PepsiCo wants the option to drop its project to build a Gatorade factory in Albany, and the city has refused to grant one, the city council learned Monday.

But the city and SVC Manufacturing, the Pepsi subsidiary planning the project, have agreed to a delay in the start of construction of up to three years.

According to the draft of an agreement handed to the council Monday, the company will pay Albany $910,000 for the first year's delay, to be followed by $710,000 each year if the project is delayed for a second and third year.

City Attorney Jim Delapoer and City Manager Wes Hare briefed the council Monday.

Delapoer said that if the company decides not to build the plant, it will owe the city millions of dollars.

PepsiCo, the city, the state and Linn County signed the development agreement last year. It called for Pepsi to start building, this year, a Gatorade and Propel manufacturing plant, along with a plant to make plastic bottles, on property south of Ellingson Road and east of the Union Pacific tracks.

This spring the company announced that changes in market conditions had caused it to reconsider the project, and it promised a decision by September.

The $250 million plant is to employ at least 250 people at an average of 150 percent of the median wage in Linn County.

On Monday, Councilwoman Sharon Konopa, who has reservations about the project and about the fast pace of growth in Albany in general, suggested that if PepsiCo wants the option to get out of the deal, the city should offer one. Her suggestion was not adopted.

In a related matter, the council got a report that cost estimates for an overpass over the railroad tracks at 53rd Avenue, and a new road from there to the Pepsi property and Ellingson Road, would cost about $16 million, rather than $9.5 million as city engineers had first estimated.

The road costs are to be borne largely by benefited properties including the parcel owned by Pepsi.

Albany lawyer Roger Reid complained to the council that someone should be held accountable for underestimating the cost by that much.

Hare said it was he who is responsible for the work of the city staff. "I regret we didn't get a better estimate," he said.