New Developments: Gay Street is Getting Full

The time could be at hand for Gay Street's missing teeth to get filled in, restoring a full smile to downtown's signature thoroughfare.

By missing teeth, I mean the half-dozen vacant buildings whose renovation would complete the revitalization of Gay Street's eight-block stretch from its viaduct over the Norfolk Southern railroad tracks to its bridge over the Tennessee River. I'm not counting the half-dozen surface parking lots that will remain, some of which could become the site of new construction to complement Gay Street's historic building stock at some point in the future.

The transformation of those buildings from mostly moribund until the turn of the century to mostly thriving has, of course, been a big part of downtown's remarkable renaissance over the past decade. But the projects that will complete the process deserve to be commended—or in a few cases prodded.

Beginning at the northern end, the last remaining hole in Gay Street's 100 block was filled when Nouveau Classics recently relocated its furniture showroom to the building at the corner of Gay and Jackson that once housed the Volunteer Ministry Center. Its developer, Dewhirst Properties, is nearing completion of 70 apartment units that seamlessly extend from that building's upper two floors to encompass two adjoining buildings along West Jackson.

The five-story Century Building in Gay Street's 300 block has stood vacant for several years in not-so-splendid isolation because it's bounded on both sides by surface parking. But a somewhat mysterious entity, Century Partners LLC, recently leased the building with an option to purchase it from owners Sam Furrow and Raja Jubran. An architecture firm, C3 Studio, is due to occupy half of the first floor in June and share the second floor with Architectural Flooring LLC. C3's principal, Gregory Huddy, reports that the other 3,000 square feet of the ground floor is being made ready for a restaurant or retail tenant. But Huddy can't, or won't, shed any light on what Century Partners' plans are for renovation of the building's three upper floors.

Gay Street's biggest eyesore, the boarded-over exterior of the former J.C. Penney building in the 400 block, may soon be restored to its original elegance. The building's owners, a partnership between Dewhirst Properties and Hatcher-Hill Properties, plan to replicate the large arched windows encased in brick that once graced the five-story building's upper floors but with a lot more glass at the ground level. The redevelopment plans are contingent on completion of a deal that's believed to be imminent with fashion boutique Altar'd State to open a store on the ground level and relocate the 23-store chain's executive offices to one or more upper floors. With an Altar'd State lease in hand, David Dewhirst reckons that financing can be secured for an $8 million renovation of the entire 60,000 square-foot building for either office or residential use of the upper floors.

At the corner of Gay and Union, Realtor/developer Joe Petre is set to start work on a $2.5 million renovation of the three-story building that's been vacant since Arby's closed its eatery there in 2010. Petre's firm, Conversion Properties, is acting on behalf of the building's owner, the Johnson Family, that was the Arby's franchisee. But the building, with restaurant space on the ground floor and eight apartments on the upper two, will henceforth be known as Tailor Lofts, honoring the memory of the longtime tenant, Dale Slomski, whose "Slomski Tailor" sign still adorns an upper-floor window.

The largest vacant building—and one that most needs prodding—is the Farragut at the corner of Gay and Clinch. When a San Diego attorney, John Campbell, announced its purchase in 2008, he heralded imminent conversion of its nine floors of mostly vacant office space into 71 apartments. But more than four years have passed, and nothing's happened except for the location of The French Market Creperie in a small portion of the 9,000 square-foot lobby. One reason Campbell might be holding off is to await completed expansion of the nearby State Street Garage, which could provide dedicated parking to Farragut residents.

True, the Great Recession put an especially tight squeeze on real estate lending, but that hasn't kept Dewhirst from proceeding with several other downtown residential developments. And both he and Petre report that the time is now ripe for more. "The banks have worked off most of their bad loans, so they've got money to lend again," Petre says. And Dewhirst reckons that the downtown residential market can readily absorb an additional 250 to 300 units a year, atop the roughly 1,000 that have sprung up over the past decade.

So what's holding Mr. Campbell up? Someone who represents him locally will only say that the long-overdue restoration of one of downtown's finest buildings remains "imminent."

The most problematic of Gay Street's vacant buildings lies one block further south at the Church Avenue corner. That would be the former headquarters of the Knoxville Utilities Board, which were left vacant when it moved to the Miller's Building in 2002. The old KUB building is known to be laden with asbestos and isn't old enough to qualify for the historic tax credits that have helped finance most of the renovations, not to mention that its mostly green brick facade is out of keeping with downtown's historic look.

However, all these deterrents haven't been sufficient to keep David Dewhirst and several partners from acquiring the building. If anyone can bring it back to life, Dewhirst can; and he ventures that "Green buildings are going to be cool," which may be a double entendre.

In the course of getting Gay Street's vacant buildings filled, I've also filled all the space available for this column. So a look at where further downtown development is headed will have to be the subject of my next one.

Added the name of the owner of Slomski Tailor.