The Sonoma County Museum has been given another year to complete an expansion onto property it acquired 10 years ago with the help of a $550,000 gift from Santa Rosa.

The City Council on Tuesday granted the museum an extension until the end of 2011 to install a sculpture garden on the 7th Street property immediately west of the old Post Office building, which the museum has leased from the city for $1 per year since 1985.

When the city donated the money to the museum in March 2000, it gave the nonprofit one decade to complete an expansion on the property. If it didn't expand in that time, the city has the right to demand the museum return the money.

At the time, a multimillion-dollar complex of buildings on either side of the museum was envisioned. Those lofty plans were never realized, in part because of the two ensuing recessions, said Diane Evans, the museum's executive director.

"The economic conditions have greatly impacted what we've been able to do and what we've been able to plan," Evans said.

More recently the museum has focused its expansion efforts on opening a contemporary art museum on the ground floor of the former AT&T building downtown, a project dubbed Museum on the Square.

On the vacant lot next door to the existing museum, it is now proposing to install a fenced-in sculpture garden that would create "much needed program space" for the museum, including areas for school children to gather during visits, Evans said.

The question before the council was whether the sculpture garden qualified as a "expansion" of the museum, as envisioned in the 2000 agreement.

Vice Mayor Gary Wysocky seemed skeptical. He noted that when the city made the donation, the museum was talking about a large building project, later estimated at $27 million. Now for its half-million dollars, the city is getting a $200,000 garden.

But Evans encouraged the council to consider the museum's AT&T project and the more than $1 million in improvements it has pledged there as part of its financial investment in the downtown. She suggested that forcing the museum to repay the $550,000 could harm its ability to follow through with the AT&T plan, a high-profile city redevelopment project.

Councilwoman Jane Bender, who said she's just grateful the museum has survived the tough economic times, urged her colleagues to see the garden as a boost for downtown.

"We're enhancing the economic engine of our downtown as well as the cultural," Bender said.

Mayor Susan Gorin said the "momentum" the museum has shown toward an expansion convinced her that it should be allowed to continue.

"Yes, it may not have been what was envisioned at the time, but given the economic realities, this is where we are," Gorin said.