ALBANY - The city of Albany expects to receive millions of dollars as a result of the decision by PepsiCo not to build a planned Gatorade plant.

The company announced last week that because of market conditions the plant was not needed and would not be built.

By giving the notice, the company avoided having to pay the city $700,000 each in 2009 and again in 2010, which would have been due had the construction merely been postponed.

SVC, a subsidiary of PepsiCo, had a contract with Albany, Linn County and the state of Oregon to build the $165 million factory on 244 acres of industrially zoned farm land it had bought for the purpose south of Ellingson Road.

City officials said earlier that in the event the company reneged on the contract, it would owe the city tens of millions of dollars because the benefits of the project, including more than 200 jobs, would be lost.

On Monday, the City Council took the first step toward canceling a $15 million bridge and road project to serve the Gatorade site and terminating a planned urban renewal district to finance the project. It did so by accepting a settlement with two parties, land owner Larry Epping and Workers for a Livable Oregon, that had appealed the urban renewal district.

The council also went into executive session, closed to the public, to discuss the demise of the Gatorade project.

Tuesday, City Attorney Jim Delapoer said: "The city is in the process of carefully analyzing all of the damages that the community will suffer because of the decision not to proceed with the plant as Pepsi had promised."

He did not mention an amount but assured Albany residents that when it's over, they will be satisfied that the city had aggressively pursued the issue to a satisfactory result.

Last week, City Manager Wes Hare was quoted that SVC would reimburse the city at least $2 million, but he referred only to the out-of-pocket costs of water and sewer lines to the plant site.

The development contract calls for far greater but unspecified payments if the company fails to follow through.

Delapoer could not estimate when the financial issue would be resolved.