The plan to turn a city-owned eyesore into a mixed-use downtown tower faces yet another setback.
The Museum on the Square project proposed for the long-vacant former AT&T building on Old Courthouse Square will need another six-month extension from the city to give the much-anticipated deal more time to close escrow.
If approved by the City Council, it would be the third extension granted for the $1.9 million sale agreement between the city and the project's developer, The Hugh Futrell Corp.
The sale had been on track to close in April, but questions raised by the title company have held up financing for the project, David Gouin, the city's director of economic development and housing, told the City Council on Thursday.
The city's redevelopment agency purchased the five-story concrete structure in 2007 for $3 million with an eye toward finding a developer to revitalize the space.
The board in 2010 selected a development team headed by Futrell, which proposed transforming the windowless bunker into a 10-story glass-clad tower with space for the Sonoma County Museum and a restaurant on the first floor, four stories for offices, and five new floors of luxury apartments.
Gouin already granted two six month-extensions to allow the project to work through other hiccups. One involved whether to allow future residents of the building to drive through the city's transit mall to access parking. That request was eventually granted by the city council.
The latest extension granted the project until June 30 to close escrow.
But the Feb. 1 elimination of the city's redevelopment agency created a wrinkle that has further held up the sale. At that point, ownership of the building was transferred to the successor agency of the redevelopment agency, the Santa Rosa City Council.
A seven-member oversight board has been set up to review the debts and, if appropriate, dispose of former redevelopment agency assets and disperse the funds to other taxing entities. The board has taken the position that the sale of the building is a valid contract that must be honored.