The financial problems with the city redevelopment authority may have slowed financing talks for the Centre City project's hotel.

Art Cordwell, the executive director of the authority, said J.S. Capitol Construction has not gotten final approval from a bank on financing for the project's 80-room Marriott Springhill Suites hotel.

“The bank hasn't given final approval to finance the hotel yet,” he said. “I spoke with the developer (June 4) and he said the bank wanted additional information.”

Part of that information requested, Cordwell said, regards the authority's delayed $300,000 state Community Development Block Grant from 2013.

While the delayed grant may have caused some delay, Jeff Schmitz, the owner of J.S. Capitol, said his firm is “very close” to closing a deal.

“We're in the final stages,” he said. “It'll probably be done in a week or two.”

Schmitz said J.S. Capitol is furthest along in talks with NexTier Bank and Multi-Bank Securities, a credit union in Michigan.

Despite the developer speaking with multiple banks, financing will be through one firm.

“We're just keeping our options open,” Schmitz said.

The state delayed its grant to the authority because of issues with how the authority wanted to allocate some of that money.

The state initially had concerns about the authority's $50,000 allotment for street improvements for the Centre City project, which also will bring a Rite Aid Pharmacy and a 225-lot parking garage to the block surrounded by South Main, East Jefferson, East Cunningham, and South McKean streets.

Cordwell said the state no longer has concerns with the authority spending money on street improvements with the project, but it rejected the authority's proposal to use about $25,000 on mortgage payments on the Penn Theater and the authority's office building at 115 E. Cunningham St.

The authority still is waiting to receive about $275,000 of the grant that has been approved.

The developer is looking for about a $3 million loan to finance construction of the hotel.

The redevelopment authority, which would be a 40 percent owner of the hotel, will chip in with about $2 million of already approved state funds to pay for the structure.

Schmitz said he is speaking with multiple banks as backups, and that there is no concern the project won't receive financing.

Cordwell, who declined to comment on which banks the developer was speaking with, said the worse case scenario is the project is delayed, but added he is confident financing will be in place soon.

Schmitz said the financing plan for the new parking garage is nearly complete.

He said his plan is for J.S. Capitol to finance the construction of the structure. The developer will lease it to the city parking authority for one year before selling it to the authority.

The city parking authority said it has not been presented with a finished deal.

City council authorized late last year an ordinance allowing the city to spend up to $6.5 million for a new parking garage with a bond through PNC Bank.

Schmitz did not comment on the projected cost of the garage, but said the city would buy it back at a fixed rate on its construction cost.

Both Schmitz and Cordwell are not concerned about the financial woes of the authority affecting the project.

Cordwell said the hotel's status will not change if the authority ultimately defaults on its Penn Theater mortgage, which it is struggling to pay following the rejected grant from the state.

“Our investment into (the project) is not on a loan basis,” he said. “So there wouldn't be any impact.”

Schmitz said he isn't worried either.

“That doesn't affect us one way or another,” he said.

Schmitz hopes to break ground on the hotel by this fall.

Cordwell said everything is in place other than the final financing approval.

“Once the bank approves (the financing), the developer is ready to roll,” he said.

Work on the site of the Rite Aid pharmacy is under way. Crews are filling in the basement of the former Sons of Italy building.

Schmitz said the pharmacy is on schedule to open in October.