Next Big Step: The Quest for Downtown Growth Room

Until the Civil War, Knoxville's city limits coincided with what now constitutes downtown. The natural boundaries were the Tennessee River on the south, First and Second Creeks on the east and west, and the railroad tracks (now Norfolk Southern's) on the north.

But just as the city's rapid growth in the late 19th century led to annexations in all directions, so may downtown's 21st century resurgence beget extensions of its footprint.

As portrayed in preceding columns, nearly all of downtown's existing building stock and few remaining vacant parcels (except for surface parking lots) have been claimed for redevelopment. Many of those surface lots represent prime sites for the construction of high-rises, which would be the optimal use of land to sustain downtown's remarkable growth as a place to live, and would contribute to its vitality in a mix of other ways as well. Yet each new such building that goes up gives rise to a need for more parking garage capacity to support not only its tenants but also the displacement of surface parking space, and at a typical construction cost of $20,000 per space, new garages are anything but inexpensive.

So developers who've been spearheads of downtown's renaissance are beginning to look beyond its confines for sites on which to build or renovate that can still offer the cachet that's become attached to the urban lifestyle. Historic manufacturing plants, warehouses, and terminals as well as blighted properties are all within the ambit of prospective residential stock to the north of the railroad tracks, particularly along Depot Avenue.

As a forerunner of what could be forthcoming across the tracks, the two large buildings on East Jackson that have long housed John H. Daniel Co. are for sale. In the obvious belief that they now have more value as a residential site, the third generation of the Bryan family that has been making finely tailored suits there since 1932 plans to relocate the business to the suburbs. The asking price for the 109,500 square feet of combined space in the adjoining three-story and four-story buildings is $3.5 million, and also includes parking lots with 177 spaces.

Mark Heinz, who has become a partner with developer David Dewhirst in numerous downtown ventures, reckons that the upper floors could support more than 80 dwelling units with retail or night spots on the ground floor in the heart of the Old City. It remains to be seen who will lay claim to them or at what price.

Also on the south side of the tracks, Carl Keaney and Eric Ohlgren, who are partners in Heuristic Workshop, are about ready to start work on a $500,000 renovation of the city's oldest rail freight terminal that was erected in the 1880s. The cavernous, 400-foot-long structure whose gabled ceiling is 29 feet high at its peak, is expected to house some combination of a brewery, a winery, and a distillery with a pub-like atmosphere. The former storage area could well become a distinctive Old City attraction.

Across the tracks on Depot, the handsome Southern Railway Station that was built in 1904 and well renovated for office use in 1990 by architects Glen and Marilyn Bullock is now mostly vacant and for sale. Its 26,000 square feet seem beckoning for mixed-use development.

Dewhirst Properties has already established a foothold on Depot with the acquisition of three buildings that are slated for residential renovation. A portion of the White Lily flour mill that ceased operation in 2008 is due to be converted by next year into 42 apartments, and a smaller adjacent building will contain 12 more units. A third site, which formerly housed the Industrial Belting & Supply Co., was gutted by fire earlier this year, and plans for its redevelopment are uncertain.

A little further north, at the corner of Gay and Magnolia, the building that was long the landmark home of Regas Restaurant is also for sale. And the biggest redevelopment site in the entire vicinity, the 112,000-square-foot historic Knoxville High School, is just a block away. Knox County is expected to issue a RFP in July for adaptive reuse of this monumental building and at least five developers have shown an interest.

Opportunities for downtown extension to the east and west are much more limited by existing housing complexes on the eastern front and by the preservationist Fort Sanders neighborhood as well as UT expansionism on the west. However, a 150-unity upscale apartment complex known as The Landings has gone up recently along the riverfront as an eastern extension of Volunteer Landing. And its Nashville-based developer, Hunter Connelly, has just broken ground for an additional 58 units.

The big question mark is what's to become of the South Waterfront development plans that were perhaps the most ballyhooed undertaking of former Mayor Bill Haslam's administration. The economic downturn, aggravated by the closing of the Henley Street Bridge, has brought these ever-so-ambitious plans to a near standstill. But now the housing market is perking up again and the bridge is due to reopen by year's end. So what can be expected?

The co-owner of the one residential complex built to date says not much—at least until the massive cloud of uncertainty created by the closing of Baptist Hospital is removed. Raja Jubran acquired his interest in Cityview condominiums in a foreclosure sale in 2010, but only six of the 123 units have been sold (while 50 others have been rented for the nonce). Jubran says, "I don't anticipate any further development until the issue of what happens with the Baptist site is resolved."

And when might that be? Well, folks, I'm looking into that but it will have to be the subject of a separate column.