The developers of Museum Plaza are pulling the plug on the $490 million, 703 feet tall skyscraper project that was to have transformed Louisville's skyline, WHAS11 News has learned.
The continued inability to secure financing ultimately killed the project, according to a letter from one of the developers, Craig Greenberg, to Kentucky Governor Steve Beshear and Louisville Mayor Greg Fischer.
"... we are ending our efforts to build Museum Plaza," Greenberg writes in the letter dated August 1, "As you well know, the economy changed drastically since we began this project and, as a result, putting together a sensible financing package has not been possible."
Mayor Greg Fischer also issued a commne thanked the developers saying, "The timing and the uproar in the financial markets have unfortunately derailed Museum Plaza and, although the building will not grace our skyline, the creativity and the willingness of the development team have inspired others in Louisville to think big and think bold."
Despite the down economy, the project had grown in size and cost since it was first proposed in 2006 and after its groundbreaking in 2007.
The proposed skyscraper was distinguished by its avant garde design, which had elicited both praise from those excited for Louisville to be seen as modern and progressive, and criticism from others who believed the building was out of proportion and inconsistent with the Ohio River city.
The city and state had agreed to chip in up to $150 million for infrastructure improvements around the project. A $100 million HUD loan had won the endorsement of the HUD Secretary and was backed up by a personal guarantee from developer Laura Lee Brown, who staked her private fortune on the project.
Developers are said to have invested more than $50 million.
Yet, the remainder of the cost had to be privately financed, an effort frozen by the national credit crisis and recession.
In Monday's formal notification to the state, Greenberg said Kentucky should withdraw the pending loan application to HUD.
"Through this process we have endured four years of the worst recession of our lifetime and the most challenging lending market ever," reads a statement from the development team, "There are no signs of improvement in the near future."
The team added that a completed financing team had seemed "within reach."
Museum Plaza was to have included about 150 condominiums, a Westin hotel and an additional hotel, an art museum, art space for the University of Louisville, retail businesses and 300,000 square feet of class A office space.
The death of the project delivers a blow to the city's and state's employment hopes as Kentucky endures a 9.6 percent unemployment rate.
It was estimated that Museum Plaza would create 4,500 construction jobs. More than 2300 people were expected to work there once it was complete. It would have been the tallest building in Kentucky and several surrounding states.
The decision also means that the development team of Greenberg, Brown, Steve Wilson and Steve Poe is terminating its development agreement with the city.
Greenberg's letter states that the team plans to restore 7th Street between Washington Street and River Road so that it can be reopened. It is expected that land adjacent to the Muhammad Ali Center that was to have been a part of the Museum Plaza project will revert back to the city.
Despite the decision not to build Museum Plaza, the developers' past investment in preparing the city property for construction leaves behind a site that has been primed for development.
The Museum Plaza team spent $15 million to both remove a 10 story electrical transmission tower that had marred the skyline and to reroute underground transmission duct banks. The team also paid to restore four historic city-owned facades in the 600 block of Main Street.
Construction was brought to a halt in 2008 after neighbors in 19th century buildings complained about vibrations from drilling for huge concrete pillars ten feet into solid bedrock.
In February 2010, four years after the initial annoucement, Greenberg acknowledged doubts whether Museum Plaza would ever be built, yet added that the recession had driven down the construction costs.
"Now is the perfect time to start building Museum Plaza," Greenberg said in February, 2010, "The construction industry is hungry for work, commodities prices are down and so it's really a unique time right now at very favorable prices."
At one time, the project's economic impact was projected at $900 million.
The development team pledged to continue working with the city on other urban revitalization projects. The team has previously developed the 21C Museum hotel and recently stepped forward to save the historic "Iron Quarter" facades of seven East Main Street buildings on Whiskey Row.
"An iconic building will not be built," reads the offical statement from the team,"but we hope that we have laid the foundation for ourselves and others to realize the aspirations we pursued."