“Taxes will be paid in full and nothing will be done in terms of processing the planning requests until all taxes are paid in full,” Staton said.

However, such statements have been made before. The city said Strathmore would meet a Dec. 17 deadline to renew City Center II’s site plan and special use permits, but failed to pay taxes in time. Strathmore paid about $41,000 of its city taxes in October for the property at 100 W. Grand River Ave., but has yet to make another dent in its debt.

Chappelle declined an interview, but said in an e-mail that he plans to alter the special use permit “to accommodate additional tenant demand” and will honor all taxes.

But Strathmore’s financial woes double when adding county taxes. Strathmore owes about $98,000 to Ingham County, and on March 1 interest on those delinquent taxes will increase from 1 percent to 1.5 percent per month.

All properties will go into foreclosure in March 2011 if 2008 county taxes are not paid. If this occurred, the entire planning process would begin over again.

But East Lansing Planning and Community Development Director Tim Dempsey said many developers have few options for financing projects.

Although about $200,000 in taxes looks small compared to the project’s total bill, obtaining a loan for a project of City Center II’s size is increasingly difficult as banks have tightened credit lines. Dempsey said many developers take the 3 percent hit on late property taxes rather than a loan with 8 percent interest, which still would not cover the development’s needs.

Dempsey said if the city had been more expedient in approving construction for the MSU Museum and Wharton Center that City Center II might have had a site plan in time to avoid the financial catastrophe that marred the project. He added that many developers have closed altogether, while more stable operations have gone into hibernation until a better economic climate surfaces. As long as finances are stalled, City Center II won’t get many mentions during city council meetings, Dempsey said. A proposed amendment would change one property from retail and residential to include office space. This amendment, however, will not be touched until city taxes are paid.

“There’s a high level of interest in the project,” Dempsey said. “And the desire of people wanting to see something happen there means this must be and has been and will continue to be a priority for us.”