A North Carolina city is returning a $500,000 grant to the state because a planned hotel renovation has been delayed for too long.

Local media sources report Elizabeth City was to use the state grant to help with the $13 million renovation of the Southern Hotel, which was built in 1872. City Manager Rich Olson announced the city's plans to return the money this week.

Outer Banks developer SAGA Construction announced plans two years ago to restore the four-story landmark, which was one of the largest hotels in the state when it was built. But Olson said the developer couldn't get the financing needed to begin work.

Olson said the restoration isn't dead, noting that SAGA has committed to revamping the hotel and still has the city's support.