with Wal-Mart. But others, it found, were hopeful.

The reason: The study predicted that a Wal-Mart Supercenter would hugely expand the drawing power of the city's commercial districts. The town's trade area would expand from just a couple of nearby towns, Montgomery and Lonsdale, to stretch across the entire width of the county, from Belle Plaine and Jordan on its far western edge to New Market on the east, the study found.

"It's a long drive from here to the closest Wal-Mart, unless you're going to work anyway and stop in Shakopee or Savage," said Pete Ewals, mayor-elect of Jordan. So a New Prague Wal-Mart would have meant something: "Not as close as the OK Corral, but an easier drive than Savage."

Kristy Mach, executive director of the city's chamber of commerce, declined to comment on Thursday, as did attorney Pat Goggins, the chamber president.

Wal-Mart's pullout is "an 'ouch' for the city of New Prague," said City Council Member Jennifer Flicek. "I feel sorry for the developers, who put in so much time and money answering all the requirements we put in. Our seniors need a better place to shop, and our young people need jobs."

Wal-Mart announced earlier this year that it was scaling back its pace of growth. From 218 stores that opened in fiscal year 2008, the company said last month, the number will fall to 191 in FY 2009, and between 142 and 157 the year after that.

New Prague mayor Bender said the city is doing better than its new-home numbers would indicate, given that many of the foreclosed homes in the city are quietly being purchased -- and purchased by people who plan to live in them, not rent them out. It's true that that's partly because prices have sunk so much, he said, but "we could be working our way out of this puppy much quicker than we thought."

The addition of big stores such as Alco in the past few years has given residents better options than a lot of cities its size in the area, Bender said. "We're sort of a little mini-trade area."

Still, Flicek said, many people would have welcomed the arrival of Wal-Mart.

"We have to drive 35 miles to get good discount foods and other goods," she said. "I'm not a shopper of Alco that much; I have not found significant discounts there. When I'm looking for that, I usually drive to the Cities."

David Peterson • 952-882-9023