The Downtown Redevelopment Authority is taking the next step toward getting 601 State St. leased.

The historic, former auto dealership building was the site of a news conference this week featuring Gov. Steve Beshear announcing preservation tax credits.

Tax credits could be used to finish restoration of the building, according to Cheryl Blaine, DRA director.

“Right now, we have it for lease and have had several prospects,” Blaine said. “But we need to get a building assessment to see realistically what has to be spent to make the building workable because those are some of the questions that people have.”

Blaine said the Chapter 58 corporation for downtown redevelopment has planned all along to lease the space.

“But they can’t do that until their bonds are released,” Blaine said. “So they know we are going to go ahead and lease it if we can.”

DRA member Jim Bullington said an architecture firm that has been working with Western Kentucky University is going to do the evaluation for a bargain $3,500.

“They did a walk-through and agreed to do an assessment of what it would take to get the building ready to lease,” Bullington said. “We expect to have that just in the next few weeks. At that point, we have one tenant (seriously) interested in the building and will pass the information on to them. It’s an existing (retail) business that would move from another location, so for now they have asked us not to disclose who they are.”

Bullington said the retailer would use part of the space for store front and part for storage.

“We are still going to occupy a portion of it,” Bullington said. “And if they take it, there won’t be room for a restaurant.”

Bullington said DRA has talked to several potential restaurants but they all thought the building would cost too much to retrofit.

“Right now we feel pretty good about what’s been done so far … ,” he said. “In the front part we have all new electric, heat and air and a drop ceiling, so it’s close to being ready to be occupied for retail. But if a restaurant wanted to locate there you would have to add more heat and air capacity and have to put in a hood for the kitchen that would mean piercing the roof.

“Still, we’d love to have a restaurant there and feel like if Butch Hutcherson builds his building, there would be one,” Bullington said. “We are crossing our fingers that he can go ahead with his project.”

Hutcherson, a Tennessee developer, is planning a mixed residential and retail space on State Street across from Circus Square. At last discussion, Hutcherson thought he would begin building by early fall, Bullington said.

Blaine said the overriding goal for the DRA was to save the building. The added goal was that jobs would be provided by developing the 17,000 square-foot-space.

Once the evaluation is in for what work is needed, it’s possible that an interested tenant could perform the work, with the DRA helping them get the tax credits touted by the governor, or the DRA may look for more grant money.

So far, the city spent about $300,000 to purchase the building, with the hopes that DRA could become self-sustaining. About $250,000 has been spent on its renovation. About $1 million more was spent on land acquisition surrounding the building.

“The goal would be to get the building leased out in the next three to six months,” Blaine said. “People have been hesitant about starting or moving a business here, but the biggest drawback, we think, has been not knowing what still has to be done with the building.”