"It has been over a year since Saul Holdings LP settled a lengthy court battle with Home Depot, clearing the way for the 315,000-square-foot former Lexington Mall to be redeveloped. The mall's last tenant, Dillard's, closed in September 2005, and there has been little or no visible activity at the site since.
"They said at the time of the settlement that they were going to further the development, but nothing has happened," said Julian Beard, director of the Mayor's Office of Economic Development.
Beard said that there have been inquiries by what he termed "three high-profile, national developers" to his office regarding the site. One developer whom he declined to name, citing confidentiality, wanted to turn the 30-acre property into a "lifestyle center," incorporating restaurants, entertainment venues and peripheral parking, in the style of Louisville's Fourth Street Live or Northern Kentucky's Newport-on-the-Levee. Beard indicated he was intrigued by the plan.
"If it becomes a lifestyle center, with patio cafes and live music venues, it becomes a destination for things other than shopping. You mix that in, and it becomes golden. And then the shops would come. The demographics around there would be golden for high-end shopping."
But according to Beard, the lifestyle center ultimately became pie in the sky. "We referred [the developer] on to Saul, and (Saul) refused to talk to them."
The east wing of the mall was demolished last September, but the opening was immediately walled, and there has been little movement since. The area was fenced off in July. There have been no announcements of any further scheduled demolition.
A news release from Saul Centers, Inc., a subsidiary of Saul Holdings LP, dated September 29, 2005, stated that the firm had, "engaged land planners and assembled a team to proceed with conceptual designs." Calls to Saul Centers' Chief Financial Officer Scott Schneider, listed as the group's direct contact regarding the status of the project, were not returned. Saul Holdings LP's Vice President Chris Netter declined via the company's Lexington counsel to comment on the site's status.
"You hear rumors," said Beard. "Nothing definitive. These people are not communicative at all. Saul doesn't call us up and tell us anything. We get everything from the newspaper."
It is somewhat frustrating to city management, Beard said, because they feel they can't do anything more than hope Saul Holdings will eventually do something with the property.
Asked whether the US Supreme Court's 2006 decision to allow local governments the power of using eminent domain for private development could apply in Lexington Mall's case, Beard was cautiously dismissive.
"The Council may want to move more quickly. They certainly have the power to do it." But, he said, "It's not quite that simplistic. [Condemnation is] extremely unpopular. It's not a blighted area. There's no health danger. It would hang every local politician involved. We can't get into doing private sector business."
Inquiries to Lexington legal firms regarding the use of condemnation in such a case were inconclusive. Few lawyers feel comfortable positing in such a matter, said Kristen Goble of Frost Brown Todd, because it is right now a poorly defined area in law. "Eminent domain is a very specific niche. There is a pending case in the Western District, and it's continually changing. It could change tomorrow."
So what can the city do?
"Not a thing," Beard said. LFUCG could take action if "at some point, the roof caves in, or it starts spawning rats." Until that happens, condemnation is an unlikely scenario.
"There's no immediate benefit. It's an expensive proposition, and we wouldn't know what to do with it once we got it. The [condemnation effort against RWE] is a different situation. You can't go slap a coat of paint on water and make it better."
Beard was asked if the mall's crumbling parking lot and proximity to Lexington's main reservoir might constitute an environmental hazard.
"If there were, we'd be hearing squeals from the water company. We haven't heard a peep from them."
In the meantime, Lexington Mall, its current ownership and any plan in the works remain shrouded in mystery, and neighbors deal with a useless eyesore. Beard said he doesn't know of any significant legal, financial or zoning obstacles standing in the way of redevelopment. Any zoning issues pertaining to the site would immediately receive high priority attention from the city, if Saul Holdings would only communicate its needs or wants.
"We want in the worst way to do something positive with that property," he said. "At this point, it's probably paid for. The only drag on it would be the taxes. It's an awful big footprint out there to do something with. But it could be done as a mixed-use development with condos and rentals, or as a lifestyle center, or whatever they want to do."
"We still have to have the private sector," Beard stated. "Our situation [in the initial purchase deal] was to be a cheerleader. Beyond that, we haven't pressed them. The first time you call, you're curious. The second time, you become adversarial. We don't want to get adversarial with them. They say they want to redevelop it; we have to take them at their word and hope there is a profit motive for them to develop it."
Still, he said, "we might be getting to that threshold where we make a call. It really needs to be cleaned up. People don't want to look at it."