There's a new dimension to the fallout from the Sept. 16 shooting in Baghdad that left 11 Iraqis dead: Blackwater USA apparently has stopped all its expansion projects.

On Wednesday, the North Carolina private military contractor canceled a $5.5 million real estate deal to buy 1,800 acres of farmland near Fort Bragg, where the company was going to set up a training ground for soldiers and corporate executives.

The diplomatic and public relations damage from the shooting, combined with Tuesday's scheduled testimony at Congress by Blackwater Chairman Erik Prince, prompted Blackwater to put all new projects on hold, according to the president of a company that had a deal to sell the land to Blackwater.

"Blackwater said they had pulled all new projects off the table because of this shooting in Baghdad, and because they were preparing Prince for Congress," said Wayne Miller, president of Southern Produce Distributors. "It's a shame. This would have been good for the economy of North Carolina."

Southern Produce owns a huge tract of farmland and wetlands known as Barra Farm, near the Cape Fear River.

Miller said he was approached by Jim Reese, the president of a security company called TigerSwan, which has offices in Cary and Breckenridge, Colo. TigerSwan was founded by Reese and Brian Searcy, who are both veterans of Delta Force, the highly trained special forces unit based at Fort Bragg.

TigerSwan wanted to set up a training center near Fort Bragg with firing ranges, Miller said. TigerSwan planned to train soldiers from Fort Bragg, as well as corporate executives from Research Triangle Park and elsewhere.

According to its Web site, TigerSwan conducts training sessions in weapons, VIP protection, evasive driving, surveillance, urban warfare, self-defense, sniper and counter-sniper operations, convoy and motorcade protection, and assault planning. The company can also conduct counter-surveillance, security assessments, and planning and evaluation for protection against terrorism and weapons of mass destruction.

Miller said he was impressed with Reese and his project but wanted to know whether TigerSwan could finance such a land purchase.

"Anything you've got," Reese replied, according to Miller.

Miller said he had a hunch that Blackwater was backing the deal. When he asked, Reese confirmed it.

As he was negotiating the deal, Miller went on a tour of the Blackwater compound in Moyock, along with D. Stewart Precythe, the owner of Southern Produce. Miller was impressed with the firing ranges, the lake for training scuba divers and the mock buildings used for training in close-quarter fighting.

Prince later flew down to Barra Farm, flying over the property three times before landing on a strip at the farm. Prince agreed to buy the land for $5.5 million and shook hands on the deal, Miller said.

Deal canceled

Southern Produce signed a contract that contained a clause allowing the buyer to back out for any reason through Thursday, Sept. 27.

On the evening of Sept. 26, Blackwater CEO Gary Jackson called Miller to cancel the deal. Jackson said the fallout from the Baghdad shooting and the spate of unfavorable news articles caused Blackwater to pull the plug on all new projects.

Ten days before, Blackwater contractors guarding State Department officials in Baghdad opened fire, killing at least 11 Iraqis and inflaming anti-American sentiment. Iraqi officials say they will file charges against the guards; Blackwater says it was firing at insurgents in self-defense.

Neither Blackwater nor TigerSwan could be reached for comment on the land deal.

Miller said he hopes that Blackwater and TigerSwan can move ahead with the project once the furor in Baghdad and Congress dies down.

"Obviously there's a huge demand for this sort of training," Miller said. "Terrorism is not going to be a memory in five or six years."