DALLAS — With the threat of a lawsuit rising, the Dallas suburb of Irving, Texas, on Thursday sought a way to resolve a bond financing dilemma for a $252 million entertainment center as a developer's deadline neared.

The proposed entertainment center attached to the city's new convention center would be developed in a public-private partnership with a developer known as the Las Colinas Group.

The triple-A-rated city expected two years ago to be able to issue up to $170 million of debt to finance the project. Since then, the City Council majority in favor of the project, including the mayor, has been turned out of office. Irving recently received confirmation that revenue bonds issued for the project would be rated below-investment grade.

To salvage the project, the Las Colinas Group in June proposed new financing terms, under which the developer would increase its stake to $210 million from the previous $80 million, requiring only $40 million from the city instead of $170 million.

Attorneys for LCG sent a letter to Irving complaining about the lack of communication between the two parties.

"In particular, my clients have been working hard to overcome the city's inability to meet financing obligations and secure the investment-grade bond rating it is required to bring to the table under the development agreement," attorney Lawrence J. Friedman wrote.

While Friedman wrote that his clients wanted to avoid litigation, they declined to surrender their right to sue as a condition for further negotiations.

The existing development agreement between the city and LCG expires Monday if both partners fail to close on their financial contributions to the project. Prospects for such a deal, which usually takes weeks, are remote.

Council members Rose Cannaday, Mike Gallaway and Dennis Webb sought public discussion on the project after a new development firm, TDI proposed new ways to finance the project.

Mayor Beth Van Duyne this week called for a special executive session before the public meeting so council members could receive legal advice on TDI's proposal.

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