State and city officials announced Thursday they had reached an agreement to fund a $230 million project that will move the city’s community college and a renowned theatre from their current location at Long Wharf to the downtown area.

As part of the city’s most significant development effort in three decades, Long Wharf Theatre and Gateway Community College will move to sites currently occupied by the New Haven Veterans’ Memorial Coliseum and the former Macy’s and Malley’s department stores. The Coliseum, which has been closed since 2002, is expected to be demolished within the next year, city officials said.

At a press conference Thursday, New Haven Mayor John DeStefano Jr. and Gov. John G. Rowland both said the plans to move the college and the theatre downtown would help reshape the Elm City.

“We have proven across the state that this formula for urban revitalization works,” Rowland said. “We are proud to be continuing our investment in the future and the people of New Haven. It is New Haven’s time.”

The planned relocation of the college and the theatre, which the city hopes to complete by 2008, would only be the first stage of the project. The city is also in negotiations with private developers to bring a hotel to the area, as well as new apartment buildings and retail stores, said Tony Bialecki, the city’s deputy economic development director.

In an interview Friday, DeStefano said the plan was a key step forward for the Elm City, even as he sought to emphasize that it was only one component of his efforts to improve the city’s fortunes.

“It’s an important project,” DeStefano said. “But no one should think this is a resurrection here. You revitalize a city with singles and doubles. This is a double.”

The announcement followed months of negotiations between city officials, New Haven’s delegation to the Connecticut General Assembly and the Rowland administration. While city and state officials have said for several weeks that they agreed on the basic plans for the site, several major sticking points remained — parking, the cost of the new community college and whether the city would pay to demolish the 32-year-old Coliseum.

The city agreed earlier this spring to pay the estimated $6 million it will take to tear down the Coliseum, but the state will be responsible for funding most of the new development. The state will pay nearly all the $140 million needed to build the community college’s new campus, while it will also contribute another $30 million for the theatre’s relocation.

After the deal was announced, DeStefano and Rowland praised each other’s leadership, giving little indication of the deep political differences between the two. In recent months, DeStefano, a Democrat, has outspokenly criticized the Republican governor, who faces possible impeachment over gifts he received from state contractors and employees.

But DeStefano said Rowland’s travails in Hartford – and DeStefano’s public criticism over the issue – had little impact on the negotiations.

“That’s a separate issue from this,” said DeStefano, who is planning a run for governor in 2006. “Everyone had a mutual interest in making this happen.”

The Board of Aldermen will still need to approve the city’s financial commitment to the project. Ward 1 Alderman Ben Healey ’04, a Democrat who represents much of the Yale campus, said he was excited about the project, even though he shared some of his fellow aldermen’s concerns about whether its economic benefits would spread into the city’s outlying neighborhoods.

“The question of the city commitment in terms of dollars is still a very real one,” said Healey, who serves on the board’s Finance Committee. “[But] I think in general, this is the sort of plan that really will change the face of downtown New Haven.”

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