Lexington officials shut down work again at future Two Keys site on South Upper
Work has stopped again at the future site of Two Keys Tavern after city officials found construction had started on a fence and the interior, but the contractor and owner did not have the correct permits.
A city inspector visited the site at 503 S. Upper St. on Tuesday and found work had begun on the building’s interior and posts had been set for a fence, said Susan Straub, a spokeswoman for the city. Permits have not been issued for that work, she said.
Carlo Vaccarezza, the owner, said he hopes to have the permit for the fence he is building on the property by Wednesday so work can resume.
Vaccarezza said he is trying to work with city officials to determine what work can begin. Straub said city officials will return to the site on Wednesday.
“We are trying to work it out,” Vaccarezza said.
This is not the first time there have been concerns about work starting at the location, which has been a pizza restaurant and was formerly Mellow Mushroom. On March 17, city officials told Vaccarezza he needed appropriate city sign-offs to begin construction on the parking lot, and ordered work to stop.
Vaccarezza said March 17 the parking lot was in poor condition and he was repairing the lot, not starting construction on a proposed outdoor patio.
Vaccarezza announced in late February he was teaming up with Seth Bennett to relaunch Two Keys Tavern. 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, he said.
However, neighbors have raised concerns about the plans, saying Vaccarezza and Two Keys must get a conditional use permit to have indoor live music.
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The building is surrounded on three sides by homes.
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 Association, said if a conditional use permit is filed — which is required in that zone for live music because the building is within 100 feet of a residence — the neighborhood would 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 March 17. “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.”
Two Keys’ quest for a 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 24, 2026 at 4:01 PM.
