McKINNEY – A city board agreed Thursday to give an additional $5 million to a convention center and hotel project, one week after developer O&S Holdings suspended construction work.

Although distressed by the developer's request for more cash, board members felt they could not risk the project's failure, said Mike Gibson, executive director of the McKinney Community Development Corp.

The city sales tax-funded entity already had committed $16.2 million to the project.

"It came down to do you want it or do you want it to sit there," he said. "And we cannot have something sit out there for six months or a year."

The city worked for years to court a hotel and convention center project. The Bridge Street Town Centre, on 92 acres at Central Expressway and State Highway 121, will also include a luxury spa, offices, shops, restaurants, a movie theater and the Collin College Higher Education Center, all surrounding a lake.

Work began in February on the hotel, convention center and college. The spa and theater are on hold, and O&S Holdings officials have asked the city to allow a one-year delay on the retail sites.

Chris Shane, vice president of the California-based development group, said rising construction costs and tightening credit markets are threatening the project. But he said Thursday that he feels confident about completing it with the extra $5 million.

The board put multiple conditions on the funding. If O&S Holdings fails to complete construction by Feb. 28, 2010, the company forfeits $1 million. It loses another million dollars each month beyond the deadline, with a maximum of $5 million.

The company also must secure a construction loan by mid-November, and any work stoppage without city approval would constitute default on the entire financial agreement.

The City Council, which must approve the board's action, will consider the issue at its Monday work session and Tuesday meeting.

At a meeting last month, council members unanimously criticized Mr. Shane's request but expressed unwillingness to let the project, envisioned as a landmark southern gateway to the city, falter.

"It's a bitter pill," said council member Pete Huff, who attended the community development board's meeting Thursday. "But if we don't finish this on schedule, it could be devastating, an albatross on the community. And none of us want that."

If the City Council approves the expenditure, officials expect work to resume within two weeks.