Dispute Threatens to Derail Preservation and Development of Pryor Brown

Pryor Brown Garage, Market and Church, Knoxville, June 2016
Pryor Brown Garage, Market and Church, Knoxville, June 2016

The trail to this point is a long one. For those of you who may have missed, or don’t remember the earlier developments, I’ll recap. Pryor Brown Garage is a building located on the corner of Church Avenue and Market Street. According to my best memory of an unfortunately lost article by Jack Neely in Metro Pulse, the building is over 100 years old and may be the second oldest parking garage in the country.

I first wrote about the building in March, 2013 when the owners of the building, Royal Properties (Mike Conley, principal), requested $300,000 from CBID to repair the roof and help to do other improvements to the building they insisted was an important historical asset. Ultimately, that request was rejected as the CBID board felt the building was in poor shape due to negligence of the owners who had held the building for over fifteen years.

By June of 2013, I reported that Royal Properties had requested permission for demolition with plans to have the entire city block (they own the whole block, which is dominated by surface parking) be relegated to surface parking. Unlike two months earlier when the building was, according to them, a treasure, it was now a hazard that must be removed. They mentioned vague plans for a tower on the site, “when it becomes economically feasible.”

Pryor Brown Garage, Market and Church Street, Knoxville, January 2017

Later that month the last ditch effort to slow the request failed at the Downtown Design Review Board. Still, it was not torn down and it was March of 2014 when the Metropolitan Planning Commission seemed to acknowledge (after some legal wrangling) that they had no authority to stop a demolition or prevent more surface parking. All seemed at an end. In September of 2014 I wrote a farewell to the garage as demolition finally seemed to be at hand.

But what followed was two years of rumors and speculation as frantic attempts were made behind the scenes by Mayor Rogero, Knox Heritage and others to work out a deal to save the building. After nearly two years, a joyous press conference was held in June of 2016 in which the announcement was made that Royal had reached an agreement with Dover Development to save the building. In January of this year I gave readers a first look at design plans for The Residences at Pryor Brown. In April an ad was taken out on this site promoting the project.

But all was not going well between the parties involved.

I learned late last week that Royal Properties has sued Dover Development in Chancery Court to dissolve Pryor Brown, LLC, the entity formed to represent their partnership in the redevelopment of the building. They contend that the terms of the agreement, officially signed in August of 2016, have not been met and should be rendered void.

Royal says that the building, which they owned prior to the agreement, was placed into joint ownership of Dover Development (60% voting rights, 50% ownership) and Royal (40% voting rights, 50% ownership) based on assurances from Dover Development that the building redevelopment was financially viable. The value of the building, according to the suit was listed at $2,250,000.

Preliminary Design Drawings of The Residences at Pryor Brown, Church and Market Street, Knoxville, January 2017
Preliminary Design Drawings of The Residences at Pryor Brown, Church and Market Street, Knoxville, January 2017
Preliminary Design Drawings of The Residences at Pryor Brown, Church and Market Street, Knoxville, January 2017

The suit contends that once the transfer of ownership was made that estimated costs of the project, originally stated to be about $6,000,000, began rising and were quoted by Rick Dover at various times to range as high as $17,000,000. By this spring, according to the suit, he, “advised Royal that $14,500,000 was the lowest cost possible, and that the redevelopment of the building was no economically attractive to him personally at that projected cost.” By June, the suit states, “he was continuing to investigate the project and was doing structural work (and) . . . advised Kelly Conley that it may be time . . . to figure out how to unravel the proposed transaction.”

Within a few weeks, the suit alleges, “Dover demanded that Royal either purchase his 50% interest in the LLC for $789,000, or sell Royal’s 50% interest to him at that price. Dover failed to address Royal’s capital contribution of $2,250,000 for the the building, and the agreement that Royal would receive $2,250,000 from the project under all circumstances.”

Their contention is that, given recent statements about cost and viability, Royal was falsely induced into the agreement and that the agreement, therefore, should be voided. They also want damages for the delays and for his use of their building as a staging ground for his other projects, as well as up to $1,000,000 punitive damages.

Rendering by David Denton of a potential redevelopment of Pryor Brown Garage

I reached out to Dover Development for a statement and received a response from Mike Cohen speaking for the company:

We remain excited about restoring the historic Pryor Brown Garage, and preserving its wonderful history. We have completed the mixed-use architectural design, the initial construction bids and the financing is secured. When all this is resolved we still hope to be able to preserve and redevelop Pryor Brown.

So, according to Dover Development, there is still hope for this special building to be preserved. The family’s plans for the building, should the Pryor Brown, LLC be dissolved, are unclear. Given the narrative surrounding this building prior to this agreement, it would seem prospects for the preservation of the building would be tenuous. The best hope for preservation may lie with the ability of Royal and Dover to come to terms and continue their joint effort in order to preserve a piece of our community’s history.