City council's reservations over a $1 million bailout of Akron businessman David Brennan's downtown hotel won out tonight.

In April, the Radisson Hotel Akron City Center, owned by Brennan's Downtown Hotel Co., asked the city to absorb about $1 million of a $2.5 million loan balance owed on the business.

Despite the fact that the proposed debt-settlement agreement, which would have required the city to forgive about $1 million in loan payments, was backed by Mayor Don Plusquellic, council said no.

Tina Merlitti, (Ward 7), said council turned down the offered settlement because the original proposal didn't cover the entire debt or the obligation the hotel had to the city.

''We really didn't think that this (deal) was fair to the citizens and to other developers we've given loans to,'' said Merlitti.

Brennan's hotel company, which reportedly is insolvent, has not made a loan payment to the city since 2005.

In 1995, the city put together a $2.9 million loan package for the ailing 270-room hotel to upgrade the site.

Plusquellic had argued that some money is better than none if Brennan's company files bankruptcy or faces foreclosure.

Merlitti acknowledged that possibility.

''Bankruptcy is a consideration ... We have been working with them (hotel) to identify additional assets that could be used to fulfill the rest of their debt obligation and we are going to continue to negotiate. I expect to see something come back in the next few weeks,'' said Merlitti.

Commenting on the council's vote against the proposed settlement, Diane Miller-Dawson, the city's finance director, said ''it is council's right to do that.''

Miller-Dawson said that the city is ''still working to try to find a deal that is acceptable to all parties.''

To date Brennan's group has paid the city $1.9 million in loan principal and interest.

''We can't take a loss on this,'' continued Merlitte.

''We are not trying to make a profit at this point,'' she said, explaining that the city regularly give loans to developers that carry low interest rates.

''This particular loan had a high interest rate ... In negotiations we may not get the interest back, but I do want to make sure we get the principal payment,'' Merlitte said.

In its most recent communications, Brennan's company has told city officials that the hotel is for sale, but would not release the asking price.