New Lexington Two Keys location has no city-issued permits. Did work begin anyway?
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- City records show no permits issued for Two Keys renovation at 503 S. Upper St.
- Owner began site work and announced patio and live music
- Neighbors push back on live music, say conditional use permit needed
Lexington city officials and neighbors of a new location of the storied Two Keys Tavern are at odds over plans for the new South Upper Street location to host live music and whether it has the appropriate signoffs from the city.
Carlo Vaccarezza, the owner of the former Pollo Azul at 503. S. Upper St., said in late February he was teaming up with Seth Bennett to relaunch Two Keys Tavern at 503 S. Upper St. Vaccarezza said the plans for the relaunched bar, which has been a University of Kentucky mainstay for more than 66 years, include a new outdoor patio and live music.
Vaccarezza said in late February the new Two Keys Tavern should hopefully open in the spring.
Work began March 16 on the parking lot adjacent to the building, which has been a Mellow Mushroom and another pizza place in recent years.
Yet, city officials said the group has not had proper signoffs to begin work on the building. The group also needs a conditional use permit to host live music.
“Planning and building inspection have both talked to the applicant about permits and approvals needed,” said Susan Straub, a spokesperson for the city.
“If the applicant plans to change access and parking at the site, approval is needed from the Planning Commission before building inspection can issue a permit,” Straub said. “ No permit has been issued. A representative of building inspection stopped by the site last week to advise the applicant of their responsibilities, and will be there again tomorrow.”
Vaccarezza said March 16 they have filed a new site plan with the city, which is currently being reviewed.
Vaccarezza said the work that began Monday was to fix a crumbling parking lot, not to construct an outdoor patio.
“Only doing some light demolition and fixing the parking lot, that was in terrible shape,” Vaccarezza said.
Vaccarezza said he has not filed a conditional use permit to host live music at this time.
Neighbors raise alarm over live music
The group will need a conditional use permit if they want to host live music, city officials said.
“In addition, the applicant will need a conditional use permit and a variance from the Board of Adjustment to offer live entertainment in the B-1 zone, within 100 feet of a residential zone,” Straub said.
Many in the Historic South Hill Neighborhood, which surrounds the building, have raised repeated concerns about work done on the property and whether the Two Keys group has the necessary city permits and signoffs for a bar with live music.
Terry Lennie, president of the Historic South Hill Neighborhood, said if a conditional use permit is filed, the neighborhood will strongly oppose it.
“They are surrounded by residences on all sides, and actually share property lines on the south and west with residences,” Lennie said. “The only way they could have live music is to get a conditional use permit from the Board of Adjustment. The neighborhood association will strongly oppose their request.”
Neighbors said they are not only concerned about live music but also adding a patio to that parking lot, which will dramatically cut the limited number of parking spaces on the property. That will mean more cars parked on South Hill streets.
“We also strongly oppose the construction of a patio in the parking lot,” Lennie said. “Their plan threatens both the quality of life and property values of residents in the neighborhood.”
Vaccarezza said on Monday he was not aware of the objections from the neighbors.
He said that he has contacted Lennie and plans to meet to discuss the concerns of the South Hill neighbors. Vaccarezza said on Tuesday that he does not plan to have live music on the patio but would like to have music inside on occasion.
He said plans have not been filed for the patio, which will require city approval. Vaccarezza said he hopes that they can come up with something that will be positive for the local restaurant economy and the neighbors.
Two Keys struggles to find permanent home
Bennett owned Two Keys Tavern when it closed at 333 S. Limestone in the summer of 2020 after 66 years. The business went through Chapter 11 bankruptcy protection after pandemic-related shutdowns and revenue losses.
Three months later, Bennett reopened Two Keys down the block at 380 S. Limestone in the former Pazzo’s Pizza Pub space.
The original Two Keys Tavern space at 333 S. Limestone is now a bar called The Hill. The building, along with most of the rest of the block, was purchased last summer by developer Diversified Properties LLC.
This story was originally published March 17, 2026 at 5:00 AM.
