A controversial downtown Indianapolis apartment building that never opened due to severe design deficiencies is a step closer to being ready for tenants after city officials granted the project’s new owner a zoning variance.

Louisville-based Stock Yards Bank & Trust took ownership of the 31-unit Di Rimini project at 733 N. Capitol Ave. this year after foreclosing on a $2.8 million loan to the developer.

The building, which violated height regulations, was granted a variance Tuesday to allow encroachment into the so-called sky exposure plane at the corner of St. Clair Street and Senate Avenue.

Next up is an Aug. 23 meeting of the Metropolitan Development Commission’s regional center hearing examiner, where exterior fixes to the building will be considered. Because the building is within the city’s Regional Center overlay district, the project needs to comply with certain urban design guidelines.

The bank is proposing several fixes, including adding brick to first-floor facades, lighting at each first-floor entrance, glass doors and canopies for first-floor entrances, a new stair tower clad in brick, improved landscaping and changing leasing-office space to retail. It would also have to invest in major improvements to the interior to pass code enforcement.

The city ordered construction to stop in October 2010 after code enforcement and planning department officials discovered developer Jeff Sparks was building an entirely different structure than the one for which he had sought approval. Despite the order, the owners began moving tenants into the building, leading the state's fire marshal to issue an emergency order barring occupancy.

Violations of the Indiana building code included a lack of fire walls between apartment units or a working sprinkler system.