By SHAWN G. KENNEDY

A nine-year effort to redevelop the New York Coliseum crumbled last night when the developer, Mortimer B. Zuckerman, failed to meet a deadline to sign a contract with the Metropolitan Transportation Authority, which owns the Columbus Circle site.

The chairman of the M.T.A., Peter E. Stangl, said that with Mr. Zuckerman out of the deal, the authority was now free to begin exploring options for the redevelopment of the site. This, he said, will most likely include some sort of interim use involving a modest upgrading of the exhibition hall and office building, rather than immediately seeking a new development project.

Although the deal between Mr. Zuckerman and the transportation agency survived numerous challenges and court battles, Mr. Stangl said last night that he could see no way it could be revived now. And the Giuliani administration, which had pressured the agency to complete a deal with Mr. Zuckerman, indicated last night that it was ready to give up the fight.

"We would have preferred the project to go forward on schedule," said Cristyne F. Lategano, the Mayor's spokeswoman. But she added that the city had already collected Mr. Zuckerman's $17 million nonrefundable deposit and that moving ahead with new plans would be "far better than years of litigation and consequential delay."

But Mr. Zuckerman's partner, Edward H. Linde, said that he and Mr. Zuckerman were seriously considering bringing a suit against the M.T.A. "We did not pay $17 million without thinking that we would develop the property," Mr. Linde said. "They have taken our money and they have deprived us of our right to develop."

From the beginning, the deal for the Coliseum -- one of the highest-profile development sites available in Manhattan -- has been buffeted by court battles, mayoral politics and the vagaries of the real-estate market. But last month it appeared that a project would finally go forward at the Coliseum, at Columbus Circle and 59th Street, when Mr. Zuckerman agreed to build a one-million-square foot office building on half the site, for which the M.T.A. would have received $100 million.

Besides the $17 million down payment, Mr. Zuckerman, by failing to sign the contract by last night's deadline, stood to lose millions more that he had already spent to sustain his interest in the project, which he won the right to develop in 1985.

The negotiations fell apart despite an 11th-hour effort by John S. Dyson, Deputy Mayor for finance and economic development, who employed a sort of shuttle diplomacy between the two sides as they struggled to write a contract acceptable to both parties.

The deal between Mr. Zuckerman and the transportation authority collapsed, people close to the negotiations said, with an impasse on several crucial issues, including the degree of personal liability of Mr. Zuckerman and his partner, Mr. Linde, for various aspects of the project.

Negotiations, which had been proceeding nearly around the clock in the last few days, broke down four hours before the midnight deadline. Last night each side was accusing the other of acting in bad faith.

"Whether you are talking about security, the separation of the building or our general participation, not one single main issue had been settled," Mr. Stangl said. "We were working but nothing was being resolved. Maybe it could have happened if they had gotten to the negotiating table earlier."

1989 Deal Revised

But Morri Berman, a spokesman for Mr. Zuckerman, said the agency's representatives had spoiled the deal by demanding more assurances, including an assumption of personal liability by the two principals.

"They never wanted to do the deal in the first place," Mr. Berman said of the authority.

The plan announced last month, a revision of an 1989 deal, would have given the transportation authority $100 million for a piece of land where the exhibition hall now stands. Mr. Zuckerman was to pay $80 million, with the $20 million balance coming from the city. Last night the principals of Boston Properties, Mr. Zuckerman's company, accused the M.T.A. of imposing unreasonable standards on the deal and acting in bad faith.

"The M.T.A. acted in bad faith from day one," said Mr. Linde. "By their actions they have blocked us from converting our $17 million cash payment into equity in the new development." He said the M.T.A. imposed unreasonable standards on the transaction by, for example, demanding significant improvements to the office building that were not called for in the letter of intent, which was signed by all parties on June 2 and set the general terms of the contract that was be signed by July 15.

Mr. Linde said it was not the tardiness of Boston Properties or its lawyer that delayed the negotiations, but additional demands by the M.T.A.

"In instance after instance," he said, "they overreached the terms of the letter of intent, required additional financial commitments and imposed standards and obligations that deviated from the letter of intent."

Mr. Linde accused the M.T.A. of "trying all along to torpedo the deal."

Mr. Dyson said he was extremely disappointed by the collapse of the agreement, mainly because of the construction and development jobs that would be lost. But added, "We are better off having the 17 million in cash instead of a lawsuit."

Although the M.T.A. owns the site, whatever happens at the Coliseum will require the approval of the city.

