Though disappointed to see the top five stories disappear, Santa Rosa City Council members unanimously supported a scaled back version of the Museum on the Square project Tuesday.

A downtown developer is downsizing his plans for the former AT&T building in Santa Rosa because he’s under the gun to get the long-delayed project moving this summer.

The Santa Rosa City Council this week granted a fourth contract extension to a developer hoping to construct a 10-story mixed-use tower downtown. Hugh Futrell and partners will now have until the end of 2013 to close escrow on the city-owned former AT&T building.

New state rules clarifying the dissolution of local redevelopment agencies could save Santa Rosa $7 million, but they also may force further delay in the ballyhooed Museum on the Square project. The upside for the city, which like hundreds of others around the state saw its redevelopment agency dissolved in February, is that it now has a path to recoup $7 million in loans it made to the agency.

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.

Santa Rosa continues to lay the groundwork for the reunification of Courthouse Square despite having neither wide public support for the project nor the $14 million to build it. The city’s budget woes have slowed the project, but the City Council remains committed to seeing it through. ““It is one of the council’s top priorities,” Councilman Scott Bartley says.

The developer of the proposed Museum on the Square project in downtown Santa Rosa has worked a deal with City Hall that would allow tenants to drive to the building through the city’s bus-only transit mall. City transit staff had balked at the developer’s request, citing safety concerns, but the City Council instructed staff to make it work.

A software company that had agreed to lease a floor or more of the former AT&T building has pulled out of the high-profile city redevelopment project. Arlington, Va.-based Metier, Ltd. was one of two companies that had committed to occupying space in the Museum on the Square project, which would transform the vacant city-owned monolith into a gleaming mixed-use tower.

The Santa Rosa City Council gave a tentative green light to a developer who wants future residents of his downtown high-rise to be able to drive on a street now restricted to bus traffic. The council instructed city staff to continue working with Hugh Futrell to find a way that future residents of Museum on the Square project will be able to safely access the building through the city transit mall on Second Street.

The Sonoma County Museum has been given another year to complete an expansion onto property it acquired 10 years ago with the help of a $550,000 gift from Santa Rosa. Without the extension, it could have been forced to return the money to the city. See what it plans to build on the vacant property.