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Knoxville City Council meets votes for Old City hotel, smoking and vaping in city-owned parks

Knoxville City Council will decide on whether to ban tobacco products in city-owned property like greenways, and whether to build a hotel in the Old City area.

KNOXVILLE, Tenn. — Knoxville City Council is meeting on March 8 to talk about whether using tobacco products should be legal in city-owned property, whether they should sign onto a payment-in-lieu-of-tax agreement for a new Old City hotel and whether they should build new recreation facilities from the old Willow Cottage property.

The meeting starts at 6 p.m. in the City Council Building. You can read more about some of the proposals below:

Building public recreation facilities on Willow Cottage property

The city council will talk about whether to build new public recreation facilities on the property located at 6430 South Northshore Drive, known as Willow Cottage. They said it is the last piece of property at Lakeshore to be transferred from state ownership to city ownership.

They said crews would then demolish the building as part of the phased construction of recreation facilities at Lakeshore. The property is being donated to the city, and any costs stemming from the project would come from the demolition process. They will not need to pay for the property itself.

The property is around an acre large, according to documents. The resolution also says that Knoxville and Tennessee previously entered into an agreement saying that if the state chose not to build another regional mental health institute on the property, it would be transferred to the city.

Banning tobacco and vapor products on city-owned parks

City council members will talk about whether they should prohibit using tobacco and vaping products in city-owned parks, playgrounds, greenways and other kinds of property.

They said in May 2021, Governor Bill Lee signed a law that allowed local governments to prohibit tobacco products on public parks and other kinds of public property accessible by younger people.

In the resolution, they said the ordinance would expand a previous prohibition on smoking on playgrounds owned by the city to include vaping products and to include other locations.

If passed on second reading, the new law would take effect immediately. The prohibition would not apply to sidewalks or roads owned by the city.

The motion passed on first reading Tuesday.

Building a hotel in Old City

Councilmembers will discuss whether they should sign onto a "payment-in-lieu-of-taxes" (PILOT) program with Old City Ventures LLC to build a 127-room hotel at 210 East Jackson Avenue.

The program is normally used by companies looking to build in the area. Through the program, a city board would technically own the property and lease it back to developers after it is built for the entire term of the program. If the developers default on payments, then the project is returned to traditional tax requirements.

To participate in the program, developers must give information about how many jobs they expect to create and how much those employees will make, as well as how much they are investing in the project and how it affects the nearby environment. PILOT programs typically last for a maximum of 15 years.

Officials said developers would spend around $21 million on the project and parking would be available on a separate property owned by Old City Ventures LLC. They said they expect to build on a neighboring tract of land in the future and may build "structured parking" to accommodate parking needs.

Developers said they intended to build the hotel even if the proposed stadium near Old City was not built. City officials recommended signing onto a 10-year PILOT program with the company, starting after a construction period lasting up to 3 years.

Developers are expected to pay around $285,000 annually in property taxes once the PILOT program ends.

The hotel would be a Springhill Suites by Marriott and would be built on an area that is currently parking lots, near the Barley's restaurant. Officials said it would include a swimming pool, fitness center and event space.

A study from MuniCap said the hotel would also help "improve the appearance of a partially vacant section of Knoxville" since it would be built alongside a major highway.

The study also said they expected hotel rooms to costs more than $135 per day for visitors and expected revenue from rooms would exceed $5 million in 2027.

Councilmember Seema Singh criticized the project, saying that the PILOT Program helped boost developer profits without information about wages for workers that would be hired. She also said she was concerned about policy restrictions on how taxes from tourism projects could exclusively support the tourism industry.

"I don't think we can do business the way we always have. Knoxville has 30% poverty, and this trickle-down theory," she said. "I don't know if this helps the people that it really needs to help."

However, Lynne Fugate said she approved of the project because it would lead to higher tax revenues.

"No bank will lend them $20 million unless the project is profitable," she said.

The resolution passed.

2022 Youth Violence Prevention Week Micro Grants

City council members will also discuss giving out thousands of dollars to community organizations to fund programs during the spring. They said the money will begin around April 25 and the grants total around $23,070.

The organizations are listed below:

  • Girls, Inc.: $2,500.00
  • Muse Knoxville: $2,900.00
  • YWCA Knoxville and The TN Valley: $2,670.00
  • Karate Five Association:  $3,000.00 
  • My Daughter’s Journey: $3,000.00
  • Shora Foundation:  $3,000.00
  • The Bottom:  $3,000.00
  • Forget You Not:  $3,000.00

The grants were given as part of an effort to give youth across the city more opportunities to positively spend their time, steering them away from possible violence.

The motion passed.

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