The funds are set. The city is ready. But one thing stands in the way of the largest private development New Haven has ever seen: a tax exemption.

Last Friday, Fairfield-based developer Becker + Becker Associates secured the over $150 million in funds it needs to begin construction on the State Street lot of the former Shartenberg department store, the firm’s attorney wrote in a e-mail to the New Haven Independent this week. Although the e-mail indicated that site preparation could start this week, though, the company says it still lacks a $3.2-million tax exemption “necessary” to begin construction. The head of the Connecticut Development Authority — an agency that provides debt financing and investment capital to encourage business growth in Connecticut — said that members are working in “due diligence” to decide upon Becker & Becker’s application and city officials said they hope the state will approve the tax aid.

But the state board may not decide on this issue until its next official meeting next month.

The “360 State Street” development, which will feature a 32-story residential tower, ground-level retail space, a 21,000-square-foot terrace and a 500-car parking garage, will be funded through private financing from a “union pension fund” called Kennedy Associates, Becker + Becker attorney Sara Bronin wrote in a Sunday e-mail to the Independent. The firm’s construction manager will be the Boston-based Suffolk Construction Company, the e-mail said.

Becker + Becker applied Wednesday for a state tax exemption from CDA. The tax exemption is granted to “mixed-use, job-creating projects,” according to Bronin’s e-mail.

At its monthly meeting Wednesday, the CDA did not make any motions on Becker + Becker’s request for the exemption.

CDA President Marie O’Brien told the New Haven Register on Thursday that the members of the CDA need more time to consider the request and will work in “due diligence.”

She added that all developments that receive the tax exemption must be “competitive” — which means that the development will expand or retain businesses, relocate businesses or bring jobs to the state — and show financial strength.

According to city officials, the former Shartenberg site can potentially create about 500 jobs and $1 million in retail sales and payroll taxes.

O’Brien, CDA Executive Director Antonio Roberto, CDA Business Development/Government Relations Senior Manager Lori Granato and CDA Marketing/Communications Director Melanie Kriedel could not be reached at their home phones Thursday night.

In a letter to the CDA, Becker + Becker President Bruce Becker stressed that the tax exemption is “necessary” to attain “prior to beginning the construction process.”

Representatives from Becker + Becker declined to comment for this article.

The firm has run across several obstacles in its development of the Shartenberg site, where Becker + Becker fumbled at first to secure a date to start construction.

In June, two months after the original construction manager Fusco Corporation started preparation work for the Shartenberg project, Fusco left the position, leaving a hole Becker + Becker officials scrambled to fill. The developer then began negotiations with Suffolk.

Suffolk Vice President of Marketing Andrea Bruce deferred comment to Director of Communications Dan Antonelis, who did not return a request for comment this week.

Becker & Becker also submitted a new set of project plans in July to cut construction costs. The new design underwent a slew of changes, including a drop from 36 stories for the “360 State Street” tower to 32. The price of construction also rose from an expected $165 million to $186 million , according to Becker’s letter to the CDA.

According to Bronin’s e-mail, Suffolk has also fully signed on to complete all construction activities for the site.

She added that the company was talking with the city about starting construction and beginning “site preparations” this week. But Wednesday’s meeting threw a wrench into the plan.

City officials said they support Becker & Becker’s hopes of receiving a tax exemption.

“There’s been a great deal of time and effort and money spent on this … project,” City Hall spokeswoman Jessica Mayorga said on Thursday. “And we feel that this is definitely a project appropriate for this tax exemption.”

The Shartenberg mall had stood on the site — formed by the intersections of Chapel, Orange and State streets — until the 1960s. Since then, the city had not been able to attract a viable developer to rework the site, worth $2.3 million, until Becker & Becker came around.

Becker & Becker has developed many sites in the northeast, the most famous and award-winning site being The Times Square building — a mixed-use facility in Times Square —in New York City.

—Margy Slattery contributed reporting.