The Attorney General's office has ruled that the Blue Grass Area Development District is not a state agency and, therefore, has to follow local zoning regulations.

The Area Development District bought the old Excepticon property, 1393 Trent Boulevard, with the intention of developing the 6.6-acre campus into a work-training program for ex-felons.

The project was strongly opposed by the River Park Neighborhood Association; residents charged that the development district has not been transparent about its plans or forthcoming with answers to neighbors' questions.

The neighborhood association, in partnership with the city and Rep. Susan Westrom, D-Lexington, asked Attorney General Jack Conway for an expedited opinion on whether the Blue Grass Area Development District was an agency of state government when it came to complying with local planning and zoning laws.

The neighbors also asked whether an area development district had authority to operate an ex-offender re-entry program.

In an opinion dated March 8, the Attorney General said, "The area development district is not, strictly speaking, an agency of the state; but it is a political subdivision and a unit of local government."

Citing Kentucky Revised Statutes, the opinion said state law empowered an area development district only to engage in "program development," to do research, planning and administrative work.

A district does not have authority "to implement or directly operate" an offender re-entry program. It could get involved only if a local government requested its help through a memorandum of agreement.

Charles Payne, president of the River Park Neighborhood Association, sent neighborhood members an email Monday thanking them for their efforts to stop the program from being established in their neighborhood.

Council member George Myers, who represents the area, said in an email to neighbor, "The opinion could not have been any better for neighborhoods and local governments across the state if we had written ourselves."

Attorney Dodd Dixon, spokesman for the Blue Grass Area Development District board, said Monday that he had not yet received a copy of the opinion and could not comment.

However, Dixon said board had put the Excepticon property up for sale."That was a genuine response, to sell the property and not administer a program at that site," he said.

If the property sells, the development district will look for another site somewhere in its 17-county area for the felon re-entry program, Dixon said. "We are still committed to assisting local governments with the former-felon population. It is a huge problem that needs to be addressed," he said.

The property, with eight buildings, is on the market for $1,170,000. Several potential buyers have looked at the property, real estate broker Ken Silvestri said. All were interested in rehabbing the buildings as market-rate apartments.

Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010.