Owensboro officials are preparing to take action Tuesday to acquire the long-vacant property at 3001 KY 54, formerly home to the Owensboro Day Treatment campus. City Manager Nate Pagan said the plan is to immediately sell the property to a private developer for demolition and commercial redevelopment.
The site once housed a program for at-risk youth ages 12-17, operated by the Kentucky Department of Juvenile Justice. That campus was closed in 2020 when the state shifted services to other facilities, leaving the KY 54 property idle and eventually abandoned.
Since then, the buildings have fallen into severe disrepair. When the Owensboro Times visited the site in April, windows and doors were shattered, ceilings had collapsed with insulation hanging down, furniture was broken, clothing was scattered across rooms, and shopping carts were strewn throughout the complex. While individuals who are homeless have used the buildings, there were no visible signs of drug use at that time.
Pagan said the property has become a repeated concern for police and fire crews.
“It’s been vacant for several years, and it’s become a public safety problem for us and a public nuisance. OPD is there often. OFD is actually there on a fairly regular basis as well,” Pagan said. “People break in, start fires, or have medical issues there. The aesthetics look terrible, so it’s something we were hearing complaints about and something the elected officials prioritized to get taken care of.”
Under the proposal that will be presented at Tuesday’s City Commission meeting, the City will pay the state the appraised value of $3.3 million to acquire the property, then immediately sell the nearly 14.2 acres to 54 Grand LLC for the same amount, resulting in no net cost to the City. Pagan said the firm is obligated to demolish the structures within 6 months and pursue redevelopment.
“This is just to pass through. We’re not at any cost. We’re getting fully reimbursed, so we have no net cost to the City for our involvement — just facilitating the process much more quickly and getting the public safety concerns addressed,” Pagan said.
Pagan said 54 Grand LLC previously submitted the high bid when the state attempted to sell the site in 2019. He added that the group agreed to match the City’s purchase price this time around and move forward with clearing the site. The municipal order also declares the property surplus and authorizes its transfer to the company.
In a separate order being presented Tuesday, commissioners will consider an incentive agreement with 54 Grand LLC providing a 5-year, 75% rebate on certain City tax revenues generated by the development, excluding school taxes. The deal requires the developer to begin work within 48 months and document at least $50 million in capital expenditures to extend the incentive period up to 7 years.
Pagan said that because the property was owned by the state, it first had to go through the state’s surplus property process. That process requires government agencies — such as cities, counties, or other state departments — to have the first opportunity to claim the site before it can be offered for private sale.
He said City leaders decided to step in at that stage to speed things up. By purchasing it directly, Pagan said the City was able to acquire it and immediately resell it to a developer instead of waiting for the full bidding process to play out.
He added that the ultimate goal is both public safety and economic development.
“We wanted to get this public safety issue addressed and get the site cleaned up, and then we’re really looking to get it developed in the quickest and easiest way,” he said. “It’s a very, very good site for economic development.”
