Wal-Mart Stores Inc. has canceled plans to build a store in Northridge, citing concerns over rising development costs, community opposition and demands for an environmental impact report.

Wal-Mart decided not to move forward with building a 150,000 square-foot store in Northridge after Los Angeles City Councilman Greig Smith demanded it conduct a full environmental impact report to analyze the economic impact to other local businesses. The report also would have allowed more community input on the process.

Wal-Mart initially agreed to the report but then said on Sunday that it would be too costly to perform for the location. The company also cited rising land prices, increased costs of construction and the city of L.A.’s lengthy entitlement process.

“We hadn’t expected such a lengthy process for a site that was already zoned for commercial property; there are some things you can’t anticipate,” said Kevin McCall, Wal-Mart’s local community affairs representative.

Wal-Mart approached the city nearly eight months ago saying it wanted to build a store on Nordhoff Street at Tampa Avenue, a retail-heavy area with another Wal-Mart location a few miles away in Porter Ranch. Since the location for the proposed store has long been zoned as a commercial development, the City Council didn’t have any authority or jurisdiction to stop Wal-Mart from building a store there. A Best Buy and a Levitz store had already been at the location in the past.

However, after Wal-Mart had submitted a required traffic study, Smith negotiated a package that added more parking spaces, decreased the store’s hours of operation from 24 hours per day, disallowed the sale of alcohol and firearms and created plans to cut down on car traffic in the area.

Meetings with local residents, the Chamber of Commerce and neighborhood council members ultimately led Smith to ask Wal-Mart to conduct a full environmental impact report, prompting the store’s decision to quit, Smith said.

“This is a tremendous victory for the community. I’ve said from the beginning that the traffic in this area, particularly adjacent to the Northridge Mall, is already grid-locked and this was never the right location for a Wal-Mart,” Smith said in a statement.

The proposal was not affected by the city’s big box ordinance, which forces major retailers to demonstrate the economic benefits of opening a store of at least 100,000 square feet with more than 10 percent of their floor space dedicated to groceries since the Northridge location would not have sold any groceries.

McCall would not say if Wal-Mart would pursue another Valley location.