Mr. Dyson also said he felt the M.T.A. had been unreasonable in some aspects of its interpretation of the letter of intent. He specifically referred to the M.T.A. requirement that Mr. Zuckerman and Mr. Linde make personal guarantees for various aspects of the redevelopment project.

"They insisted on personal guarantees that are not normal in business deals of this kind," he said.

Council Member Assails Deal

Among the critics of the Coliseum agreement was Ronnie M. Eldridge, a Democratic member of the City Council whose Upper West Side district includes the Coliseum. Ms. Eldridge criticized the Giuliani administration in particular for pressuring the M.T.A. to make a deal with Mr. Zuckerman. Ms. Eldridge suggested on several occasions in the last few months that the Mayor's aides were assisting Mr. Zuckerman, in part, because the newspaper he owns, The Daily News, endorsed Mr. Giuliani in the mayoral race last November.

"We won't be selling this valuable piece of land for the lowest price," she said, "and we won't be breaking it up. So I would hope the administration would give thought to the design of the Circle in a way that can result in plan that suits the neighborhood and one that will involve real jobs, not just construction jobs."

Redeveloping the site became a goal of the city when the Jacob K. Javits Convention Center, larger and more modern than the Coliseum, was planned. The Javits Center opened in 1986 and became the city's premier convention hall.

It was nine years ago that Mr. Zuckerman, Mr. Linde and Salomon Brothers won the competition to replace a tired-looking exhibition hall and office building with a development of offices, apartments, stores and restaurants. They agreed to pay $455 million for the property.

But a series of lawsuits over the size of the project kept it in limbo for seven years. Salomon Brothers withdrew in 1987.

In response to criticisms of the size of the proposed tower, Mr. Zuckerman scaled down his project and the M.T.A. lowered the price on the property to $338 million. The last lawsuit was cleared in September 1992, making way for a closing of the 1989 deal.

But Mr. Zuckerman tried to negotiate a lower purchase price, arguing that the depressed real-estate market would make the project impossible.

After months of negotiations, during which several deadlines for a closing on the deal were set and then extended by one side or the other, they agreed on a development plan for half the site.

CHRONOLOGY The Coliseum Site

July 1985 -- After a brief but intense struggle among several developers the Metropolitan Transportation Authority selects Boston Properties, headed by Mortimer B. Zuckerman, to revitalize the site of the New York Coliseum by building a 2.9-million-square-foot residential and office complex. The sale price is $455.1 million, which is planned to be used for subway improvements.

September 1986 -- Three community boards in Manhattan disapprove Zuckerman plan amid growing opposition in the neighborhood. Critics say the project would be too tall and bulky and would be out of scale with the surrounding Columbus Circle.

December 1987 -- Salomon Brothers, a co-owner and principal tenant of the project, withdraws amid widespread layoffs in the securities business. Developer vows to press ahead, saying, "I am bullish on New York and bullish on the Coliseum project."

January 1988 -- City and M.T.A. agree to new price of $357 million.

June 1988 -- Mr. Zuckerman scales down the plan with shorter, thinner towers that will include 500,000 fewer square feet than the original proposal. Mr. Zuckerman calls it an "extraordinarily exciting architectural solution" to neighbors' concerns.

April 1989 -- In an effort to resolve legal and administrative challenges, the project is redesigned again, and the price is cut to $338 million. It now calls for 2.1 million square feet of space, and the tallest tower would be 175 feet shorter than in the original plan. Community boards voice support of new plan.

May 1989 -- Board of Estimate approves the 59-story project. September 1992 -- Federal appeals court rules that the project would not violate Federal Clean Air rules, clearing away the last legal obstacle.

November 1993 -- Boston Properties submits its final proposal, cutting the space to about one million square feet and preserving the existing office building. The Coliseum itself would be demolished. Officials say construction will begin in late 1994.

December 1993 -- Dinkins administration gives Mr. Zuckerman a 90-day deadline to close on the deal or to forfeit a $33.8 million line of credit. The deadline is later extended to April.

April 1994 -- Giuliani administration presses the M.T.A. -- and offers it $50 million -- to revise its deal with Boston Properties to allow Mr. Zuckerman to build a smaller project at a much lower price.

June 1994 -- Mr. Zuckerman and the M.T.A. agree on a new deal in which he would pay $80 million for half the original site. Mr. Zuckerman agrees to put up a $17 million nonrefundable deposit.

Yesteday -- The deal collapses and the M.T.A. says it will seek an interim tenant.

Copyright 1994 The New York Times Company