The Butler Redevelopment Authority has reached an agreement with PNC Bank to delay repayment of a $2 million loan used toward the ongoing construction of the Marriott Springhill Suites downtown until early January.

The agreement isn’t a formal extension of the loan repayment, but the bank agreed to “hold tight” until the sale of the hotel closes by Jan. 6, said Veronica Walker, acting executive director and operations manager of the authority.

In October Butler City Council, which guaranteed the loan for the authority, and PNC agreed to extend the repayment or maturity date to Dec. 6.

J.S. Capitol, the hotel developer and current owner, is in the process of selling the hotel for $7.3 million. Walker said the authority has been told the sale is supposed to close no later than Jan. 6.

“So they’re just going to hold tight until they find out what’s going on for sure,” Walker said, referring to PNC. “They’re going to hold on until the final date of closing to see if it’s completed.”

A formal extension of the maturity date would take two months to process and require the authority solicitor to get involved, which the authority would have to pay for, Walker said.

When the hotel is completed, the city will receive a $2 million state grant to pay off the loan.

The loan agreement between the city and developer requires the developer to repay the loan if the city defaults.

S&P Global lowered the city bond rating from BBB, which signify medium grade investment bonds, to BB+, signifying noninvestment grade, or junk, bonds in October, citing the city’s lack of resources to repay the loan.

Earlier in the year, S&P lowered the city bond rating from A, signifying good to medium grade bonds, to BBB.

The 76-room hotel at the corner of McKean and Jefferson streets is part of the $13.2 million Centre City project that includes a four-floor, 239-space parking garage next to the hotel.

Walker said the project is nearing completion. Installing furniture, a traffic sign, an exterior bench and planting a tree along Jefferson Street are among the last uncompleted items, she said.

PNC Bank and Butler Mayor Tom Donaldson could not be reached for comment.