CITY OF GROSSE POINTE — The plan to build a hotel in The Village appears to be dead. At least for now.

While nothing has been made official, Pedersen Development Co. said it received a letter from city administration late last week seeking to terminate its preferred developer agreement to build a hotel on Lot 2 — north of Kercheval between Notre Dame and St. Clair.

The developer and city currently are working out the details of what a separation would look like, said Curt Pedersen, principal at PDC.

Council granted PDC a six-month extension to its preferred developer agreement Monday, April 16, after the developer presented its first formal plan to council. The proposal called for less than 100 rooms, a parking garage on the Notre Dame side of Lot 2, a 54-foot hotel structure with the main entrance off St. Clair and architectural motifs keeping with the style of the community.

The City asked PDC to come back within 60 days with a pro forma on the proposal’s financial viability.

Pedersen said the developer requested assurances from the city, specifically that it would receive code variances for certain aspects of the development before it moved forward with its due diligence.

“What we wanted the City to do was to say, as long as you guys (have) satisfied our due diligence where you’re going to provide enough parking and you’re financially good, we will work with you to provide the variances to build it on Lot 2,” Pedersen said.

The City was unable to provide those assurances and instead sent the letter seeking to terminate the agreement, said Pedersen.

“There’s nobody that’s right, nobody’s wrong,” Mayor Christopher Boettcher said. “It’s just we came to the conclusion that what they needed to do … and what we needed as a community, it met an impasse.”

Boettcher said he still holds PDC in high regard and believes the two partners simply couldn’t come to a viable solution of the community’s desires and financial viability of a hotel.

“In order for them to profitably have a hotel in this community, it had to be of this size, of this magnitude. … At the end of day, in order for the formula to work financially and be feasible, you had to put in something larger and not quite as fancy in order to try to get the numbers to work.”

City Manager Peter Dame was unavailable for comment.

The proposed hotel has been the center of much controversy the last year. Many residents believe a hotel in Grosse Pointe is unnecessary, would negatively impact local businesses during construction and put community safety at risk, especially students at nearby Maire Elementary School.

Jim Bellanca, who manages a trust with 80,000 square feet of retail space in the City, has been a vocal opponent of the hotel. He said he is happy the proposed hotel appears to be on its last breaths.

“It’s unfortunate that Pedersen spent as much money as he did,” Bellanca said. “I actually like the man as a person, but I just don’t think that this was the right project at the right time for The Village.”

Moving forward, Boettcher said the city learned a lot through this process.

“I think that in the future, and I’m not saying next year or anything like that, if the subject comes up, we’ve learned a whole lot in this process,” Boettcher said. “We will be very clear and thorough on what the needs of the community are prior to even starting the process and get a lot more public feedback.”