Reining in the PBA and Development Corp.

Let's use elected officials and private developers, not tax money, for projects

For decades the Knoxville establishment has had a couple of organizations it has used to carry out an agenda outside the usual elected government channels. Maybe it's time to reconsider.

There was a time when Knoxville needed a new city hall and the Knox County courthouse was overcrowded. Legislation was passed to create the Public Building Authority and a young businessman named Jim Haslam was tasked to use the agency to construct a new building to house both city and county government. During the 1970s, Haslam "made his bones" as a community leader by shepherding through the construction of the City County Building.

Putting the city and the county in the same building was seen by some as a move to get the two sets of leaders together and ease a transition into Metro government—it had to be a good idea to put the county executive and the city mayor just down the hall from each other on the Sixth Floor. It hasn't worked so far.

Haslam led the governing board of PBA for decades, until he was ousted by allies of Sheriff Tim Hutchison. The PBA, ostensibly the landlord for city and county government offices, was also an entity that could be used for other purposes and its functions have waxed and waned over the years. At times it has been called on to supervise school construction, the construction of the Knoxville Convention Center, and other projects. In some cases, like school construction, it has been accused of being just another layer of management costs on top of the cost of the architect and the developer.

The Knox County Development Corp. is also a legally created entity designed to secretly buy land, then develop and manage industrial parks. It has its own board, though some positions have been reserved for public officials.

The theory of using the Development Corp. is that it allows the purchase of property without property owners knowing it is for government use, and thus prevent the owners from jacking up the price. In practice it means the original owners, usually farmers, do not make a "killing" on the land sale, but it sets up a system for middlemen to secure options and commissions and rake off profits before the county gets title.

Can anyone explain how it cost the Development Corp. $10 million to buy 300 acres of farm land in East Knox County? Really?

Private developers put together tracts of land for commercial purposes all the time. They put their own money on the line, take the risks, and reap the profits. This does not put the taxpayer at risk. More importantly, since it is their money, the developers ensure that the project is feasible, that they have customers and that the enterprise will be successful.

You might contrast the fiasco that is the Midway exit on I-40 with the next exit to the west: the Strawberry Plains Pike exit, developed primarily by Oliver Smith. That exit contains restaurants—from Ruby Tuesday, Outback, Cracker Barrel and Puleo's to Burger King and McDonald's—motels, and service stations. It is a sales-tax cash cow for Knoxville and Knox County.

County Mayor Tim Burchett has proposed a model to have a private contractor build Carter Elementary School and lease it to the county. Private developers can also put together tracts of land for commercial projects, work with national site selection firms, and locate industry.

The private contractors can do this without putting Knox County taxpayers money at risk. Since they are "invested," they will only do projects that work. If private developers cannot make a project work by controlling costs and making it successful, we have to ask ourselves, why should the taxpayers fund such projects?

The PBA should be restructured to just maintain the City County Building. Some restructuring of the Development Corp. is in order to prevent rampant stupidity. Let's put taxpayers back in charge. Let the city and county mayors work with private developers for industrial and business park projects, with final sign-off by City Council and County Commission. Everyone then has an incentive to pursue only projects that will be successful.