The University of Kentucky announced Wednesday that the South Hill Group of Lexington has been selected as the finalist for redevelopment of the Reynolds Building project on South Broadway.
The project entails redevelopment of the prime 6-acre site on the west side of campus and complete renovation of the Reynolds art building, which would be leased back to the university with the option to purchase it.
Negotiations, which are expected to take up to three months, will now begin between UK and South Hill Group to determine the details and design of the project.
The company's plan proposes also constructing a fine arts building, an honors dormitory, conference center with hotel rooms, retail space and residential units.
"We're at a very preliminary stage," said South Hill Group developer Bill Lear. "This is not a situation where the university says, 'We want everything you have proposed.' They have selected us as the preferred entity to negotiate with. So this is an important milestone in the process."
Bill Harris, university director of purchasing, concurred that selecting South Hill Group is just the first step. "If we don't get an agreement, we theoretically go back to another offer and begin negotiations with them."
However, he said the university is "very excited" about South Hill's conceptual plan. "Overall, they offered the best response with financial terms and scope of the project."
Lear called it "premature" to give more details or discuss a possible price tag for the development. "The number could vary significantly depending on whether the university wants to include all the components we proposed, and what magnitude," he said.
Financial incentives will be required, possibly tax increment financing, new market tax credits and historic building rehab tax credits.
The South Hill Group has a major presence in the South Hill neighborhood with its largest project, CenterCourt condominiums, across Bolivar Street from the Reynolds site.
An overall master development plan for the 6-acre site is one of UK's stipulations. It also will require a contract setting the purchase price of the property it is selling, as well as an agreement to lease back the Reynolds building with a purchase option.
At least eight parcels on the six acres are not owned by the university. "We are clearly aware that not all the property has been acquired," Harris said. "But we wanted to take the initiative, to be in a position to control what happens there and make sure it is in the best interest of the university. "
Harris declined say how many proposals were received. "Given we're so early in the process, any information I give could negatively affect our negotiating position in the future," he said.