South Waterfront's Merciful Blessing

Plans for southside redevelopment push forward

Mercy Health Partners' decision to build a new hospital on the site of the soon-to-be demolished Baptist Hospital should prove to be a major boost to South Waterfront development.

Announcement of plans for the new hospital followed close on the heels of the merger of Baptist and St. Mary's Health System into the newly named entity. Upon completion of the new hospital, to be known as Mercy Medical Center, plans call for St. Mary's Medical Center in North Knoxville to be closed—after serving both of the merger partners on an interim basis during construction.

Mercy officials say no decisions have been made about the size of the new hospital, though a range of 300 to 400 beds has been mentioned. At first blush, a consolidated facility of this size seems hard to reconcile with the fact that Baptist and St. Mary's each have more than 400 beds at present (not counting their respective new suburban hospitals of close to 100 beds each in Turkey Creek and Powell, which will remain in operation). But officials reckon that the two center-city hospitals are only staffed to support about half as many patients as they have beds.

Still, that represents about 2,000 employees at each of the North Knoxville and South Waterfront sites. And that's not counting on the order of 600 doctors who practice at each of them, nor their staffs, many of whom are located in adjacent medical office buildings.

Consolidation will no doubt bring a substantial reduction in the merged entity's combined workforce. But it's also safe to assume that the opening of Mercy Medical Center in perhaps 2011 will populate the South Waterfront with a whole lot of additional workers including nurses, orderlies, lab technicians, administrative, food services, and maintenance personnel, and the list goes on. Beyond that, many of the surgeons and other specialists now practicing at St. Mary's can be expected to relocate their offices to maintain proximity with their patients.

It stands to reason that all of this will provide a major boost to the city's South Waterfront redevelopment efforts (though South Knoxville's gain will be North Knoxville's loss). The medical complex should serve as a catalyst for surrounding commercial development including restaurants catering to the diverse work force and retailers such as a florist and gift shop patronized by hospital visitors. Beyond that, with as many more people working on the South Waterfront, at least some of them are likely to opt to live there as well.

Up to now, a single residential project is about all there is to show, other than on the drawing boards, for the city's grand design for a three-mile stretch of waterfront that envisions close to $1 billion in private development over the next 20 years, supported by $150 million in public infrastructure. Atlanta-based Focus Development is nearing completion of a 122-unit condominium complex called Cityview on Blount Avenue west of Henley Street.

Given the depressed state of the housing and related credit markets, one might suppose that plans for any further developments would be on hold. But such is evidently not the case. According to the city's South Waterfront overseer, Dave Hill, as soon as work on the 122-unit complex is completed in August or thereabouts, Focus Development plans to proceed with an additional 60 to 70 Cityview units. However, Focus Development's president, Michael Blonder, says no date has been set for work to start on them.

At the same time, one of the waterfront's largest property owners, Mike Conley, is moving ahead in partnership with builder Mike Stevens on plans for a $58 million, 137-unit condo and townhouse development about a mile east of the present Baptist Hospital. With funding derived primarily from a TIF on the property's increased value, the city is committed to about $10 million in supportive public improvements that include substantial road work, a five-acre park, and a public boat ramp. (A TIF on Cityview is contributing to $1 million in streetscape improvements and sidewalks along Blount Avenue and its environs.)

Erection of the new Mercy Medical Center should put a premium on development of the property that adjoins it—across the approach to the Gay Street Bridge on the east and across Henley Street to the west. By far the biggest tract involved is the seven acres now occupied by Holston Gases plus another acre of surface parking abutting Sevier Avenue that its owner, Bill Baxter, recently acquired. Baxter has been almost sphinx-like about plans for redeveloping his property that would entail relocating Holston Gases, for starters. But he has been quoted in the News Sentinel as saying, "Whatever happens to our property, we want it to be first class, something our family will be proud of.... I'd love to see something incredible happen here that has real staying power."

Mercy Medical Center would seem to be a catalyst for a mixed-use development that would meet Baxter's criteria. m