The problem was not the complex but the land it sits on, The Wall Street Journal reported. The dispute is still in the courts, and it is unclear what Wasilla's final cost for the property will be.

Palin, the Republican vice presidential nominee, has made her mayoral experience a campaign issue. In her speech to the Republican convention, she said she had "actual responsibilities" as mayor that Democratic presidential nominee Barack Obama did not have as a community organizer.

The transaction involved the Nature Conservancy, which wanted to sell land it owned in Wasilla to finance purchases of ecologically sensitive areas elsewhere, and Guy Lundgren, a real estate investor.

In 2001, after Wasilla won a favorable ruling from a federal judge, Palin proceeded with the sports complex project on the assumption that the city would win any appeals. However, the judge later reversed his ruling.

"It's too bad that the city of Wasilla didn't do their homework and secure the land before they began construction," said Kathy Wells, a longtime activist. "She was not your ceremonial mayor; she was in charge of running the city. So it was her job to make sure things were done correctly."

Local officials said the complex itself was finished on schedule and under budget.