KNOXVILLE, Tenn. — The Knoxville City Council met Tuesday to discuss an agenda that could result in redevelopment projects along East Magnolia Avenue. One of the proposals included a plan to redevelop four structures along the road from 57 "substandard" apartment units into 57 condos.
Another proposal approved a "Payment In Lieu of Taxes" program to redevelop the historic Swan Bakery building also located along East Magnolia Avenue. Developers said the building would be used to support job training through KnoxWorx, a program by the Knoxville Leadership Foundation.
The city will also decide whether to spend $700,000 to buy property in the Burlington community to build a new fire station.
More information about some of the most significant proposals at the meeting is available below.
The Knoxville City Council decided to spend $700,000 to buy property at 3924 Asheville Highway and 54017 Martin Luther King Jr. Avenue from Skapa Properties, LLC.
The properties are located in Burlington, within one block of the existing Burlington Fire Station. The property would be used as the site of a new fire station for the community after the city council also approved funding for its design and construction.
Cynthia J. Finch, President of the Burlington Business District Association said the projects are meant to help make people want to come to Burlington.
Some business owners in the area also said the projects are important to change the image of East Knoxville.
"We want to build up East Knoxville all over again and have a positive place to come instead of negativity all the time on East Knoxville," said Earnestine Bates Harris, the owner of Bates Barber and Beauty Salon.
"We know that when you push from the bottom, everybody rises. So we are pushing from the bottom here in Burlington. We're pushing up structures, streets, lights, businesses, opportunities everywhere," said Finch.
The purchase was previously approved by the Land Acquisition Committee on Nov. 15. Council members would also need to pass a budget amendment on Dec. 12 to approve the purchase.
The proposal passed on Tuesday.
Knoxville City Council also discussed whether to approve a project redeveloping four historic structures along East Magnolia Avenue. The four buildings were bought by developers in 2023, according to the city council, and are named the "Aston, Lakewood, Shenandoah and Graham buildings."
According to the city, the buildings were in "significant disrepair and have contributed to blight along parts of the Magnolia Avenue corridor." The Courtland Group proposed turning the building's 57 apartments and converting them into 57 condos which would be put up for sale, according to the city.
Around eight apartments in the Graham building would stay available for rent after the project as workforce housing. According to the developer's application for assistance from the city, the condos would be priced for first-time homebuyers.
The city said the condos are projected to be sold for around $255,000, affordable for a two-person household with an annual income of up to 130% of the area median income, or around $21 per hour per person. The apartments would have rent restricted at 80% of the area median income for a decade.
"Implementation of the Plan is needed in order to allow for, among other things, the use of a $500,000 tax increment financing grant which has been requested by the Developer to make the Redevelopment Project economically feasible. The Plan will contain tax increment financing provisions in connection with the renovation and preservation of the existing improvements located in the Redevelopment Area," the city said.
The city said developers spent around $13 million on the project, including $8 million on construction costs.
"A tax increment financing grant in an amount not to exceed $500,000 is necessary to make the project economically feasible for the Developer. As has been the typical practice in connection with similar incentive requests, a third-party review of the financial projections relating to proposed Redevelopment Project was undertaken by MuniCap, Inc. at the request of the City and KCDC," the city said.
The proposal passed on Tuesday.
Knoxville City Council discussed whether to approve a PILOT program on a $8 million redevelopment project on East Magnolia Avenue. Through the program, the city would take ownership of the property and lease it back to developers instead of the developers having to pay property tax.
It's a common kind of program used to incentivize development in areas across the U.S.
Swan Bakery is located at 1801 East Magnolia Avenue and has a significant history in the area. It's located on 1.6 acres of land within walking distance from downtown Knoxville. The bakery was established in 1883 and started operations in 1928, before closing in 1991. Half of the building is currently leased by a construction service firm and the other half is vacant, according to the city.
According to an application for the PILOT program, the Knoxville Leadership Foundation would use the building for its KnoxWorx Workforce Development program. The foundation would expand its vocational trade school, giving people a chance to develop skills and obtain credentials for different jobs.
KLF is a faith-based, nonprofit organization that provides mentoring, workforce development and outreach programs among several others. It also plans to lease space in the building to the company already located there for warehouse space and will lease a small part for office use once the building is renovated.
"The $8 million redevelopment project includes a $4.5 million renovation of the existing building which will include new roofs, windows, interior mechanical systems, the build-out of new offices, life-safety upgrades and other improvements. Upon completion, the building will serve as the main office for Knoxville Leadership Foundation’s KnoxWorx program which provides education, employment mentoring, vocational job training services, and industry certifications to some of Knoxville’s most at-risk citizens, including those who have been previously incarcerated," the city said.
The PILOT would have an initial term of five years, following a two-year construction period. It could last another five years based on proposed improvements and its uses. It would need to pay $26,587 total per year as the annual PILOT program payment.
The proposal passed on Tuesday.