Vision Apartments, 501 E. Hill Avenue, Knoxville, November 2022
It’s been a long and arduous journey for the former Marriott at 501 East Hill Avenue (briefly known as Hotel Knoxville). In October 2020, Melrose Knoxville, LLC (DBA Omni Vision Knoxville) a group based in Beverly Hills, and backed by California billionaire Neil Kadisha, owner of Omninet Capital, purchased the building for $16.8 million. The stated intention at that time was retooling it for a senior care facility. According to a Knoxnews report at the time, Kadisha was also listed as an owner on the Hotel Knoxville deed.
Plans have changed, and now development is underway to transform the former hotel into apartments with retail. 375 units are planned, with 360 designated as studio apartments. According to their application request for an economic development grant through C.B.I.D. (Downtown Knoxville), “The goal is to help young professionals and students have affordable housing.” The group says they have invested $9 million in renovations to date.
What “affordable housing” means was not defined on the application, leaving it unclear whether these would be market rate. I reached out to Itzamar Jimenez, Project manager who clarified that it will be, “affordable housing for tenants, slightly lower than market rate.”
The company recently stated to the C.B.I.D. Development Committee that they had been approached by the University of Tennessee about the possibility of leasing a block of the units or the entire building in order to ease their student housing crunch. Ms. Jimenez said, “We have received the master lease agreement from the University of Tennessee. Our legal is currently reviewing the terms and conditions. We are moving forward and we are in the middle of the mutual negotiation.”
In addition to housing, the group suggests the building will have a retail element, most likely a restaurant, coffee shop, and/or bar. They have yet to identify a client for the retail portion.
On the application for a $50,000 economic development grant (previously façade grants), the group said the money would go toward “maintenance to the 110 large windows large bay windows facing the TN River, repairing leaks through the concrete, pressure washing the building, etc.” Total cost of the project would be around $150,000 to $170,000 with the remainder of the cost being borne by the company. The application was approved 3-1 in the Development Committee, which moved it forward for consideration by the board.
Questions were raised both in the committee and by the board regarding whether the funding for maintenance on the building fits the guideline for an economic benefit to the community. Questions were also raised as to whether work had already begun, which is contrary to C.B.I.D. grant guidelines. Additionally, some questioned whether U.T.’s housing crunch should be subsidized by downtown tax money, and others questioned whether the intention of the grant program is to perform maintenance on buildings which have been neglected.
The project would bring more people downtown and it would rehab a building that has languished. In addition to providing housing, the owners pointed out in their application, the building would provide employment for “15-20 positions open for staff and maintenance.”
In the end, the vote on whether to provide the grant was deferred in order to provide the board an opportunity to ask more questions and possibly get updates to the application. Several board members expressed disappointment in the presentation that was made to the committee, the application itself, and the fact that no representative appeared to answer questions as they request a large amount of money.
Project representatives told a board member that they hoped to open the housing development in the spring, and Ms. Jimenez echoed that, saying that they hoped to open in March or April. The board member noted that much work needs to be done.