AJ Building Developer Says Work Could Begin Next Month

Few downtown buildings have spent more time in Knoxville’s collective “any day now” file than the Andrew Johnson Building. The historic Gay Street landmark has been slated for redevelopment for years, with plans revised, deadlines extended and progress largely invisible from the sidewalk. We last reported on it in October 2025. At the time, the developer said they anticipated beginning work by year’s end to return the building to its original use as a hotel.

The AJ resurfaced in the news yesterday when Knox News spotted a proposed fifth amendment to the development agreement between Knox County and BNA Associates tucked into the August County Commission agenda. The amendment would extend the developer’s deadline to begin construction on the former Andrew Johnson Building to Dec. 31, 2026.

In its headline, Knox News called the extension an “ultimatum.” But BNA Associates principal Philip Welker pushed back on that characterization when we spoke yesterday afternoon: “They got it wrong,” he said. Rather than another sign that the long-delayed project is stalled or that the county is applying new pressure, Welker said BNA requested the amendment because the development is finally ready to move forward. The amendment brings the development agreement up to date and into compliance.

“That date is longer than we needed,” he said. “We have the funding in place to start work next month.”

Welker admits it has been a very long road and one requiring four previous amendments to the development agreement. BNA was awarded the contract to redevelop the historic former hotel and school system headquarters in 2017, though the Knox County school system didn’t begin moving out of the building until summer 2021.

Welker walked me through the litany of complications that followed: the pandemic and its disruption of the hospitality market, followed by rising interest rates and inflation. Plans shape-shifted through the architectural process, financing became increasingly complicated, and BNA had other major projects underway in other cities. And, Welker said, investors were understandably “daunted by risk.”

“This thing is $75 million,” he said. “That’s nothing to sneeze at.”

There’s plenty to happen before construction crews get their hands on the building, and anyone who has followed the project this long would be forgiven for keeping the champagne corked until the first hard hat appears. But Welker’s assertion that financing is now in place — or at least, he said, enough of it to get the ball rolling —  and that they’re moving toward next steps (moving the legal process forward, obtaining a demo permit, closing, etc.) feels promising.

The Nashville-based developer has a strong track record of urban development and historic-minded projects in Knoxville, including The Oliver Hotel and its restaurants Tupelo Honey and Oliver Royale, the Peter Kern Library, and properties along Central Avenue, as well as in other cities.