The planning board voted 4-4 on Wednesday night, effectively denying a recommendation to deem the site "in need of rehabilitation."
The vote was a crucial step to advance the project because of current zoning restrictions, but city council members could have the final say.
"The development on that side is not dead, but this designation for right now has not been afforded to the development," said Councilman Sean Barnes.
"Either way, if we said as the planning board yes or no, either way it still goes back to council and council can make our own decision," added Barnes, who also serves on the planning board.
There is a council meeting scheduled for Thursday night, but Barnes said the Wonderland Pier project is not on the agenda.
Developer Eustace Mita, who purchased the property in 2021, has proposed building a 252-room luxury hotel called "Icona in Wonderland." He has said he would preserve the Ferris wheel and carousel, but the plan has faced resistance.
Gillian's Wonderland was a fixture on the boardwalk before it closed in 2024 after 94 years in operation.