UPDATE 5/13/15: James Reese, chairman of the Knoxville College board of trustees, said Wednesday morning that the board did not vote on the Southeast Commercial deal on Tuesday night. He says the board might be gathering more information and would be announcing its next steps within the next day or so. 

The Knoxville College board of trustees may vote tonight on whether to sign an exclusive contract with Knoxville construction firm Southeast Commercial to redevelop the college’s 39-acre property in Mechanicsville, says board chairman James Reese. Although trustees discussed the proposal at a long meeting Friday, they lacked a quorum to vote, he says. Reese expects a quorum for a board conference call tonight “and hopefully we’ll emerge out of that with something,” he says.

Although other news reports have indicated the board is still considering multiple proposals, Reese says Southeast Commercial is the only one being discussed. No other formal proposals were received.

“Somehow the image was that we weren’t willing to work with other developers,” Reese says. “We were totally open…. We did not solicit offers, but anybody who wanted to talk with us about the possibility was received.”

Two other groups showed interest, Reese says. One was a partnership between Mechanicsville residents Robert Marlow and Scott Sherrill; Marlow has publicly expressed disappointment that his team was given no more than eight days to put together a formal proposal once he learned about the impending Southeast Commercial deal, which had not been discussed publicly. (Knoxville College did not issue a request for proposals, a process non-profits and governments often use to drive competition for better proposals and to avoid the appearance of favoritism.)

Reese declined to name the other group that expressed interest in redeveloping the college property. 

Gaining (or Losing) Momentum

Why the hurry? Reese says it’s important for the college to build momentum toward improving its condition quickly. “A real concern is the longer you delay starting renovation, the more people feel you’re not going to do it at all,” Reese says.

The historic college, founded in 1875 to offer higher education to black students, produced many community leaders. But with enrollment and funding steadily declining for decades, it lost its accreditation in 1997 and shifted from one president to another in quick succession since 2005. (It currently has none.)

The college announced in April—after receiving the Southeast Commercial proposal in March—that it would suspend classes after spring semester. Reese says the goal is to resume classes in fall of 2016, but for that to happen, donors must contribute significant funds and the college must convince the Tennessee Higher Education Commission to let it begin recruiting and enrolling students again. The commission voted to put Knoxville College on “conditional authorization” after the announcement that fall classes were cancelled.

“It’s very difficult for some people to see you’re going to continue to be a college if you don’t have any classes,” Reese says, pointing out that the college still pays some staff salaries and utilities and needs to at least try to maintain the buildings, many of which are in terrible disrepair.

Reese says alumni are more likely to make donations toward the college’s recovery if they see concrete improvements happening on the ground. “It will be a big boon to the college,” he says. “The sooner we can say this is going forward, the sooner people will respond.”

However, the Southeast Commercial deal will not provide the college with any up-front payments that it can apply toward its debt, Reese says. “We haven’t talked about money,” he says. The college owes the federal government around $1 million—as well as almost $6 million to Foundation Capital, according to a March 5 facilities assessment by college officials.

A March 16 version of the agreement as proposed by Southeast Commercial would basically give the developer a year to work out a plan for what kind of development to offer at the site, how to fund it, how to negotiate with the college’s creditors, and other details. During that time the college would not rent or sell its property or work with other developers. The document, which is an early version of the agreement, doesn’t discuss any payments to the college or the developer.

Southeast Commercial has developed or redeveloped high-profile hotels and commercial ventures in Knoxville, including the Hilton, the Marriott, the downtown YMCA, Dunhill Apartments, the Knoxville Expo Center on Clinton Highway, and National College.

Marlow says his competing proposal, which failed to solidify for lack of a developer, had lined up $6 million from investors to satisfy debts on the property—if his team had been awarded the job and had been able to clear the property title so his investors could take priority lien.

Footprints

The March 16 version of the master-developer agreement with Southeast Commercial states that the college will consider public development incentives and tax financing as part of the project. The document repeatedly refers to low-income tax credits, which the college has also identified as a “potential funding opportunity.” Some (including Marlow) have questioned whether low-income housing is the best direction for the property.

Art Cate, director of the Knoxville Community Development Corporation, says there are 571 public housing units at three developments within a little over a mile: Mechanicsville, Passport Homes (which together cover the footprint of the old College Homes public housing) and Western Heights.

But on paper, at least, there seems to remain plenty of demand. The wait list for Western Heights and Mechanicsville units is 1,234 people; for Passport Homes, it’s 129. Those awaiting a two-bedroom apartment may be on the waiting list two to three years, Cate says.

