An unfinished portion of The 500s on Main, a prominent development in downtown Lexington that has become a boarded-up eyesore, has been taken over by the lender.
Citizens National Bank of Paintsville hopes to sell phase two of the complex of condominiums and retail space at West Main and Algonquin Streets, which includes 16 condo units, 32 parking spaces and first-floor retail space.
A Lexington Realtor said he has a client who wants to finish the project and has made an offer to the bank.
Work stopped on phase two of the project in 2009.
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Phase one included more than 30 condos and commercial space on the street level. Much of it is occupied.
Recent steps by Citizens National to take ownership of phase two were part of a series of setbacks for the much heralded project, which drew attention to the west end of downtown when the first condos opened in 2007. The complex is also the home of The Penguin Dueling Piano Bar.
In a lawsuit filed in Fayette Circuit Court last year, Citizens National Bank officials said they were owed about $1.3 million for phase two of the project by Schneider Designs, the group that developed the property.
J. Edward "Butch" Schneider is the organizer of The 500s on Main and president of Schneider Designs, according to court papers.
The attorney representing Schneider Designs did not return phone calls seeking comment.
Glenda Mazurka, who owns an apartment building and a commercial building adjoining The 500s on Main, said dealing with the on-again, off-again project "has been a total nightmare."
"The condition it has been kept in is unbelievable," she said. Sections of construction fence were piled helter-skelter on the Main Street sidewalk in front of the boarded-up building Wednesday.
The boarded-up building is directly across Main Street from Lexington Center. Bill Owen, president of the center, said he would like to see it completed.
"We have a number of conventions that come back on alternate years, like the Kentucky Bar Association," Owen said. "The same attendees come back and see it in the same incomplete condition. ... It would give a much more favorable impression of being in the neighborhood if it would be completed."
Craig Hays, one of the owners of the Penguin bar, which is in phase one of the project, said his business is destination-driven and not heavily dependent on casual foot traffic to be successful.
Still, he said, "being next to vacant property hasn't helped our business. It's hard to say how much it has hurt us. I couldn't say because we don't know anything different."
Dewey Crowe, the city's director of building inspection, said his office has an active building permit for phase two, even though once a project stalls for six months, his office normally voids the permit unless the developer makes a special request.
Crowe said he would ask the inspector in charge of the project to visit it and "nail down what is going on down there."
Tyce McCullough, a Realtor with Rector Hayden, said Wednesday he represented a client who had made an offer to the bank for phase two, in addition to the four condos at 510 West Short St, which are a separate part of the project.
"We are working with the bank on it right now," he said.
The same client, whom he declined to name, bought seven condos and a portion of unfinished retail space in phase one last year, then became interested in phase two, he said.
Resolving the liens and lawsuits that have tied up the property has taken considerable time, McCullough said, adding that he was hopeful that his client might hear from the bank within the next week or so.
"It's a good location. It's just had a black eye for a while," McCullough said. "My guys will go in and really do a nice job getting those 20 units finished out. They're going to put some money in it. It's going to take money to finish it out."