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ROYAL OAK,MI-A developer has agreed to pay $50,000 to the city, buying more time to build a $55-million office/hotel project. The city is taking the money.

The city council and the Downtown Development Authority voted to accept $50,000 from Schostak Bros. of Southfield to delay the project, to be built at the junction of I-696 and Woodward Avenue.

The non-refundable $50,000 fee is part of a $1.5-million deposit paid by the company.

The firm had faced a deadline on its due diligence, and claimed the economy has forced it to alter its plans for a 180,000-sf, seven-story office complex, a 75,000-sf to 100,000-sf hotel with about 125 rooms and a four-level, 625-space parking garage.

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

City officials turned down a request by the company to build a hotel first instead of starting with an office building.

The current deal has the company 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.

With the payment, the company moved its due diligence deadline to Jan. 16.

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.

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