(WBIR – KNOXVILLE) Gov. Bill Haslam and state leaders announced on Friday afternoon plans for the relocation of the site of Regal Entertainment Group's headquarters to the South Knoxville waterfront.
The company's headquarters are currently located 10 miles away from that, in the Halls community.
Haslam said Regal has the intentions of adding approximately 70 new jobs with its relocation.
Local and state government are set to give a combined $12 million as part of the move. That includes $1.5 million from the state, $1.5 million from Knox County, and $9 million from the city of Knoxville. Regal will pay an estimated $4-5 million in renovations.
In late 2013, Tennova Healthcare sold the site of the old Baptist hospital to Georgia-based developer Blanchard & Calhoun Commercial Corporation for $6.25 million.
Blanchard and Calhoun, which has since changed its name to Southeastern Development Associates (SEDA), plans on using the site to build a mixed-use development called "One Riverwalk." That includes retail and housing, plus a public space with a riverwalk, connecting the Gay Street and Henley Street bridges on the south side of the river.
Pending approval from the city council, Knoxville's Industrial Development Board (IDB) will purchase from SEDA for $6 million the nine-stories-tall, 178,000 square-foot building that still stands on the site. That building, as property of the city, will then be removed from the TIF agreement between SEDA, Knoxville and Knox County.
The $6 million building purchase also comes with the use of approximately 450 parking spaces in the adjacent Blount Avenue parking garage, which will be jointly owned by SEDA and the IDB.
The remainder of the South Knoxville site still belongs to SEDA, which plans on proceeding with its "One Riverwalk" development.
Renovating the building will cost an estimated $10 million to $11 million. Of that, the state will pay the above-mentioned $1.5 million (pending approval from the State Funding Board), the county will pay $1.5 million and the city will pay $3 million, having already footed $6 million to purchase the building from SEDA. Regal, then, will pay for the remainder of the renovation costs, which will be between $4 million and $5 million. That number could go up for Regal if renovations beyond initial projections are required.
Additionally, SEDA will put $500,000 toward exterior improvements to the building and TVA will kick in approximately $80,000.
All of this comes with a time commitment from Regal. Knoxville's Industrial Development Board will lease the building to Regal for an initial lease term of 10 years, with two extension options of 10 years each.
As part of the agreement, Regal will pay no rent for the first decade. It will, however, during that time pay the IDB an amount equivalent to the combined assessed city and county property taxes on the building. If Regal decides to renew after 10 years, it will then pay an annual rent of $178,000 ($1 per square foot). If it renews another 10 years after that, Regal will pay $356,000 annually ($2 per square foot). Regal will also have the option to purchase the building at any time during the agreement. That purchase price depends on how long the company has been in the building.
The agreement also includes drawbacks for Regal if the company fails to maintain a workforce there of 275 people or stops using the space as its corporate headquarters.
Two protesters also were at Friday's announcement, chanting "Tennessee is not for sale" when Haslam began speaking. Security officers quickly removed them from the event.
"We would not be here today without the partnership and the support of the state, the city and the county," said Amy Miles, CEO of Regal Entertainment Group.
Tennessee Department of Economic and Community Development Commissioner Randy Boyd also spoke Friday. Boyd grew up in South Knoxville.
"I hate to be too melodramatic, but it was kind of like a Phoenix from the ashes," Boyd said of Knoxville Mayor Madeline Rogero's plans for the relocation. "From this rubble was going to be something that is going to be transformational for South Knoxville."
Knoxville mayor Madeline Rogero, along with Knox County Mayor Tim Burchett, also thanked a number of city, county and state government officials during the news conference.
