Demolition is now underway at the former Day Treatment campus on KY 54, marking the first visible step toward a large-scale commercial redevelopment at one of Owensboro’s busiest gateways.
The project is being led by 54 Grand LLC, a development group tied to the team behind Heartland Crossings, which includes Meijer, Menards, and several national restaurant chains. The long-vacant Day Treatment property sits adjacent to Gateway Commons but will be developed as a separate project.
As previously reported by the Owensboro Times, the City of Owensboro purchased the site from the state for $3.3 million and immediately resold it to 54 Grand LLC at the same price, resulting in no net cost to taxpayers. The arrangement included requirements for demolition and cleanup of the deteriorating structures.
City Manager Nate Pagan said the City recently granted a temporary access agreement to allow demolition to begin ahead of the January closing.
“We gave them an access easement to go ahead and get started,” Pagan said. “They wanted to get work initiated. Certainly, one of our primary motivations for being involved was to get that structure demoed and the site cleaned up. So we were happy to work together to accommodate that.”
Pagan said the agreement allows 54 Grand and its contractors to enter the property while the City still technically owns it, with the purchase scheduled to close in January.
Martin Walker of 54 Grand LLC said demolition began earlier this month and is moving quickly.
“We’ve hired a demo company to come in and take down the trees and the buildings, and we’re starting the process,” Walker said. “They should be down in about a month and a half. Everything should be down soon.”
Walker said all debris will be hauled off and that the early start reflects a shared desire by both the City and the developer to address the site’s condition.
“I think both sides wanted the property cleaned up and the buildings down,” he said.
While no tenants have been announced, Walker said his team has begun receiving inquiries and is moving into the early planning phase of the project.
“We’re still going through the engineering and layout phase,” Walker said. “We have to do the topography and the elevations, and then we’ll go through planning and zoning. We’ll have to do a traffic study, so there’s a lot of stuff to do before we can actually start the mass grading and try to get pads ready.”
Walker said the approval process is expected to take most of the year.
“I would think we’ll probably go through the approval stages all the way through the summer and then hopefully start the mass grading and get some pads ready by the end of the year,” he said. “Then hopefully have some tenants lined up where we can start going up with some buildings in 2027.”
He said the site is being designed with flexibility in mind, allowing potential tenants to shape the final layout.
“At this stage, we’re open-minded,” Walker said. “We have multiple layouts, but again, the tenants will drive that.”
Walker said the location is well-suited for national brands and a mix of retail and restaurant uses.
“It’s the entrance to Gateway back there,” he said. “It’s next to Walmart and Chick-fil-A, so hopefully it will attract national brands.”
Access to the site will come primarily from Hayden Road, with additional connections planned through the roadway in front of Walmart and a shared access point through Chick-fil-A’s parking lot.
“We’re working with Chick-fil-A on making sure the way we design it works well for both sides,” Walker said. “Chick-fil-A’s been very supportive.”
Walker said his group has also made a point to communicate with neighboring businesses as plans move forward.
“We’re just trying to be good neighbors to everybody around us,” he said. “Everybody that I’ve spoken with wants to see something nice go in there and utilize the property to its best ability.”
Walker said the team remains focused on moving as aggressively as possible while navigating the required approvals.
“We’re excited,” he said. “We’re trying to move as quickly as possible, but these things take a little bit of time.”
