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TN Democratic Party calls for investigation into purchase of Knoxville building

9:26 PM, Dec 19, 2012   |    comments
The old Philips Magnavox building is now home to Pellissippi State Community College (Wade Payne/Thunderhead Photography) / Wade Payne
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By Walter F. Roche Jr. / The Tennessean

The chairman of the Tennessee Democratic Party is calling for an investigation by the state Comptroller of the state's "deeply troubling" purchase of a Knoxville property from a business associate of the governor's family.

In a letter to the comptroller, Chip Forrester, the party chairman, said that the $10 million purchase price for the office building for use by Pellissippi State Community College may have defrauded Tennessee taxpayers of more than $5 million.

Citing a Sunday report in The Tennessean, Forrester noted that some estimates put the cost of completely renovating the building at 7201 Strawberry Plains Pike at $16.6 million.

"We Tennesseans detest crony capitalism, where well connected businessmen use their political clout to increase their company profits at the expense of taxpayers," Forrester wrote in the letter.

The Tennessean reported that the partnership that sold the building to the state was headed by Samuel F. Furrow, a Knoxville auctioneer and developer who has had a past business relationship with Gov. Bill Haslam.

Records also show that James Haslam II, the governor's father, loaned Furrow's wife $1 million when the purchase of the Knoxville property was under consideration in 2011. Records show that loan is still outstanding. The collateral is a Nantucket property owned by Ann Furrow. Samuel Furrow was formerly a co-owner of the property but deeded it over to his wife prior to the loan.

"The findings revealed in the newspaper article were deeply troubling," Forrester wrote in the two-page letter.

He added that Tennesseans "deserve absolute disclosure on this suspicious land deal and a full explanation why we paid $10 million for a property the county assessor valued at $4.4 million.

Furrow had told The Tennessean the sale was "clean as a whistle."

The governor, through a spokeswoman, has said he was not aware of his father's loan to Furrow's wife. She also said that the governor does not have any current business relationship with Furrow. Forrester also noted from The Tennessean story that an associate of Furrow's emailed a top Haslam aide late last year in an attempt to make the state purchase of the long vacant property a priority and get it done before the end of the year. The sale, however, was not finalized until March.

A portion of the building is now being used for some community college classes and other portions of the property are expected to be leased to the state General Services Department as part of a state office consolidation project.

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