Cal Johnson Building to be Restored

Rendering, Cal Johnson Building, 315 State Street, Knoxville, July 2018

It’s been a long journey for this building which was built by former slave and Knoxville’s first black millionaire, Cal Johnson. Listed in recent years as one of the most endangered, its future has been the subject of hot debate. Two years ago the city placed it under an H1 overlay in order to give it a better shot at surviving. Ultimately, some of the tools available for a building in an overlay will be utilized to ensure the building stands for another generation.

A building that the city wanted to demolish for urban renewal in previous decades and that the family used for storage for two generations while its condition worsened, will now be developed by the Dance family. They’ve enlisted Conversion Properties for the development and Michael Brady as architect. Pending final approval of a 15 year PILOT from City Council (valued at just over $800,000), the project will begin in earnest in September.

Historic Photo Circa 1930s, Cal Johnson Building, 315 State Street, Knoxville, July 2018 (McClung Photo Collection)

The history of the building and of its builder is an interesting one. Cal started work after the war moving bodies of union soldiers to the National Cemetary. His money was made in Saloons, Horse racing and real estate. He built this warehouse in 1898. According to information gathered by Jack Neely (Knoxville History Project), it was utilized multiple times as a clothing manufacturer by various companies and, at least twice, for automotive sales. It sat on property accumulated along State Street by Cal Johnson along with his brother and mother.

His house, long since demolished, sat next door and about the time of his death, in 1925, the Deaver Dry Goods Company began using the building for storage, which they continued for 47 years. The Dance family acquired the building around 1980, which was around the time that the only other remaining building associated with Cal Johnson, his Lone Tree Saloon, on the 200 block of Gay Street, was destroyed some years later, its location ultimately obliterated with the destruction of the entire block.

The current renovation and re-purposing of the building requires a complex set of financial tools, according to Joe Petre of Conversion Properties. The fact that the property is being developed by long-time owners is the only way, according to Petre, the development would be feasible since it doesn’t require an investment for its purchase. The family is self-financing part of the expense and a loan has been secured for the purpose, CBID has committed $150,000, the City has offered a historic preservation grant and Historic Tax Credits are being utilized.

Cal Johnson Building, 315 State Street, Knoxville, July 2018

Cal Johnson Building, 315 State Street, Knoxville, July 2018

Cal Johnson Building, 315 State Street, Knoxville, July 2018

Joe’s involvement came, initially, as a result of knowing the family for a long time. The family had estimates for shoring up the facade, but he suggested they look at a larger project. In 2017 a feasibility study was performed, another firm dis some early work, and Petre points out that it has taken a nearly two years to get to this point.

Conversion Properties has been the developer for several major local projects. They are currently involved in the Regas Square Condo project, but they are responsible for the Southeastern Glass Building and the Tailor Lofts Building to name a couple. It’s that last building they had in mind as they began considering the Cal Johnson Building. Tailor Lofts has a smaller footprint, but is four stories. The Cal Johnson is a bit larger around, but is only three stories.

The development will follow a similar pattern to Tailor Lofts. It will include a small ground-floor lobby/entrance to the apartments upstairs and the remainder of the floor will be a commercial space, which they feel may be best suited for a restaurant. The upper floors will include eight apartments.

Cal Johnson Building, 315 State Street, Knoxville, July 2018

Cal Johnson Building, 315 State Street, Knoxville, July 2018

Every redevelopment of an older building presents unique challenges and Petre and Daniel Oodle said this is no different. As a free-standing building, it has to meet stricter structural codes, since in-line buildings help support each other. One corner of the building was particularly damaged and in a case of making the best of a bad situation, that corner will hold the stairwell and elevator. This allows preservation of the remainder of the building.

They will save the floors, but this is a different matter than in some other projects. While the bottom floor is a slab and can be preserved as is, the upper floors were not built for occupation and so they are one layer of heavy sub-flooring. For sound attenuation and to meet fire code, additional flooring will be required there.

The National Park Service requirements are enforced in any historic building in which historic tax credits are utilized. This means, for example, retaining the plaster on the interior walls. This is an example of the expense that can be involved – the mortar and bricks behind the plaster have deteriorated and have to be re-tucked to meet other code requirements, making for near-impossible – and potentially expensive – restorations.

First Floor Plans, Cal Johnson Building, 315 State Street, Knoxville, July 2018

Second Floor Plans, Cal Johnson Building, 315 State Street, Knoxville, July 2018

Third Floor Plans, Cal Johnson Building, 315 State Street, Knoxville, July 2018

An inline building, like most of those found downtown is typically 25 feet wide, while this one is 39 feet wide. This allowed for the commercial entrance on the front to be wider. The windows along the side will largely be preserved as they are, though some may become false windows due to placement of the apartment walls. The city has acquired the property (sixteen feet) along the south side of the building as a right-of-way, allowing the windows to be guaranteed light.

The first floor commercial space will incorporate about 4,000 square feet. The upper floors, divided into eight units, will include larger units facing State Street, with about 1200 square feet. The upper unit of those two will have a mezzanine loft which is possible because the roof is taller on the front side of the building, which will allow it to have about 2,100 square feet. It will have three bedrooms.

To meet the needed financial markers for the project, as many bedrooms as possible have to be included. In addition to the one three-bedroom unit, there will be five with two bedrooms and two with one bedroom. An interesting illustration of the complexity of what seems like a simple project is the fact that if it included one more apartment, a second stairwell would be necessary and that loss of square footage would make the project unworkable.

