The company behind plans to build a scientific ghost town says it is pulling out of a deal to develop the make-believe city near Hobbs in New Mexico.

Pegasus Global Holdings in May announced with much fanfare its selection of a 15-square mile (24.14-square kilometre) site in Hobbs and Lea County near the Texas border for development of the Centre for Innovation, Technology and Testing. Officials said they had hoped to break ground by the end of June.

An artist rendering showing the $US1 billion scientific ghost town that was to be developed in Lea County near Hobbs, New Mexico. Credit:AP

Last month, Robert Brumley, managing director of the project, said groundbreaking would likely be delayed until August because of problems closing on the land. On Friday evening, he said the group was pulling out "due to some very complicated and unforeseen issues with acquiring the land". The deal involved both public and private parcels.