In the temporal study of faint, extended sources at high resolving power, Spatial Heterodyne Spectrometer (SHS) can offer significant advantages about conventional dispersive grating spectrometers. We describe here a four-year continuous progress in Mt. Hamilton, Lick Observatory, toward development of a prototype reflective Spacial Heterodyne Spectrometer, Khayyam, instrument-telescope configuration to combine all of the capabilities necessary to obtain high resolving power visible band spectra of diffuse targets from small aperture on-axis telescopes where significant observing time can be obtained. We will discuss the design considerations going into this new system, installation, testing of the interferometer-telescope combination, the technical challenges and procedures moving forward.