Rendering, Cal Johnson Building, 301 State Street, Knoxville, July 2018

Those are simply some of the moving parts in determining whether a project is workable. Support from the city carries with it a cap of 12% on the profit margin. The plan is developed with that limit, but the numbers can’t be changed if subsequent exploration finds structural or other problems, meaning the 12% can potentially shrink as the project moves forward. The risk is borne by the owners of the building, in this case.

The hope is that the final approval of the PILOT and permitting will be completed next month, with construction beginning in September. A tentative time-line calls for the work to be completed in about ten months, meaning the building could be ready for new occupants by next summer.

Comments

  1. Suzanne Kaebnick says:

    In the spirit of Cal Johnson’s generosity to his park (much of which the city demolished, such as the marble fountain he installed), the city should renovate the building, and dedicate its use to community empowerment uses for the city’s youth and young adults.

    • Great idea, but that would not fiscally tenable, especially considering this is being renovated by private industry rather than the City.

  2. Sabrina says:

    A friendly reminder to all you engaged citizens. Make your voice heard! Early voting for the midterms ends tomorrow and primary days is Aug 2! 🇺🇸

  3. Anything new on the proposed project by hatcher hill next to mast general that has been changed according to your article of a few months ago,?

  4. Leland Wykoff says:

    Why is public funding still going into these downtown projects? The pump has long since been primed. At this point projects should be financially feasible on their own merits–or not.

    These transfers of public wealth to private hands seems to simply be making projects all the more lucrative for the developers. Why should tax dollars be used to shore up the bottom lines of developers?

    • They aren’t giving away money. A PILOT program freezes property taxes at current rates and allows the property owner to recoup some of their investment before higher rates, based on the improvements, goes into effect. Its a win win allowing property owners some financial flexibility on tough projects while earning the city more in property taxes on buildings that wouldn’t be improved otherwise.

    • Perhaps you should Google PILOT arrangements

    • The challenge is three fold: First, you get hit by CBID, county and city taxes; which can add up to half a million in taxes per year. Second, the industry is getting crushed in terms of construction costs because of all the activity not just in Knoxville, but in Atlanta and Nashville. Labor costs have skyrocketed. Sub-contractors are overloaded with work. Third, land is scarce, so you’re either working on very old buildings that have been ignored for the last decade because there were easier projects to do; or you’re doing new construction on small lots that require mid to high rise structures and parking beneath them, which is very expensive. Retail uses can absorb the higher taxes, but that is the smallest piece of a mix use project. Its much harder to pass those taxes on to apartment residents, and the office market is still soft. Consequently, if tax incentives stop, it will dramatically curb downtown development until a recession occurs, where construction and land costs may come back down to earth or inflation will catch back up to them.

      • Calvin Cassady says:

        I feel the same way. Why are big developers still getting tax breaks when property taxes go up on the rest of us? Downtown can stand on its own, the market has been well primed. The supply of conversion properties has dwindled and the market for the remaining properties should be un-subsidized. When we continually shift the property tax burden away from the most valuable commercial land in the region and onto the neighborhoods it results in a very regressive property tax regime. We are probably to the point that the city would get sued if they ever turned one of these PILOT or TIF projects down because I don’t ever remember one being voted no. I also believe the public should be involved and the process should be transparent before it goes to a council vote.

        • That’s not what’s happening. Taxes are not being shifted, the tax level is being temporarily paused for renovation and rejuvenation of this blighted property.

          Additionally, on what basis would any lawsuit stand for a PILOT or TIF being turned down? There’s no claim or hint of a claim that such a suit would stand on. At no point were any of these things promised. No legislation or formal adjudication would have made such a thought even reasonable.

  5. Wally Stewarr says:

    I am asking this for my own edification, as I do not know all the different aspects. I love history, and I love all the renovated and historical buildings that make up KnoxvIlle. Does this building have significant architectural importance? It seems to me that considering the disrepair of the building, and the potential profit cap of 12%, what makes it worth saving?Sometimes, we just need to say goodby to older things just because they are no longer relevant. Should a remnant be saved just because of who provided the original financing? I wish the property owners well, and hope they are successful, but shouldn’t we look at structural integrity and design to maximize conservation efforts?

  6. I am glad to see the building being saved. I guess I had hoped for something more meaningful to come out of it. That building would have made a great black history museum. With all the new hotels and growth we are having it would be nice to have something as symbolic as that as focal point downtown. I suppose given the condition of the building it would have taken decades to see any type of return on investment though. I hope the city actually does something to save the remains 3 building on that corner. There are trees growing on the ones roof and I can’t imagine cardboard windows keeps much of the weather out.

    • The Modern Gal says:

      Maybe at the very least whoever takes on the commercial space will find a creative way to honor Cal Johnson’s legacy.

  7. Just John says:

    This is great news. They building previously destined for the trash heap has gotten a new lease on life.

    The owners of the CJB also own the taller buildings adjacent to it, fronting Summit Hill Boulevard. Is there any discussion of re-developing those, as well?

    • KnoxvilleUrbanGuy says:

      The focus at this time is on the Cal Johnson. Perhaps if that goes well, we all might hope the other will get some attention.

      • Let us hope so. This is a great start to saving that corner. The remaining structures continue to deteriorate and have been heavily damaged by modification. Saving the remaining three, much larger buildings would transform this important gateway to Knoxville.

  8. Chris Eaker says:

    From your article about a year ago on this building, you wrote, “Essentially, the city is asking the Dance family to trust them that the more stringent requirements of federal regulation will not be imposed…”

    Is this still true? Did the city keep up their end of the bargain?

    • KnoxvilleUrbanGuy says:

      Yes, as far as I know and as far as the city had the power to do so. And the idea that historic tax credits would probably help them restore the building also was true. That said, it isn’t easy to get through all the layers of requirements and the city has to hold to those.

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