The City Council, acting as members of the Agency for Community Development, rejected an agreement extension request to help finance expansion of the Rodeway Inn.
Owner Angela L. K. Liu, who plans to add 55 rooms to the 66-room motor inn on Garden Grove Boulevard, had sought to extend an agreement with the city until 1995.
City officials had agreed to contribute $250,000 to help Liu with costs. But earlier this week they balked at the extension and terminated the agreement.
They continue to support the expansion, but believe there's no advantage in making a long-term agreement because the future economy is unpredictable, Community Development Director Gregory Devereaux said.