Disputes within Chinatown and Honolulu Hale are delaying, and possibly endangering, the city’s plans for an affordable rental tower for seniors on River Street.

Mayor Kirk Caldwell announced Nov. 9 a development agreement with Michaels Development Co. for the $49 million Halewaiolu tower on a half-acre of city land between Vineyard Boulevard and Kukui Street.

City Council Chairman Ernie Martin, however, has yet to formally introduce a resolution approving the agreement, citing a need for community meetings to resolve disagreements between Chinatown groups.

Karen Seddon, Michaels Hawaii regional vice president, said that without an approved development agreement, her company is not able to submit an application to the Hawaii Housing Finance and Development Corp. that would make the project eligible for state and federal grants, tax credits and low-interest loans.

“It takes sometimes six, seven or eight months to put all our documents together,” Seddon said. As a result of the delay, Michaels will not be able to submit an application for financing in time for the HHFDC’s June distribution timeline. Applications for a second round of grants, tax credits and loans must be done by August.

If the developer misses that deadline, it will need to wait until March 2017 to be eligible, Seddon said. The delays are also expected to increase the overall price tag of the project just as interest rates and construction costs are projected to rise significantly, she said.

“It’s going to cost us money,” she said. “We’ve really missed our sweet spot of going and getting our financing started.”

The delays could also affect a $1 million grant that the project received from outside the state that requires the developer to show progress, Seddon said.

Asked whether the delays could nix the project, Seddon said, “The possibility exists, but we’re going to do everything we can to keep it going.”

Stanford Yuen, a member of the Downtown Neighborhood Board, said he’s worried that the slow pace could hinder the project.

“Final design is on hold pending community input which should have been completed months ago,” Yuen said, reiterating Seddon’s concerns that delays could jack up project costs. “At the worst case, the project could be doomed if funding is not available, money is lapsed or costs become overwhelmingly high, making the project unfeasible.”

Chu Lan Shubert-Kwock, head of the Chinatown Business and Community Association, supports the project, which will include a community center.

She accused downtown Councilwoman Carol Fukunaga of holding up the agreement to please constituents who want to kill the project.

Fukunaga told the Honolulu Star-Advertiser that she has nothing to do with the delays, and said the decision to hold up the resolution is Council Chairman Martin’s.

“I’ve told people that if there is a concern, they should talk to Chair Martin, they should talk to other Council members about the project,” Fukunaga said. “I certainly have no control over the resolution or what is happening with it.”

Fukunaga said she has been talking to community members who want to discuss their concerns with the developer. “We’re trying to be respectful of the process and make sure that whatever goes forward is something people are satisfied with and endorse.”

Martin, in a statement, said community members are deeply divided on the project, and he blamed the administration for not moving more quickly.

“A significant number of residents have complained about being left out of the process and deserve an opportunity for input,” Martin said. “I have held up the introduction of the development agreement (resolution) that enables the project to proceed until the administration fulfills its obligation to conduct public meetings as promised to the community.”

Sandra Pfund, who heads the city Office of Strategic Development, said the administration filed the resolution approving the development agreement with Michaels in mid-November.

Asked whether she is concerned about the delays, Pfund said it is important for the Council to move quickly.

“This project does require a lot of deep subsidies because it’s a very affordable, low-income rental project … and there are certain periods during which you need to apply for them,” she said.

Without a development agreement, Michaels does not have control over the site and cannot begin the environmental assessment process needed to pursue grants, tax credits and loans, Pfund said. “The development agreement is crucial to have a successful application for the funding.”

Pfund said she’s attended 15 meetings with either the neighborhood board or people in the community since April.

Pfund said she also will hold meetings between the developer and those closest to the project in the coming weeks before holding more public community meetings at Fukunaga’s request.

Howard Lum, president of Lum Sai Ho Tong, the club that owns the building next to the planned tower, said he does not oppose the project, but wants the developer and the city to hear his concerns and those of officials at nearby temples.

Lum said his group wants a 60-foot setback between its property and the new tower. His group and other neighbors are also concerned about how the project will affect smoke from Borthwick Mortuary’s crematorium on the Diamond Head side of the planned tower.

Michaels officials have said a 60-foot setback would make the project unfeasible.

The neighborhood’s feng shui, the Chinese concept that people should find ways to achieve harmony with the environment around them, also needs to be considered, Lum said.