When Douglas Development bought the old Wonder Bread factory at 641 S Street NW, the idea was to renovate it for office and retail. The economy squashed that plan. Lately, the company has floated the idea of turning it into a boutique hotel. But that’s now off the table as well.

The current thought for the historic factory, said Douglas Development’s Paul Millstein at the Shaw Development Forum last night, is to turn it into roughly 80 small leased apartments—between 500 and 700 square feet each, leasing at market rates—using a similar design to the one drawn up for the office/retail concept. They’re talking to some investors, looking to get the financing nailed down before saying much more.

He seemed confident, at least, that they’ll be holding on to the building—dozens of tax bills on Jemal properties were among thousands on the auction block earlier this week, but about half didn’t sell. Tax records still show Jemal owes $186,184 on the Wonder Bread Factory.

Even that preliminary project might be the most Douglas Development has going at the moment. The company was ill-prepared for the recession and even the nascent recovery: Jemal has always developed office buildings on spec, only leasing when they’re totally finished, but nobody is financing anything these days that without at least an anchor tenant. Now, Millstein said, they’re starting to realize that’s not changing anytime soon.

“We’re stuck,” He said. “We’re stuck in the mud.”

Photo via flickr user voteprime.