PAWTUCKET - City officials remain sharply divided on the best ways to re-establish business growth along busy Division Street, even as the future of two major redevelopment projects there is questioned.

The infamous Division Street hotel project, one that was originally intended to bring new revenue to the city starting last year, is now tied up in potentially lengthy court proceedings, but questions of ownership and liability are not keeping city leaders from moving forward with a plan to solicit new development bids for the property.

Planning and Redevelopment Director Michael Cassidy has been given the green light to start the process of seeking new proposals for the property, whether that means another hotel deal, office building, retail development or other uses.

Now adding to the questions surrounding Division Street's development is a possible attempted halt to the opening of an expansive carpet restoration business in a building at 50 Division St.

That project, one that comes with a promise from the owner of 40 or more new jobs in this employment-challenged city, could also soon be in jeopardy.

Representatives from the Pawtucket Riverfront Commission voted late last month to seek a legal opinion on whether they can legally launch a court challenge of a special use approval from the Pawtucket Zoning Board of Review for the 25,000-square-foot carpet cleaning business.

Representatives from the city's law office did not return a request for comment on their recommendation.

Riverfront Commission members say the carpet cleaning business goes against long-range plans, hashed out over a period of years, for a cohesive and beautiful riverfront to be developed in conjunction with the Pawtucket River Bridge replacement project. That reconstruction project is due for completion sometime in 2012.

In short, the question that is dividing city officials is whether to stick closely with a redevelopment plan for the city's riverfront or take into greater account the city's financial straits and allow businesses that aren't quite what they envision to open here.

"In a perfect world, you might want to see a health club or something like that for the riverfront, but you know, it's not a perfect world," said City Councilor John Barry III, a member of the Riverfront Commission who is in favor of allowing the carpet cleaning business to open.

Barry said that jobs are of utmost importance to the city right now, and each new business that leaders can secure potentially has a ripple effect on nearby businesses.

If a Superior Court challenge is deemed in order by the city's law office, commission members have also asked that city attorneys move forward with the challenge.

The core issue for the 50 Division St. property is what type of development will best fit in with future plans for the riverfront land. Members of the Riverfront Commission strongly opposed a zoning variance being given to John Day and his J. Brian Day Restoration Experts last December.

Cassidy, who serves as a member of the Riverfront Commission, had recommended against a variance for the nine-acre site at a December meeting, saying that "commercial mixed use is not on the list of approved uses" for the riverfront zone. He strongly opposed granting a zoning variance to facilitate the $1 million sale of the building.

Zoning Board members - who expressed an interest in securing new jobs for the city - approved a use variance that effectively paved the way for the expanding Massachusetts-based carpet restoration business to occupy space next to the Pawtucket River Bridge.

While the Zoning Board decision may not have been according to the letter of the Pawtucket's table of land use regulations, said some zoning board members, it does abide by the spirit of the law and is good business for the taxpayers of Pawtucket.

"If we don't have enough jobs, we don't have a city to plan for," said Board of Review member Douglas McKinnon prior to the decision.

A Riverfront Commission meeting was happening even as a judge continued to sift through ownership and liability issues surrounding the nearby land once tabbed for a Hampton Inn hotel. The city was sued by Carpionato Properties late last year after reclaiming the deed for the land.

Members of the Pawtucket City Council received a mostly closed-door update on the latest to-do with the Division Street hotel property on Jan. 20.

At the council's request, Cassidy told The Breeze, he and his staff are preparing a request for proposal for a market analysis on what type of development is best for the property. That action will move forward even as a Superior Court lawsuit from former developer Carpionato Properties against the city proceeds, he said.

"The council asked me to look at preparing a proposal for market analysis to see what might go there and then bring it back to them," said Cassidy.

Some in city government have questioned whether a hotel is the best possible use for the land located near the Pawtucket River.

Representatives for Carpionato Properties filed a lawsuit in Superior Court last September alleging that Pawtucket officials breached a long-standing agreement allowing Carpionato to build a hotel on waterfront land when they repossessed the Division Street property last month.

Cassidy said last October that if officials can get Carpionato's claim of continued ownership thrown out in court, something they see as a good possibility, all that would then be left to decide is whether the city owes the developer any of the estimated $1.5 million Carpionato claims to have invested into the property over the past five years.

City leaders and their attorneys are claiming that they now own the waterfront property off Division Street after they exercised the terms of a "reverter clause" last fall. They say that clause allowed them to retake the property they essentially gave to Carpionato in 2004 if the developer had not completed the construction of a promised hotel there within five years.

Both sides on the issue have remained confident that a Superior Court judge will uphold its ownership rights. Representatives for Carpionato are asking not only that the contested land be returned to the company, but are charging that Pawtucket was "unjustly enriched" through the money Carpionato invested in the property. City officials have countered that Carpionato's claims of ownership are not likely to hold up in court due to the "solid" reverter clause.

Carpionato attorney Thomas Moses, of the Providence law firm Moses and Afonso, told The Breeze last October that, "We believe the property will ultimately be returned to Carpionato Properties," and that the city "cannot unreasonably withhold an extension" of a 2009 deadline for construction of a hotel to be complete. That extension was sought in part due to a deepening worldwide recession that made doing business in 2008 and 2009 very difficult for companies like Carpionato, according to Moses.

The lawsuit from Carpionato is still in its early stages, according to Cassidy. City officials are waiting for a response to their request for information, he said