ROCHESTER, N.Y. -- Rochester City Council shot down a proposed loan to a Morgan Management development already in progress along the Genesee River.

Work has already begun along the old subway entrance to prepare the site for the Court Street Apartments. 

By a five-to-three vote city council rejected a proposed $500,000 loan for construction and permanent financing for the residential part of the project. 

This comes after the Buffalo News reported other companies owned by developer Robert Morgan were under investigation by the FBI, focused on how Morgan Communities secured loans when financing purchases in the Buffalo area. 

There's no word yet how the vote will impact the Court Street Apartments project.