In the zip code that includes Mechanicsville are 306 privately owned housing units that accept Section 8 vouchers (a public subsidy), Cate says. The Section 8 waiting list for the county is closed because it has more than 1,000 people, he says.

Despite these statistics, Cate notes that a developer considering housing in Mechanicsville would probably still want to conduct a market study.

David Dewhirst, who has successfully redeveloped many historic Knoxville properties, says, “If you were to include only low-income housing because it has tax credits and is easier for the developer, I think you’re asking for some significant social problems in the future. And that’s not to anyone’s advantage.” He suggests that mixed-income housing and walkable mixed-use development would be best.

Dewhirst notes the “enormous impact” the project could have on Knoxville because of size of the 39-acre campus and how close it is to downtown. “You could screw it up and ruin it for 50 to 60 years, or you could use it to make a place people would want to work and play.”

Dewhirst cautions that he doesn’t know anyone in the region (including himself) capable of developing a project of that scale effectively. He says considering a wider spectrum of approaches and developers might bring about a better result.

“This is a pretty large-scale endeavor, and I’d hate to see the board make a decision on what they think is the quickest and easiest life preserver thrown to them when that’s not what’s best for the college long-term,” he says.

Reese says other aspects of the agreement are still being negotiated, including how much of the land would be available for redevelopment. He says the college wants to maintain ownership of the “footprint of Knoxville College,” which includes the campus “from the alumni gym and the Harvey Center forward” and a portion of the college listed on the National Register of Historic Places. (Among the buildings that would remain as part of the college would be the chapel, library, Elnathan Hall, and the administration building, Reese says.) The college wants these renovated as part of the deal with Southeast, and it’s “a big part of the negotiations,” Reese says. “The developer would probably find it to his advantage to have some relationship to that renovation because it will affect the image of the rest (of any new development).”

Even though the redevelopment would leave the college without any dormitory or classroom buildings, classes could be held in the remaining space in the administration building, the library, and the educational wing of the chapel, Reese says.

Not a Dismal Note

Already this year, the campus could not accommodate its tiny commencement ceremony for three graduates. Held Saturday at a church a few blocks from campus, the ceremony was upbeat and hopeful as any other, Reese says. “There was not a dismal note,” he says. “Other than the number of graduates, it was like any other commencement we’ve had in 104 years.”

Reese says the college sent a letter to alumni requesting donations a month ago, but he doesn’t yet know what the response has been. The college’s tough past year—the end of classes, two college president changes, the condemnation of the administration building and last functioning dorm, and a federal Environmental Protection Agency cleanup of chemicals in the former science building— has not led to a flood of worried or angry calls from alumni, Reese says. Instead, these changes have been met mostly by silence. That lack of response is what troubles Reese.

He and his fellow trustees are tasked with getting out good news about the college among so much bad. But he says it helps every time the city acknowledges the college as one of its gifts. Reese says he might suggest creating a Knoxville College support committee to help boost the college’s profile, and asking Mayor Madeline Rogero to appoint a city representative to serve on it.

Mayor Rogero met Friday with representatives from Knoxville College to discuss their efforts at campus preservation and redevelopment. In a prepared statement, Rogero said, “I encouraged them to engage the community early and often to ensure that whatever development might occur is an asset to their neighbors in Mechanicsville.”

In the March version of the Southeast Commercial agreement, it would be up to the developer to determine if it needed to hold community meetings to share information about any redevelopment plans with Mechanicsville residents.

In terms of improving the college’s communication with local residents, Reese says the college used to send a representative to Mechanicsville Community Association meetings in the past. “We would be committed to doing that again,” he says. “I would think that would be one of the first things we would do as soon as students are back on campus.”

The soonest that might be is fall 2016. If Knoxville College inks a deal with Southeast Commercial, work is projected to begin within a year.

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S. Heather Duncan

S. Heather Duncan has won numerous awards for her feature writing and coverage of the environment, government, education, business and local history during her 15-year reporting career. Originally from Western North Carolina, Heather has worked for Radio Free Europe, the Institute for War and Peace Reporting in London, and several daily newspapers. Heather spent almost a dozen years at The Telegraph in Macon, Ga., where she spent most of her time covering the environment or writing project-investigations that provoked changes such as new laws related to day care and the protection of environmentally-sensitive lands. You can reach Heather at heather@knoxmercury.com