The unanimous vote granted the project its second 12-month extension to the development company in charge of the project, Strathmore Development Co.

Strathmore President Scott Chappelle said in an e-mail despite the need for additional time, he believes the project will move forward successfully.

The economic climate is one of a number of problems that have hindered construction on City Center II. In the Planning Commission meeting, East Lansing Planning & Community Development Director Tim Dempsey said some of the difficulties created by the economic downturn have hindered the project’s ability to move forward significantly thus far.

“It’s very challenging to put all the pieces together,” Dempsey said. “We continue to meet on a regular basis with prospective investors with the project. … Steps are being taken and progress is being made slowly.”

Additional obstacles have been architectural and engineering issues, as well as $128,084 in delinquent property taxes from 2010.

East Lansing Assistant Finance Director Jill Feldpausch said the taxes owed to the city would be transferred to the county after March 1.

Chappelle said changes to aspects of the project’s design were currently in the works to address some of the project’s issues.

“We are currently modifying the hotel design to better accommodate the theater concept,” Chappelle said. “We anticipate paying any property taxes currently in arrears when we close the construction financing in the next several months.”

Chappelle declined to comment about the current state of the project’s financing.

Chappelle said the plans for the project are the same as those originally approved and said the estimated cost decreased from $116.4 million to $97 million.

“Given the collapse of the financial markets, there has been very little new construction, so prices have softened,”he said.

Though the Planning Commission approved the City Center II project’s site plan, the approval doesn’t mean city officials are compelled to continue negotiations on the project, said East Lansing City Manager Ted Staton.

At the East Lansing City Council’s March 8 work session, Staton said he was preparing a letter for Strathmore reminding Chappelle the Planning Commission and the city have separate obligations in terms of site plan extensions. He said city officials were optimistic but don’t want to be limited in their decisions.

“We’re hopeful — (these are) the most hopeful signs we’ve seen in a long time — but if these options don’t materialize, we want to keep our options open,” Staton said at the meeting.

Despite the difficulties the City Center II project has encountered, Dempsey said he was cautiously optimistic about the plan moving forward.

“We have a tight time frame to move this project forward,” he said.

“We’re as comfortable as we can be considering the current economic climate.”