Nov. 4--PORTSMOUTH -- The developer of a delayed downtown hotel project has been granted a construction extension.

The Planning Commission voted Tuesday to allow Jay Barot of Old Towne Hospitality LLC another year to build a five-story Holiday Inn at 219 Pavilion Drive, by the entrance to eastbound Interstate 264.

F inancing for the project remains unsettled. Barot plans to start building as soon as a permanent lending source becomes available, according to city planning documents. Site work and engineering have already been done on the 4- acre parcel.

"My client has put a lot of money in the ground already," said Mike Nuckols, who represented Barot before the commission.

The $13 million project has been delayed because bonds that were intended to be the main financing have not been marketable in the current economy, according to city planning documents.

The use permit was originally issued in June 2007.

In April, City Council members questioned the status of the project after work slowed at the site.

The city's Economic Development Authority had sold the property to the company, and hotel construction was supposed to be completed April 30. In a news release, council members called on the development authority to "vigorously evaluate the key requirements and deadlines."

In May, the development authority sent a letter to Old Towne Hospitality, saying it would bill the company $10,000 for each month the project remained uncompleted.

Vice Mayor Bill Moody Jr. said in a phone interview this week, however, that city leaders decided that, given the economy, fining the developer would be counterproductive.

The hotel chain has also extended the hotel delivery date until August.

Nuckols said Barot might be back next year asking for another extension because the project has an anticipated 12-month construction period.

Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com

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