Tax break for Andrew Johnson Building OKed by city council

By Mike Steely

Senior Writer

The Knoxville City Council approved of a tax break for BNA Associates LLC for the purchase of the historic Andrew Johnson Building Tuesday evening but not without several questions. The 7-2 approval of the 12-year PILOT (Payment-In-Lieu-of-Taxes) saw much discussion.

Councilwoman Lynne Fugate asked if a tax break is necessary and Deputy Mayor Stephanie Welch said that a third party consultant recommends the deal. Welch said the city’s decision is based on the cost of similar projects.

Councilwoman Amelia Parker said that other financing has not been pursued and asked why the city had to take part in a county-owned property. Councilwoman Janet Testerman said the building would have 143 hotel rooms after five years.

Knox County Finance Director Chris Caldwell said that hotel rooms were planned before the pandemic but there’s no funding available to the developer for those. He said the short-term micro-apartments being planned will be converted to hotel rooms.

Councilwoman Seema Singh questioned the use of public funding and said the project should look at private  funding. Welch said “there is a risk” and said BNA will be paying $110,000 per year during the PILOT program.

Councilwoman Lauren Rider noted that the 130,000-square foot facility will have retail, a rooftop bar, condos and apartments.

Parker said she was surprised “to see this to come to council.”

Mayor Indya Kincannon answered saying that any PILOT going over a 10-year window must get council approval.

Councilwomen Parker and Singh both voted against the tax break.

The council also approved various projects to receive COVID-19 funds to assist homeless people. Those include the Salvation Army, Volunteer Ministry Center, YWCA and Helen Ross McNabb Center.

Also approved was the condemnation of two properties to make way for the city’s Homemakers Program. Parker questioned the purchase of the Bogart property for $68,000 and asked about other options for blighted property such as the city using them for the homeless.

During a motion to pass the 2022 Capital Improvement Budget, Parker said that in a recent meeting of Burlington residents she learned they were opposed to the Magnolia Streetscape program and feels the $2 million should be used for economic improvements there.

Mayor Kincannon and the city’s director of community empowerment, Charles Lomax, replied that the streetscape program goes back several years; various public hearings were held on the issue.

Parker said that citizens also objected at another recent meeting called by Neighborhood Coordinator Debbie Sharp on the streetscape program. She suggested the Capital Budget be postponed.

City Council candidate Deidra Harper spoke and said that the streetscape funds should be used for business start ups.

“Streetscapes was what was presented to us—the only option that was given to us,” she said. She called on the council to redirect the funding.

Parker asked what happened to the $626,000 set aside last year for the Burlington Community. She was told the funds will roll over into the new fiscal year.

The council overruled a planning commission decision.  Applicant Benjamin Mullins, representing property owner Ron Welch,  told the council he had requested RN-4 from the current RN-1 zoning but the planners voted, in a split vote, for RN-2.  A multi-family development is planned for the Greenway Drive area near North Broadway.

Mullins said there was no neighborhood opposition and the area is experiencing a growth spurt. The council agreed and passed the change 8-0-1 with Councilman Charles Thomas abstaining.

The council also voted to remove a previous zoning change at Knoxville Center Mall which was passed years ago to permit an apartment complex in the parking lot.

In public forum a downtown resident complained about noise from karaoke bars, joy riders in loud cars and a general rise in noise downtown.