The pending redevelopment of the JCPenney Building at elicited quite a bit of dialogue at the January meeting of the Central Business Improvement District. Presentations and tours of that building, plus the Medical Arts Building were held yesterday morning for the development committee. The developers of the JCPenney Building (412-416 Gay Street), represented by Tim Hill and requesting a $400,000 grant, also spoke to the board. The developers of the Medical Arts Building, requesting a $425,000 grant, could not attend, so the conversation shifted to the JCPenney Building.
The JCPenney building is actually three buildings, constituting about 60,000 square feet, which were merged by the company many years ago. The building has sat empty on Gay Street for thirty years. Two options are possible for the building according to Tim Hill: In the first option, the building has three or more retail establishments on street level with a urban bowling alley in the basement and condos above the first floor retail. In the second, more appealing option, the basement would be a bowling alley, the first floor would be one retail store and the remaining floors would be corporate offices for that retail establishment.
He indicated that a letter of intent has been signed with a tenant to establish the bowling alley and he is in contact daily with the CEO of an unnamed national retail chain that very much wants the bottom floor as their flagship retail store with their corporate headquarters in the remaining floors. At 11,000 square feet of retail, this would be their largest store. The corporate offices alone would bring 400 jobs to downtown Knoxville.
The entire project carries an $8.6 million dollar projected cost. They should receive word on April 13 on their application for a HUD grant which would underwrite a large amount of the expense. Mr. Hill made the case that Knoxville has reached a pivotal point with large retail interest just now starting to emerge for the center city. He credited Urban Outfitters’ commitment as an important turning point and indicated that his potential client would likely have a similar draw for other businesses.
He’s asking for the $400,000 to be spread over the next three years. The concern of the board is that funding this project and even half of the Medical Arts project would take all but a small portion of all development money from CBID for the next three years. What if another great project presents itself? Someone representing the Kress Building asked to speak at the development committee meeting and indicated something big is pending with that building and that help would be needed.
I’ll discuss the Medical Arts project in greater detail at a later time, but it is also an $8,000,000 project and it would result in 49 residential units with 77 bedrooms. So, on the one hand you have a centralized, high-profile building with great job generating potential. On the other you have a building that would bring another 100 – 150 residents into the city and it would stretch the boundaries of the inhabited space. Which would you fund? And for how much?