The proposed downtown hotel, a key part of the Centre City project, took another step forward Thursday when the city redevelopment authority approved a new partnership agreement with the building's developer.

However, the fate of the city's proposed neighboring parking garage took a step back after the prospective contractor for the work withdrew its bid.

“I don't know what's going to happen with the (garage),” said Mayor Tom Donaldson. “We're in uncharted territory. But right now, I'd say it's in critical condition.”

New hotel agreement The redevelopment authority is finalizing its terms with J.S. Capitol to build the 76-room Marriott Springhill Suites hotel at the corner of East Jefferson and South McKean streets.The authority board voted Thursday for the new partnership that would reduce its ownership in the hotel from 36 percent to 25 percent. The change was made to make up for the extra costs the private investors have devoted to the project.“We didn't have the money to put into it,” said Art Cordwell, executive director of the authority. “We had to make a deal somehow.”While the authority gave up some ownership, it gained some incentives in the new deal, including up front reimbursement for its administrative costs.Don Graham, authority solicitor, said he is working with attorneys for J.S. Capitol to finalize the agreement that would close the sale of the authority's lot on which the hotel would be built.“Long story short, that part is on track and moving ahead,” Graham said.The two sides also are awaiting the completion of the developer's construction loan from NexTier bank, which was increased from about $2.9 million to $3.4 million, as well as two other loans to finance the project.Graham said the deals would be completed simultaneously and would take about three weeks.Donaldson said the partnership agreement would likely be enough to satisfy the city's desire to have the hotel's future in place before it would award contracts for its proposed parking garage.

Garage status unclearThe city said it doesn't want to commit to the garage until it knows for certain that J.S. Capitol will build the hotel because the hotel will be the primary tenant of the garage — guaranteeing to pay for at least 50 spaces each night.However, Uhl Construction of Allison Park, which had the lowest bid on general contracting duties for the 239-space structure, withdrew its offer Thursday afternoon.The city missed its 60-day deadline to award contracts on the garage so Uhl was able to withdraw without sacrificing its bid bond.“I'm very disappointed,” Donaldson said. “I understand they were exercising their right, but it harms us.”He said Uhl withdrew its offer due to an error made during the pricing of the project.“Their steel supplier misquoted the price originally,” Donaldson said, adding the company worked to see if it could resolve the issue before withdrawing the offer.Donaldson said the city can award the contract to the next lowest bidder or rebid the project.Thomas Construction of Grove City was the second lowest bidder with a base bid of $3.975 million, although it had an alternate design for $3.88 million.Uhl's base bid was for $3.63 million.The project would require about $1 million in other costs and fees.The city authorized itself to spend up to $7 million through a bond issue. However, the city budgeted about $1.8 million of that bond to pay off the parking authority's existing debt. It also will spend $311,000 on the West New Castle bridge replacement project, which is under construction.Donaldson said he has not spoken with Thomas Construction and does not know if it intends to withdraw its bid.The city has until Sept. 14 to sell its bonds to pay for the work.Donaldson said rebidding the project could be dangerous for the city.“If the price goes up, we're out of the game,” he said.Donaldson said he wants to have a city council meeting Monday night to discuss the project.Donaldson said if the garage falls through, the hotel still could theoretically be built.However, the developer would have to buy the adjacent lot to supply adequate parking for the hotel.“He needs to have something like 75-spaces to meet code,” he said.Donaldson said if the garage falls through, the city will seek a bond issue of about $3 million to refinance the parking authority's debt, automate the tier garage and pay for the bridge replacement project.