Syracuse, N.Y. — A lawsuit filed earlier this year that threatened to block the first new construction project in Armory Square in 10 years has been dropped.

But development of the six-story apartment building at 401 S. Clinton St. is now delayed by what developer John Funiciello called a “funding gap.”

Funiciello, president of JF Real Estate , said he is still working to put together a financing plan for what was first announced as an $18 million development that would replace the crumbling Clinton Street Garage.

He said he has no new timetable for the project. It had been scheduled to start construction this fall with an opening set for 2026 or 2027.

As originally proposed, the building would have 88 mostly market-rate apartments on the five upper floors and 3,000 square feet of

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