A Michigan-based company has made its most definitive threat yet to sue the city if it approves intersection improvements to make way for a Home Depot store on the northeast corner of 31st and Iowa streets.

“If the city goes along with the proposal … we at Malan will have no choice but to challenge such action in court,” Malan Realty’s president, Al Warnke, said in a letter to city commissioners.

Malan owns the land on the intersection’s southeast corner that includes Kmart, IHOP and several other retail chains. Warnke said the current plans curtail access to its property and, because it gives Home Depot extensive control over the intersection improvements, is unfair to taxpayers.

The letter came amid signs that city support for the intersection project is wavering.

City commissioners on Tuesday will be asked to approve the intersection improvements.

Commissioner Sue Hack was part of the slim 3-2 majority that last fall approved Home Depot’s preliminary development plan. Wednesday, she said that Malan’s threat  and the rising costs of intersection improvements  was heightening her concerns about the project.

“It’s complicated,” she said. “It would be nice if it came to us cleaner than this.”

The latest estimate is that the improvements, including double left-turn lanes on each approach, will cost $3,269,571. Home Depot would pay $1,492,235. The city would pay $1,477,336. The state would kick in an additional $300,000.

That exceeds the nearly $2.2 million estimate developers had last fall, with city taxpayers picking up $300,000 more than originally expected.

City Manager Mike Wildgen in the fall asked commissioners to put a cap on city expenses for the project. They didn’t. Hack said Wednesday that was a mistake.

“I learned a lesson,” she said. “I think it’s costing more than we thought it would cost.”

Capping expenses now, Hack said, would partially ease her concerns. Commissioner Jim Henry, another member of last fall’s majority, also has expressed interest in a cap.

Hack said she also was interested in knowing if the project could be reoriented to face Iowa instead of 31st; First National Development, which owns the Home Depot property, has an option to purchase the adjacent land along Iowa.

And Malan’s problems should be resolved, Hack said.

“I can certainly understand their concerns,” she said. “I want to make sure the situation can be resolved without going to court.”

Those concerns include:

l Eliminating an entrance where supply trucks (and,possibly,emergency vehicles) enter;

l The possible condemnation of some Malan property to make room for the intersection improvements;

l Home Depot’s request to be the contractor on the intersection, something city officials have said is an unusual level of private control for a city project.

Dan Watkins, First National and Home Depot’s Lawrence attorney, was unavailable for comment. The commission will consider the matter at 6:45 p.m. Tuesday at City Hall, Sixth and Massachusetts streets.