A new obstacle to Foxwoods Casino's move into the old Strawbridge's building emerged yesterday at a City Council hearing - an opponent so significant that members postponed a zoning vote on the project.

In a terse statement, Joshua Cohen, a lawyer for Gramercy Capital Corp., described the property at 801 Market St. as a "business condominium" and said his client owns the top six floors of the 13-story building.

Gramercy opposes the casino zoning designation, Cohen told Council, saying it "would not be in our best interest."

The Foxwoods partnership has been negotiating for months with the Pennsylvania Real Estate Investment Trust for a lease to open a slots parlor on two floors. But first the building must be zoned for a casino. Currently, that designation exists for the Gallery mall in Market Street East, from which Foxwoods wants to relocate the project.

"Contrary to what" PREIT purports, it does not "own" the entire building, Cohen said.

In a surprise turn, Council's Rules Committee decided not to vote until next week on shifting the casino zoning to the Strawbridge's site.

Councilman Frank DiCicco said he had learned of Gramercy's assertion just before yesterday's hearing, and had asked Foxwoods and PREIT to get together with Gramercy and report back to Council. Gramercy, he said, raised concerns that "may interfere with what they want to do."

Gramercy is a national real estate investment company with offices in Jenkintown. Its tenants at 801 Market St. include state government offices, the city's Community Behavioral Health office, and Citizens Bank.

Few specifics on Foxwoods' plans for the Strawbridge's site were offered yesterday.

At the start of testimony, Joseph Coradino, a PREIT president, said negotiations with Foxwoods over the historic building were ongoing.

"We're hopeful that a transaction can be concluded," he said, "but one is not at this point."

He made no mention of Gramercy Capital.

In September, Foxwoods said it would consider moving its casino from the Delaware River in South Philadelphia to the Gallery. Now the developers view Strawbridge's as the better option.

The two sides have reached agreement on economic terms of a lease, but are still working on the details of the "gaming partnership," Coradino said. "We have scheduled meetings over the next week."

Foxwoods needs the new zoning for Strawbridge's before it can ask the Pennsylvania Gaming Control Board to move its site off the waterfront. Under terms of its license, Foxwoods was supposed to have 1,500 slot machines operating by May 29. It also must ask the board for an extension of that license.

Foxwoods was formed in 2005 as a partnership between local investors and the Mashantucket Pequot tribe, which runs the Foxwoods mega-casino in Connecticut.

But the tribe's role has receded as the other partners have taken on more financial responsibility.

Given the tight credit markets, the original local investors have been asked to contribute more money so the relocation can proceed, said Brian Ford, chief executive for a partnership representing the major local investors.

"We said we need for you to step up," he said. "We have financing commitments sufficient to do what we need to do."

The main local investors include three charitable trusts for the families of Comcast-Spectacor chairman Ed Snider, entrepreneur Lewis Katz, and developer Ron Rubin, also PREIT's chairman.

Ford said 42 percent of the casino profits would go to the three charitable trusts.

The move to Strawbridge's would require the renovation of two floors - a far simpler design than once envisioned for the waterfront, where a hotel, sprawling casino, and parking garage were planned.

If city and state approvals come through, Foxwoods could have a casino with 3,000 slots open by "early next year," Ford said. He did not disclose the cost of the renovations but said "the ranges are comfortable for our financing."

Though it put off the zoning decision, Council voted to give the city Planning Commission the authority to finalize a plan of development.

A half-dozen neighborhood groups testified against a downtown casino.

George Moy, a longtime resident of Chinatown, where opposition to a neighboring Foxwoods casino runs high, complained that "there are no specific proposals, no drawings. . . . Yet we are expected to roll over and play dead."

Absent from the hearing were members of a broad faith-based and community coalition of casino opponents.

Ellen Somekawa, organizer of No Casino in the Heart of the City Coalition, explained, "We have chosen not to subject our people to the indignity of testifying at these proceedings, whose only intent is to steamroll through to a predetermined outcome."

Contact staff writer Jennifer Lin at 215-854-5659 or jlin@phillynews.com.