Raleigh, N.C. — The City Plaza project next to the new downtown Raleigh convention center has hit yet another snag and won't open this fall as expected, officials said Tuesday.

Officials want the $16 million plaza, which also is near the Progress Energy Center for the Performing Arts, to become Raleigh's "public living room," offering a gathering place for local residents and a space for public concerts and other events.

The problem is, Raleigh doesn't own the land at the south end of Fayetteville Street that the plaza would sit on, scotching plans for glass retail pavilions, light towers and water fountains on the site soon.

Raleigh sold the land about 20 years ago to encourage downtown development, and The Simpson Organization, a group of investors in Atlanta that also owns the adjacent Bank of America office tower, now controls the plaza site and a parking garage beneath it.

Officials have been negotiating with Simpson for months on the site, but a disagreement over the plaza design has stalled the deal, City Manager Russell Allen said Tuesday.

"It's not just a matter of it being dirt beneath this property. There actually is a functioning underground facility that's owned by someone else," Allen said. "It's a complicated ... legal negotiation. It's a complicated technical and engineering arrangement."

Design plans call for Simpson to build and own four 1,000-square-foot glass pavilions at the four corners of the plaza to house retail shops. Other design elements include four light towers and four water fountains – they allow for changing light patterns and water flows – trees and other shade structures, flexible seating and improved paving.

Allen wouldn't provide specifics about the nature of the dispute, but he said officials are trying to rework easements on the property.

"It really is not a financial dispute," he said. "They understand that (the plaza) adds value to their property. They've never objected to the plaza or the street going through – they've been big supporters. They just have to watch out for their private interest in their building, and we understand that."

Gil Hearn, an asset manager with Simpson, said negotiations center on the plaza's design.

"It outlines the changes that are going to be made to the surface of the plaza, compared to the way it exists now. It allows for the pavilions to be constructed," Hearn said. "It's fair to say there have been hold-ups on both sides of the process."

City officials had hoped to open the plaza and an extension at the south end of Fayetteville Street in September, when the convention center and adjacent Marriott hotel open.

Because of the dispute, Allen said, construction on the plaza likely wouldn't start until this summer, meaning it might not open until 2009.

"We just won't have that public plaza. You won't be able to come from the north down Fayetteville Street to the hotel," he said. "It will be worth the wait. People will be pleased with that public place."

Hearn said he expects a revised agreement to go before the City Council next month.

The plaza's design was delayed for a year in late 2006 after the City Council nixed a design by renowned Spanish artist Jaume Plensa. Officials complained the design would block the view along Fayetteville Street.

Local residents, artists and city officials then held a series of workshops in the ensuing months to hammer out details of a new design, which was adopted last August.