Local developers are trying to put the Mundy Mill development back on its feet.

Butler Property LLC, which acquired chunks of the property in December 2009 and September, is going before Gainesville’s planning and appeals board to ask for some zoning changes.

The changes would allow the option of constructing apartments in parts of the 65 acres that are now planned for condominiums and townhomes. The request also includes lowering minimum apartment square footage to 500 square feet from 775.

The change will help address future demand in the housing market, said real estate executive Frank Norton Jr. of The Norton Agency, who has acted as an unofficial consultant to the city for the project.

“This is part of the evolution that started a year or so ago to continue to put Humpty Dumpty back together again,” he said.

“This is nothing radical, but they’re trying to refine the zoning everyone was left with after the previous well-intended developer ended up with financial difficulty.”

Robby Lanier annexed 605 acres in October 2004 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 later amended the plans to allow for more commercial space and nearly 200 additional townhomes.

County records show he borrowed millions from at least four separate banks, all anxious to capitalize on the booming housing market.

But when the bubble burst, only 67 homes had been built. The neighborhood homeowner’s association essentially stopped operating, and weeds grew as half-finished roads and stacks of shingles sat alongside illegally dumped sofas.

“Butler is trying to clean up the zoning so it’s put in 2010 terms of what can be done in the marketplace and move the project forward,” Norton said. “The part that allows an apartment component is on the other side of the road in different lenders’ hands, so this will allow the northern side to have an apartment component and Mundy Mill can really be that ‘Live, work, play’ environment in multiple price points.”

Throughout July to September 2009, bank after bank foreclosed on millions of dollars of property at a time, and Lanier defaulted on his loans.

In December 2009, Butler Property entered the scene and acquired several developed but vacant lots that had been foreclosed on by United Community Bank. Once Regions Bank foreclosed on the largest chunk of property in the summer, Butler bought the acres this September.

Since then, Butler started removing trash from the property, and the homeowner’s association is now operating. The common areas are being maintained again, and entrances are being repaired.

“They’ve spent a great deal of time and money cleaning it up, with dump truck after dump truck of debris being hauled out,” Norton said. “They still don’t control the whole development, but they generally own a large part of the northern section, and they’re trying to clean it up and bring it back to the original dream.”

The new changes will make the development more realistic with current housing troubles, Norton said.

“It’s unlikely in this market that a townhouse product will be successful in the short-term or midterm,” he said. “I see it as a positive and think they’re doing everything they can to re-energize the development.”