East Lansing Mayor Vic Loomis detailed a number of East Lansing technology firms that struggled to find office space in the community and said many fledgling businesses could expand by the end of the year. He said the site plan amendment to the project’s Building B — where the Albert Avenue surface parking lot currently stands — would address office space demand.

“We need, quickly, to find some office space,” Loomis said. “I view this proposed changed to Building B of City Center II to be a positive change.”

Scott Chappelle, president of Strathmore Development Co., which is handling the project, must now provide the city with a written financing plan for an updated development agreement. If the city approves the financing agreement, Chappelle will need to provide the city council with a legal description of all properties.

Chappelle, however, said it is taking longer than he hoped to construct a plan.

“The credit markets have not significantly improved for new construction in Michigan,” Chappelle said in an e-mail. “Some narrow market segments are starting to attract interest but that is not applicable here. We still feel we have viable options to move forward but it is going to take a lot of hard work.”

Chappelle applied for a loan guarantee from the U.S. Department of Housing and Urban Development, or HUD, but said there has been so much interest in such funding that deadlines have passed without word as the federal agency sorts through mounds of applications.

But Phil Bellfy, an MSU associate professor of writing, rhetoric and American cultures and longtime City Center II opponent, said he and other community members warned against entering into an agreement with Chappelle, who has had difficulty financing several other projects. He said he doubts HUD would grant Chappelle the loan, adding City Center II might not materialize with Chappelle at the helm.

“If they’re waiting for this developer to get a financing package, they obviously have a lot of time on their hands,” he said.

East Lansing community development analyst Tim Schmitt said it shouldn’t be enough that Chappelle shows he has a way to obtain financing. He said that was the problem with the original development agreement, as the credit market collapsed around the time it was approved in 2008 and extensions to acquire proper financing bore no fruit.

“He really needs to demonstrate that he has (financing),” Schmitt said. “There’s any number of ways to acquire it, but in this market it’s difficult.”

Chappelle said the absence of a sound financing plan has delayed his intended summer groundbreaking target, but he still intends to begin work later this year.

Councilmember Kevin Beard said he is unsure whether financing will be easily achieved given the credit market. But since Chappelle paid all taxes on his parcels Jan. 26 after months of delinquency, the city will have to wait for Chappelle to make the next move.

“He’ll either be able to secure the financing or he won’t,” Beard said. “But he owns the property and has the right to develop it and redevelop it.”

Many students are eager for progress and hope to get some use out of a main downtown corner that has been dormant for several years.

“I think they need to get it done — its (current buildings) are wasting a lot of valuable space,” said Brent Poikey, a zoology senior. “I hope to see any businesses that will serve college students better.”

Rachel Thornton, a no-preference freshman, said City Center II would make East Lansing and MSU a more attractive destination.

“The idea of (the project) is necessary, because I know while people will still come to State, anything you can add to the area will be a benefit,” she said.

Staff writer Andrew Krietz contributed to this report.