When workers began demolishing a crumbling apartment complex in the heart of the Lake Vista subdivision in 2015, residents believed a long-running problem was finally coming to an end.

They feared the deteriorating red-brick buildings at the end of Wren Street were devaluing surrounding property in the high-demand lakefront neighborhood.

But now a new problem has taken shape on the site where the apartments formerly stood. A three-story building containing 16 unfinished condominiums stretches across half of the property, but work on the building stopped some time ago.

Area residents have no idea when construction will resume, and some  worry that the stalled project will become another neighborhood nuisance.

The site lies at the center of a subdivision laid out around 1940 as a walkable neighborhood of streets ending in cul-de-sacs, interspersed with sidewalks and broad green spaces.

The apartments that housed renters for decades consisted of two buildings that faced each other across the Wren Street circle. They formed the only apartment complex in a neighborhood that now contains 750 homes.

A few of the old apartments continued to house renters even as cracks widened in their walls and foundations, until a new owner purchased the site in 2014.

Wren Street LLC, a Biloxi, Mississippi-based company owned by Greg and Lori Stewart, proposed to replace the apartments with two three-story buildings that would contain 32 upscale condominiums on the upper floors and parking on the ground level.

Lake Vista resident Lynn Long recalls that shortly after buying the property, the Stewarts attended a meeting of the Lake Vista Property Owners Association to explain their proposal.

Long, who chaired the association at the time, said that residents who attended the meeting were pleased with what they heard. "People were pretty glad that those old apartments were going away because they were quite an eyesore," she said.

After receiving the requisite city permits, the developer demolished the Wren Street apartments in early 2015 and work began on the first condo building. But after an initial burst of activity, the work slowed.

"It took forever" for the building to take shape, Long recalled. And as it went up, it appeared to be a stripped-down version of what some in the neighborhood had expected.

A local real estate firm, the McCarthy Group, launched a website to begin marketing the three-bedroom condos to buyers; it listed unit prices ranging from $450,500 to $568,000. The website showed an architect's rendering of the development that included such design features as gabled roofs, dormers and window shutters.

But the building that arose on Wren Street had none of those elements and few other distinguishing features.

Though the web page remains active, McCarthy Group principal Shaun McCarthy did not respond to a request for comment.

Juggling liabilities

The Stewarts, who had been involved in developing hotel and residential properties in Mississippi for some years, began gearing up for the Wren Street project after obtaining an $8.4 million loan from New Orleans-based First NBC Bank in 2014.

The bank's failure and takeover by federal regulators a few years later appears not to have affected the condo project. But over time, other financial problems arose.

Property records show that Chicago-based NES Equipment Services Corp. filed a labor and materials lien against the project in August 2016, claiming that the developer had failed to pay $35,000 owed to the equipment rental service. And other liens would follow.

Biloxi contractor Caron Plastering Co. filed a $30,000 claim against Greg Stewart as an owner of both Wren Street LLC and a general contracting company, Lodging and Leisure Investment LLC.

Slidell attorney Wayne Jablonowski, who filed the lien for Caron, said he has "no idea" why his client was not paid.

Another claim against the developer arose from the sale of the single condo in the complex that attracted an early buyer. Robert and Mary Bourgeois signed a purchase agreement for a third-floor unit in 2016 and arranged a customized build-out of the unit while it was still under construction. But after trying for a year to get their condo completed, the couple "had to have the sale rescinded," Robert Bourgeois said.

"We were not happy, but it was in our best interest," he said. He and his wife, who had planned to live in the condo, have now relocated to the Dallas area.

The couple filed a $15,000 lien against Wren Street LLC, claiming that they had purchased finishing materials which the developer had agreed to reimburse them for, but the payment did not occur.

With financial problems mounting and none of the condos completed, work on the Wren Street project came to a halt. All activity at the site ceased, and construction equipment and materials disappeared.

In December 2016, the Stewarts sold the undeveloped half of their property to New Orleans-based Bancroft Property Investments LLC. The sale made possible a partial cancellation of the Stewarts' $8.4 million mortgage. But their problems persisted.

Among other costs, property taxes on the condominiums were stacking up. Orleans Parish Assessor's Office records show that Wren Street LLC owes the city $104,000, a debt that became delinquent in February.

'A lot of projects'

Lori Stewart, who is listed in business filings as owner and manager of Wren Street LLC, blames delays in the condo project on other development work the Stewarts have under way. "We have a lot of projects going on," she told a reporter during a brief phone conversation in mid-June.

Mississippi businesses that list her as a principal include a Biloxi apartment development called the Pointe at Bay Cove; a lodging developer that operates as Margaritaville Resort Biloxi; a company that renovated and operates the White House Hotel in Biloxi; and Vicksburg Hotel LLC, which purchased a Harrah's hotel originally built in conjunction with a casino.

Greg Stewart is a principal with Lodging and Leisure Investment LLC, which is named in court documents as the general contractor on the Wren Street condominium project. Records show that he focused on contracting after running into trouble in the practice of law.

The Mississippi Bar Association disbarred Stewart in 2004 after he pleaded guilty to extortion in connection with a scheme of payments to a sheriff's deputy aimed at getting DUI charges against Stewart's clients dismissed.

After paying a $20,000 fine and completing a three-year probation, Stewart applied for reinstatement, but the bar association in 2008 denied his application. Stewart said at the time that he intended to return to the hotel development business. Many of the businesses in which he and his wife are currently involved now list Lori Stewart as their owner or manager.

Asked about a timeline for resuming work on the Wren Street condos and putting them on the market, Lori Stewart suggested action is imminent. "We are right on the edge of getting our (certificate of occupancy)," she said. "We're waiting on elevators to go in and one or two other things."

When asked about specific remaining requirements for the certificate of occupancy, she suggested that the contractor would have that information. When pressed for the name of the contractor, she said she could not immediately recall who is managing the project.

Records indicate that her husband's company is the general contractor on the project.

A check with the city Department of Safety and Permits showed that a final inspection of the Wren Street condos, which is required for a certificate of occupancy, has not been scheduled. The property also has not yet undergone mechanical and electrical inspections.

Steep hurdles

Robert Steeg, a New Orleans real estate lawyer who has no connection with the Wren Street project, said it appears that the Stewarts face steep hurdles before they can finish and begin marketing the condos.

"The taxes and liens are issues that have to be satisfied before the developer will be able to proceed, and certainly before they will be able to sell any units," Steeg said.

Eventually, if the taxes continue to go unpaid, the city could put the condos up for a tax sale, perhaps as early as next spring.

The Stewarts might also consider selling the property to another developer, though a prospective purchaser might be reluctant to assume the potential liability for a project that was built by someone else, Steeg pointed out.

Recently, the Stewarts negotiated new terms on Wren Street LLC's bank debt. Following First NBC Bank's demise, their loan was among many that were taken over by the Federal Deposit Insurance Corp. and then put up for auction.

The loan was purchased in October by Dallas-based LNV Corp., and records show that terms of the loan were modified in May to include an extension of the maturity date. The Stewarts appear to be in compliance with terms of the loan.

Meanwhile, the Wren Street project may get a new neighbor relatively soon. Sam Mickal Solomon, whose Bancroft Property Investments last year bought the undeveloped half of the Stewarts' property, is planning to build new residences there.

Solomon said his project will be "nothing like the one across the street" and will instead feature eight townhouse-style homes in four buildings, all governed by a single condo association. The three-story buildings will contain high-end homes, he said.

His company has completed the construction documents for the project and now is going through the permitting process. Solomon, who promises a "high-quality development" on the site, said he recently met with the Lake Vista Property Owners Association board to show them drawings and explain his plan.