NIAGARA FALLS – Two downtown development projects announced last year have been stalled for months but will move ahead later this year, their developers said last week.

Both projects would bring much-needed food options to the downtown tourism corridor, especially for families traveling through the city or staying in its hotels.

City and state leaders last week extended funding assistance to Faisal Merani, who plans a local or chain restaurant in the Holiday Inn near the falls, and Steve Masik, who plans a Subway on Niagara Street near the Seneca Niagara Casino & Hotel.

Merani has planned a restaurant in the Holiday Inn since his family purchased the Buffalo Avenue hotel in 2005. He has put $5 million into a hotel renovation that began in 2008, and he says an 8,000-square-foot restaurant is the next step.

“We’ve seen a steady increase of tourists every year, and we’re happy to be part of the growth,” he said last week.

Merani is one of a few recent Canadian developers who have built successful high-rise hotels in Niagara Falls, Ont.

Like the others, he is turning his focus to the American side, which experts say is smattered with budget hotels in need of upgrades.

The city’s economic development arm and the state’s USA Niagara Development Corp. each gave Merani $550,000 toward the Holiday Inn restaurant project, and he also received a 10-year PILOT agreement from the county’s economic development plan.

But a slow economy stalled his plans to add the restaurant last year, he said.

Merani added an upscale Italian restaurant to his Four Points by Sheraton hotel, which he refurbished on Buffalo Avenue in LaSalle.

He said he’s still committed to doing the same at the Holiday Inn – as soon as he finds a willing local or chain restaurant partner.

It would be a welcome addition to downtown, city officials said, before granting Merani an extension on the grant that would run through June 2014.

“Some very positive things are going on in that neighborhood, and we would very much look forward to building on that,” Mayor Paul A. Dyster said, referring to the recently opened culinary institute and anticipated hotel development across the street.

“We look forward to [you] putting a shovel in the ground when the weather breaks,” Dyster told Merani.

City development board members were unanimous in granting Merani the extension, but they debated the merits of a grant extension for the Subway project.

Masic, of Lewiston, said last year he planned to build the restaurant on a Niagara Street strip of closed storefronts. His Players sports bar and the Niagara Gazette are the only remaining tenants of the once-vibrant stretch.

Masic also planned to refurbish the upper two floors of the building adjacent to Players, at 326 Niagara St., with the Subway restaurant on the ground floor. The city and state each gave him $50,000 for the project. But an inability to get the desired bank financing for the project has caused Masic to scale back his plans and focus exclusively on the restaurant.

Three board members opposed giving Masic the full grant for the scaled-back project, but he said he would not be able to proceed with the project without the funds. The board approved the grant extension for the $334,000 project by a 7-3 vote.

Masic said he expects to begin construction on the restaurant soon and plans to open this summer.