KNOXVILLE, Tennessee — The developer that wants to buy the Andrew Johnson Building from Knox County has hit a financing bump, prompting a delay in finalizing the real estate deal, Mayor Glenn Jacobs announced Friday.
The project for the historic Gay Street building was to include a boutique hotel, apartments and other commercial uses. Knox County Schools is set to move from the old hotel to the TVA East Tower, making way for the A.J. Building to go back on the tax rolls.
Jacobs, however, said Friday in a Facebook post that would-be developer BNA Associates informed county officials last week they hadn't been able to secure financing for the hotel part of the deal.
The boutique hotel is the component county officials are most keen on it because it would create jobs and hotel-motel tax revenue.
According to Jacobs, BNA suggested in the development agreement just doing the apartments and commercial space without the hotel. Jacobs said he can't go along with that because it guts a big part of what was envisioned for the building.
It represents a "substantial change" to what was originally proposed, he said. Accepting such a switch would be a bad precedent, the mayor said.
But Jacobs also said BNA has been a good sport, patiently waiting for several years while county officials and TVA worked out the move to the TVA Tower and while the county pitched the move to Knox County Schools.
"So we have to be fair to them, too," he said.
The county is putting off the deadline for working out a sales and development deal with BNA until December 31.
"Hopefully we ca work it out with BNA. If not, we will issue a new request for proposals for the A.J. Building project once schools are relocated," the mayor said.
BNA got the $6 million bid in 2017 by offering a plan that called for a 94-room boutique hotel and 75 residences. Another proposed feature of the 18-story project: rooftop social space.