The Mundy Mill development along Mountain View and Old Oakwood roads needs help getting back on track, local developers told Gainesville City Council members who were receptive to a new plan Tuesday night.

The spark could come from creating apartments in certain areas of the 605-acre development, said representatives for Butler Property LLC, which owns a portion of the Mundy Mill development. The group proposed the ability to build apartments on 65 acres of the property and lowering the minimum apartment square footage to 650 feet for some one-bedroom units.

“We’re in a new economic reality, and things have changed since this property was first introduced,” Wes Robinson of Hulsey, Oliver & Mahar said on Butler’s behalf. “This will be a truly mixed-use development in an economy that’s going to need apartments in the future. People won’t have as easy access to condominiums or townhomes, and the original plan that approved apartments on the other side of the Mundy Mill development is not owned by Butler.”

In 2004, Robby Lanier annexed 605 acres with plans to build “a village in miniature” — 1,148 single-family homes, 578 townhomes, 460 apartments, an elementary school, recreational sites and hundreds of thousands of square feet of commercial and office space.

Lanier borrowed millions from four banks. But after the housing bubble burst, bank after bank foreclosed on the properties between July to September 2009.

In December 2009, Butler Property acquired several developed but vacant lots and landed the largest chunk of property last September. Since then, the company started renovating the area and removing trash.

“What a ride with this project, and we’re almost there,” said Frank Norton Jr. of The Norton Agency, who has acted as an unofficial consultant to the city for the project. “Live, work, play and educate — that was the original goal for Mundy Mill.

It provides the spectrum of price points necessary for that ‘live, work, play, educate’ community and a 21st century lifestyle.”

Two objections to the proposal came from Dean Warnock and Kelvin Simmons, homeowners and neighbors in the nearby Maple Forge Subdivision, who feared the zoning amendment would hurt property values.

“I don’t have to remind you of the history of this development and the great deals planned four, five years ago, which has probably been the worst development in the history of the county, and I don’t see it going forward,” Warnock said. “We’re the subdivision closest to this development, and we’ve had definite interest in what was going to happen.”

Warnock has already seen his property values drop several times during the past few years, and smaller apartments with lower prices could bring gang activity and safety concerns, he noted.

“The same thing is happening tonight that happened before,” he said. “There’s a grandiose plan that they say will recharge the development even though they don’t give specific plans. They want you to approve it on a promise, and I’m telling you, it’s going to kill our property values.”

Simmons, who originally supported the development, was shocked by the request to lower the minimum one-bedroom square footage to 650.

“Everybody is trying to make a dollar at the expense of someone else,” he said. “What do you have surrounding your homes? Would you lower your property value where you live at? Think about it, is all I’m asking.”

There aren’t any immediate plans to build on the land, but developers need to start moving forward with ideas, noted Butler’s developer Wendall Starke.

“It’s not the right kind of market to build right now, but we need long-range plans to make it what it was intended to be. We need to know what possibilities there are for good townhomes, condos and apartments,” he said. “I realize that Maple Forge is very nice, but I don’t think anything we will do will harm the property values. There’s a big difference in the way Mundy Mill looks now and what it looked like six months ago.”

City Council members decided to move forward with Butler’s proposal, giving initial approval  Tuesday night. Residents can voice their opinions about the proposal at the second public hearing at 5:30 p.m. Jan. 18.

“The major goal is to bring Mundy Mill back into play as it was intended as best as we can,” Mayor Ruth Bruner said. “I appreciate the efforts to bring it back up with cleanliness and better roadways.”