Developers interested in creating a for-profit reservoir on the San Joaquin Delta said the project has hit a snag.
The proposed deal has become a major issue in the state Senate race between Stockton Mayor Gary Podesto and incumbent Sen. Michael Machado, a Democrat from Linden.
Stockton builder John Verner said his investment group has been unable to get an agreement to buy a controlling interest in the Delta Wetlands Project.
The company wants to store water on flooded farmland and sell it to the highest bidder.
Stockton officials have expressed interest in buying the water, a move Machado has criticized. Podesto has also taken campaign contributions from Verner and his associates.