The project was to cost about $55 million, with $30 million in development planned for the first phase.

The company had planned on building a six-story, 229,030-sf office building; a seven-story, 101,188-sf hotel and 14,025 sf of retail. The $95 million project was shortened in October 2001 due to a lackluster economy and recent world events, according to the company.

Now, the deal must get shorter, the developer say.

"The company asked for a change, they want to switch to building a hotel first instead of starting with the office building. They also want to adjust > how the payments are made," says Tim Thwing, the city planning director.

The company is paying $2 million to build the office, retail and parking deck on the land. They can then bring in a hotel firm within three years, or the company will build another office building of the same size. Schostak will then pay another $2 million to the city for the property.

Both the commission and the DDA rejected the change.

"I think it was a little bit of posturing," Thwing says. "They were presenting that they need to change it, that it was the only way the deal would fly. It's now back in the developer's court."

Mayor Bill Urich says the developer continues to face hard times, and wants to build the smaller project first to see the viability of building the larger project later.

The developer can pull out of the deal, without paying any of money, by Tuesday.

Schostak officials were not available for comment.

The land in Royal Oak is seen as a gateway to the downtown, one of Southeast Michigan's most popular nightlife spots. Tri-Mount Construction built condominiums just north of the site but lost its bid to build a hotel and more condos on the site in March 2001, after the company scrapped an office project that was supposed to adjoin the hotel.