GULF SHORES, Ala. — The city of Gulf Shores authorized a $1.5 million agreement with Pelican Place investors in an effort to keep the project afloat.

Since November the city has been working with companies Colonial and Langley to comprise a solution to the short payback bond issue.

Originally, Colonial Realty Limited Partnership operated the shopping center on its own but brought Langley in to lend financial support.

Last fall, both sought help from the city to ease financial stress caused by the failing economy. The city devised a plan to relieve the development with its bond payments.

“The big picture on this deal is that this was a deal that was already on the books, and despite this second negotiation I think we had to do it because it was already on the books,” Councilman Jason Dyken said. “The city is going to benefit greatly from this project, especially as the economy turns around.”

Over the next six years Pelican Place will have a reduced payment.

Starting this year Pelican Place will pay the city $400,000 less than originally designated. For the next two years it will be free of $300,000, and $200,000 will be excused for 2012 and 2013. In 2014 and 2015 there will be a $100,000 leeway each year.

“Over six years the city will have not given but postponed the payment of $1.5 million,” Mayor pro tem Carolyn Doughty said. “The $1.5 million will be repaid to us, the city will be made whole of that.”

According to Councilman Philip Harris, the yearly amounts are the maximum money excused but is not the required amount.

If Pelican Place sees an increase in business and can make a heavier payment they will.

Several times Doughty has said the city is offering help because it doesn’t want to see the project “go dark.” Offering the assistance has also eased the mind of Publix.

The national grocery store chain has held off making an agreement to break ground in order to see what the city would do. Publix has proposed building a store at the corner of Highway 59 and County Road 4.

With the approval of Monday night’s ordinance, Doughty said Publix is expected to begin construction no later than June this year and should be finished no later than June 2010.

“As they develop Publix we are going to generate revenue in impact fees and building permits,” Dyken said explaining while the development is getting a financial margin, enticing Publix to build will bring in more money.

The city owns the property Pelican Place sits on.

The structure of the shopping center that houses Books-A-Million, Bed, Bath & Beyond and boutique businesses, as well as the land, has been appraised at $30 million.

If neither Colonial, Langley or their bank cannot finance the project and pay the $10 million left on the debt service, the city would be left with the empty complex.

If the debt service can be paid off, the companies plan to buy Pelican Place from the city.

If they do so before the bond issue’s due date, Colonial and Langley will receive sales and ad valorem tax for the remaining duration of the bond.