ST. CHARLES — The City Council on Tuesday night authorized starting negotiations toward a possible subsidy for a mammoth residential and commercial project along the Missouri River south of Interstate 70.

The council voted 9-0 to designate Michael Sellenschuetter's Riverwalk Development LLC as the developer and to begin financing talks.

The firm has submitted documents referring to a possible $125 million tax-increment financing plan for the project, Harbor San Carlos. However, the firm says the actual amount sought likely will be far less.

Company officials emphasize that they first will try to get some of the $125 million from other sources, such as the Army Corps of Engineers and federal economic stimulus funds.

Getting the city endorsement, Sellenschuetter said, puts him in better position to negotiate with the corps and other agencies, and with equity investors needed to finance the $1.3 billion project.

He called it "an exciting plan that we think will have not only a regional draw but a national draw."

The council's action came despite complaints from some people about Sellenschuetter's record developing subdivisions in the St. Charles area. The critics alleged that he had failed to complete some projects and hadn't paid some contractors.

"It's unconscionable that he would be considered for something of this magnitude," said Tom Kobylarer, treasurer of the homeowners association at Whispering Oaks, a subdivision developed by another firm of which Sellenschuetter is part.

Sellenschuetter in an interview said he, like many developers, has struggled financially during the recession and that he intended to complete projects he's still involved with. He said he has ongoing disputes, some in court, over bills filed by some subcontractors.

Any public money assigned to Harbor San Carlos would be used for items such as dredging a canal for pleasure boaters between the river shore and Bangert Island and building a riverside walkway.

The 300-acre, $1.3 billion project was unveiled in 2006 as a unique use of the riverfront between I-70 and the Family Arena. Plans call for a hotel, a marina and a string of riverfront buildings with condos, apartments, restaurants, bars and stores.

The island, which last year became a St. Charles County park, would be linked to the riverfront by two small bridges for pedestrians and bicyclists.

Because the island in recent years has been cut off from land only during high-water periods, dredging is needed to carve the canal. The overall project area is in an unincorporated area and would require annexation by the city.

Council members stressed that the resolution approved Tuesday does not commit the city to any subsidy at this point. If tax-increment financing eventually is involved, some new tax money generated by the project would cover the cost of related improvements. A $125 million TIF would be the biggest ever in the county.