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Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

Just less than a year ago the old Farragut Hotel building was part of our local conversation. Developers from California-based Halo Hospitality Group had an option to purchase and said they intended to return the hotel to its former glory and purpose by building out 190 rooms with high-quality amenities. The developers called a large press conference and opened the building up for a grand tour. I wrote about the proposal and included photographs, while Jack Neely wrote about the proposal, focusing on the history of the building.

It seemed too good to be true and Joe Sullivan said as much in Metro Pulse in an article about all the hotels being proposed for the downtown area. There were four, not counting the eventual hotel proposal for the Baptist Hospital site. Two, along with the Baptist Hospital proposal, have since been abandoned and the other two haven’t begun construction.

In the eleven months since that heady presentation, the company attempted to make the proposal work, seeming to make some headway, but they subsequently released their hold on the property and it came back on the market. Others expressed and continue to express interest, but Rick Dover of Dover Development (formerly Family Pride) stepped in and purchased the building for about $3.7 million. The twenty-two year old Knoxville-based firm is near finishing their conversion of Oakwood Elementary School to senior housing. They are restoring the Alexander Inn in Oak Ridge and will soon convert Knoxville High School to seventy-six units for seniors and six artist lofts.

Rick Dover, Family Pride Corporation, Knoxville, January 2015

Rick Dover, Family Pride Corporation, Knoxville, January 2015

Last Thursday night Mr. Dover hosted a conversation with local business leaders regarding the future of the building. He started by surprising me. I expected to hear about a mix of senior housing, retail and, perhaps, some floors dedicated to upscale housing. To the contrary he opened with the statement, “The Farragut needs to be a full-service hotel, but that is challenging.” He went on to reminisce about attending dances there as a teen attending Bearden High School. He said, “We need to get this right. What happens there needs to succeed. He noted the exterior of the building will, in any case, be restored to its original appearance.

The primary course of the conversation was set, with the focus on a hospitality focus for the building. While the possibility of a mix of condos remains on the table, the conversation focused on high-end hotel rooms, event space and one or more restaurants, with at least one being high-end. He also seems intent on utilizing the roof space. Becky Hancock, executive director of the Tennessee Theatre Foundation, noted that a 200 to 300 capacity ballroom space would be utilized for before or after events in conjunction with the theatre. She did note and Chyna Brakeen of Attack Monkey Productions agreed, hotel rooms, particularly of that level of luxury, are not typically used by performers, though patrons attending the shows might do so.

Mike Riley, manager of the Oliver Hotel attended and had quite a bit to add. He stated he felt if it became a hotel it would complement his property and said they’d considered it when they moved to town, but it “was tough. He said that while difficult, a four star or diamond hotel and restaurant is needed in downtown Knoxville and that the presence of a four diamond hotel often attracts four diamond restaurants. The idea of a flagged vs. non-flagged hotel was discussed and generally the agreement in the room was that if the affiliation was with a very high-end flag, that would likely work.

Rick Dover, Family Pride Corporation, Knoxville, January 2015

Rick Dover, Family Pride Corporation, Knoxville, January 2015

The desire for condos – particularly for some with two or more bedrooms was discussed. Melinda Grimac of Sotheby’s noted that the 301 Building – some of the last high-end condos built downtown – have sold, with the most recent going for over a million dollars at $525 per square foot. George Brown of Wood Properties, noted that interest in the building has been about equally split between condos and hotel rooms. (See Downtown Properties tab above for what is currently available in the city.)

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

But the focus remained on hotel space. Kevin Grimac noted that contrary to the occupancy numbers that are often floated, when he wanted to bring a group of people to the city last summer he had a hard time finding rooms. Jeffrey Nash concurred, recounting an international wedding party having no central high-end place to stay. He noted that now that outside money has started to flow into Knoxville, that by the time this project could come to fruition, the demand will be even higher. A representative of Knoxville Opera pointed out that some artists will only come to Knoxville if they can get a room at the Hotel Oliver. All agreed that a high-end historic hotel holds great appeal to certain groups.

Mr. Dover concluded the meeting reiterating that he wants this to be a high-end project. He used the word “swanky” even as he apologized for doing so. Clearly he wants the building to be a hotel, though he said he was looking for someone to talk him out of it, given the risk. No one present offered to do so.

Comments

  1. Jeff Shrewsbury says:
  2. Just John says:

    Thanks for answering my first inquiry. Two more:
    1. In previous discussions they have mentioned wanting to keep the creperie. Did Mr. Dover mention that this time? He mentions that he wants one or more restaurants, one of which will be high-end, so the math suggests that if only one restaurant is present it would not be the crêperie.
    2. In the post you mentioned they want to do something with the roof. Did he specify?

    Thanks !

    • KnoxvilleUrbanGuy says:

      I don’t recall the French Market being mentioned. That said, I believe they have a fifteen year lease with quite a number of years left in it. He didn’t mention two restaurants, someone else did. He indicated an interest in a high-end restaurant which he wanted to be a destination restaurant as well as an amenity for guests. My understanding at the time was that none of the above impacts the French Market which, though in the same building, is seen as a separate and distinct entity. I could be wrong. With the roof, all kinds of ideas were floated, but nothing is settled – just that he wants to utilize the space for guests. At this point no decisions have been made about anything.

  3. I’m just thrilled that Mr. Dover has a commitment to restore this fabulous building. There are probably several types of renovation that would work, but a luxury hotel would add a new element to downtown to complement the Oliver. Having moved from uptown Charlotte, my wife and I would love an upscale dining option downtown similar to what we enjoyed there. Does anyone know about the future of the Andrew Johnson Hotel. Surely this is an enormously valuable piece of property on Gay Street so close to the river.

    • Randy,

      The Andrew Johnson houses the Knox County Schools offices, the PBA offices, and the Knox County Probation offices (among other county entities I think).

  4. Rick Dover has a long track record and does an excellent job of preserving and re-purposing historic properties. I look forward to seeing what he does with The Farragut. A “swanky” hotel would be a fine choice for Knoxville.

  5. That’s certainly surprising, and would be risky with a capital R for an owner without extensive hotel experience.

    I guess I’m in the minority, but I’d like to see a high-end senior housing downtown somewhere. I’ve seen developments of that type in Washington and Virginia Beach that are as “swanky” as a high-end hotel.

    Best of luck to them on whatever they attempt.

    • KnoxvilleUrbanGuy says:

      As you know, this developer has done extensive work with senior housing and that was mentioned. It sounds like there may ultimately be a mix there as filling the entire building with hotel rooms is very risky. The indication was that if condos were included, people who purchased them would have the same amenities as hotel guests – like maybe room service and valet service. It’s all talk, now, of course, but he has already spent 3.7 million, so he’s likely to feel pressure to do something in the relatively near term.

  6. My husband and I live downtown and are longing, along with many of our friends, for an upscale restaurant in Knoxville that is truly unique; farm-to-table or Mediterranean would be my first two choices.

    • KnoxvilleUrbanGuy says:

      You may get it in the Farragut – but you might want to make other dinner plans for the two or three years you’ll probably have to wait. 🙂

  7. Just John says:

    The Farragut Building has outlived several recent rehabilitation efforts. Did Mr. Dover give any timetable ?

    • KnoxvilleUrbanGuy says:

      No timetable was given, but he has actually purchased the building for 3.7 million, making his “talk” a bit more credible than the previous conversations. They never actually bought the building and he has a significant investment. He also stated he could have sold it since then for more than he paid. So, I’m hopeful that this one is different.

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