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ATTLEBORO - A landmark downtown factory that was to have been the city's first occupant of the new industrial business park has abruptly pulled out, dealing a major blow to the plans of the Attleboro Redevelopment Authority.

John Holden III, owner of Automatic Machine Products, said Tuesday the high cost of building in the park, along with anticipated heating costs and delays in approval from the state and federal government have forced him to look to Taunton for a new home for his company.

He said the "odds-on" likelihood is that the company will move this year into a vacant building in the Myles Standish Industrial Park.

"We're still looking, but if I had to guess right now, that would be my odds-on favorite at the moment," said Holden, who added that the move is a disappointment.

"We've been in Attleboro since 1923," he said. "It's certainly not our first choice," he said of the move.

In the meantime, the cash-strapped ARA will be forced to scramble to find more income. The agency is counting on land sales at the park being built off County Street to help fund its operation.

ARA Executive Director Michael Milanoski said Automatic's withdrawal from the deal will cost the ARA's budget $150,000.

As a result, Milanoski said he will be forced to submit a temporary two-month budget to the ARA board while he seeks other funding.

The lack of funding will affect work on the industrial business park, but not the downtown revitalization project, because that project has separate funding sources, Milanoski said.

"It's going to have a significant impact on finances," Milanoski said.

The ARA is already struggling to overcome the city's rejection of its request for funding from the federal Community Development Block Grant.

Earlier this year, the city turned down an ARA request for $175,000.

Mayor Kevin Dumas has pledged to come up with $75,000 to $125,000 to help out, but that deal has not been finalized.

Holden said the main problem with moving to the park is the cost to blast ledge and level a hill. That work added $700,000 to building expenses, which made it impossible to construct a new facility in the park, he said. Meanwhile delays, which he said were caused by the state and federal government, would force the company to remain in its Wall Street facility for another winter, which would cost the company another $250,000 because of rising heating fuel costs.

All told, he said the cost to move to the industrial business park shot up almost $1 million - a sum the company couldn't absorb.

Automatic is moving to make way for downtown revitalization.

The ARA already owns the Automatic building on the south side of Wall Street and has a purchase and sale agreement in place for the building on the north side.

The goal has been for Automatic to be in the industrial park by this winter, but because the Federal Transit Administration must approve the deal before it closes, there is no way to make the move before winter, Holden said.

ARA board member Max Volterra said the change in plans stings.

"We definitely need money from land sales," he said. "Certainly that hurts, there's no question about it."

While Automatic's decision is a setback, Volterra said it won't stop the industrial business park.

"It's certainly a disappointment, but we'll certainly keep moving forward with the park," he said.

Milanoski said the news isn't all bad.

While Automatic won't be moving into the park, its change in plans could allow the ARA to demolish the Automatic complex in the coming winter, which would be about a year ahead of schedule.

While the move to Taunton will take a business off the city's tax rolls, it's a move that will still allow the 90 or so local workers at Automatic to keep their jobs, he said.