Two weeks after Knox County first announced the old Knoxville High School would become a senior-housing facility instead of a mixed-use residential development, North Knoxville residents are still expressing concerns about the project.
On Monday, the Knox County Commission recommended postponing a vote on the RFP from Family Pride and Southeastern Housing Foundation for another 30 days; Commission will have to finalize that postponement at its meeting Monday. Commissioner Amy Broyles suggested the delay, saying it would give neighborhoods more time to gather information. However, if the tenor of discussion is anything like two meetings on Sunday and Monday nights, the former hosted by Broyles, the complaints about the project—and the process—are only going to get more heated.
Family Pride’s general manager, Rick Dover, says he’s not surprised by the blowback.
“I think the response is indicative of how much people care about that building,” Dover says. He’s planning to host at least two meetings in the next month, tentatively scheduled for Nov. 7 and 14, to present even more details about the independent living facility he envisions in the historic building.
And what Dover envisions sounds like a great place to grow old—at least before health concerns require a move to an assisted-living facility or nursing home. He talks about artists-in-residence who teach classes for seniors in the attic (a room that was once a rifle range for ROTC), and monthly pot-lucks or barbecues to bring the public inside.
“We’ll take groups out every night,” Dover says, mentioning trips to happy hour at downtown bars and dinner at nearby restaurants, a different one every time. “We’re expecting something that becomes a hub of activity and buzzes 24-7.”
Yet while the facility will be open to those 62 and above, Dover says the average age of admittees into independent living is well into their 70s. The average length of stay is two and a half years—some residents move, of course, but the majority either transfer to assisted living or to the cemetery. And as Dover admits, “It gets a little quiet after 8. Most of our residents go to bed pretty early.”
This isn’t the only contradiction from Dover. The Family Pride RFP states the facility will create 18 jobs with an expected payroll of $480,000. That averages out to $27,000 per job.
When asked about it at Sunday’s meeting, Dover said there would be 10 full-time employees and 8 part-time employees, averaging $40,000 yearly salaries for the full-time employees, with the exception of a manager making $77,000. If you do the math, that means the part-time employees are making minimum wage. Yet when WBIR talked to Dover after the meeting, he told them, “We would create nearly 20 full-time jobs.”
On Tuesday Dover said he misspoke to WBIR. “That was a slip of the tongue. I meant 20 permanent jobs.” Dover won’t say if he plans on paying above minimum-wage for the part-time kitchen and housekeeping staff either, only commenting that the RFP was “based on Loudon County rates” and pay will go up for Knoxville.
These inconsistencies bother Eric Ohlgren, who lives in neighboring Fourth and Gill and owns property on Magnolia, including Tennessee Valley Bicycles and the Public House.
“Do all developers spin? Absolutely. Do they do it to the level of being this dishonest? I don’t believe so. I am uncomfortable with this guy,” Ohlgren says.
Ohlgren attended both Broyles’ Sunday night meeting and Monday’s Fourth & Gill Neighborhood Organization board meeting, at which Dover and developer David Dewhirst presented their proposals for the high school. Dewhirst’s RFP was evaluated first in all categories except financial; Family Pride offered $500,000 for the building, and Dewhirst offered $650,000 in discounted rent for Knox County teachers, which the county purchasing department scored as zero points.
Ohlgren says he doesn’t think the Family Pride proposal delivers what the Community Design Center report requested. That report, compiled after community and task force meetings, said that senior housing wasn’t the best use for the building and specifically mentioned “low-income housing” in the “Do Not Allow” section.
Part of the reason Family Pride is able to offer $500,000 up front is that Southeastern Housing, a non-profit, is eligible for a Community Investment Tax Credit loan, or CITC, which Citizens National Bank of Sevierville will get on their behalf from the Tennessee Housing Development Agency. The tax credit provides an interest rate of 4 minus prime, virtually 0 percent, but it can only be used on certain things.
According to the THDA (and the original RFP issued by the county), the eligible activities are ones that “create or preserve affordable housing for low-income Tennesseans,” that “assist low-income Tennesseans in obtaining safe and affordable housing,” that “build the capacity of an eligible non-profit organization to provide housing opportunities for low-income Tennesseans,” or “any other low-income housing related activity approved by the THDA Executive Director and the Commissioner of Revenue.”
The THDA defines low-income Tennesseans as “those who are at or below 80 percent of the area median income as adjusted for family size.” In Knox County, that income is $34,000 for one person and $38,850 a family of two. So for the life of that CITC loan, there will be an income cap on anyone who wants to live in Knoxville High School.
Dover says almost all of his current residents in his other senior living facilities, all paying market-rate rents, already fall into that category, as most senior citizens live on fixed incomes. And he says that for the life of the loan—5 to 15 years—he’ll pass his savings onto residents, offering rates of $1,600 to $2,700 per month.
“There’s no caps on what the rents have to be [with a CITC],” Dover says. “We’re choosing to pass that cost savings on. That’s not something we have to do.”
Market rate rents at Dover’s other independent living facility in Lenoir City range from $2,150 to $2,595 for a one bedroom—and they increase a couple of hundred dollars almost every year, we were told when we called and asked about rates at the facility. And the appraisal Knox County requested on the property at the time of the RFP estimates market-rate rents of $2,500 to $4,500 a month, concluding that senior housing is the “highest and best use” for the property, with a possible income of $4.2 million a year.
Family Pride’s RFP only estimates an income of less than $2.2 million, so we asked Donald White, the independent appraiser hired by the county, about the difference in proposed rental rates and income.
“That’s a different number than what they gave me,” White says. He says in his conversation with Dover—White did not examine the RFPs—the Knoxville High School was presented as a market-rate project, and no mention of a CITC or affordable housing for low-income residents was made.
When asked about White’s comments, Dover said he wasn’t really sure what he had said.
“That wasn’t the scope of the appraisal. It’s not germane,” Dover says. When asked to explain how a $2 million discrepancy is not germane, Dover comments, “I can’t give you an opinion on that one way or the other.”
Both the appraisal and Dewhirst’s proposal estimate his project of 75 apartments, three office/retail spaces, 16 artist studios, and an event space would bring in just over $1 million in income per year, so White still would have found senior housing a higher use with the lower numbers.
However, the appraisal doesn’t estimate the economic impact of the development on the surrounding community, just the building itself. Dewhirst remains convinced that his use would do more for the neighborhood than Dover’s.
“We believe the most important use of the building is not one segregating people by income or age,” Dewhirst told the Fourth & Gill board on Monday. “This is going to last 50 or 60 years. I’m asking County Commission to take an informed look at this.”
When Commission members take this up in November, they only have the option to vote the Family Pride proposal up or down. If they vote it down, the project will have to be rebid. At the meeting Sunday, Broyles seemed in favor of senior housing—she got quite testy when Ohlgren and others suggested that it wasn’t a good idea.
“I'm frankly disturbed by the tone of the e-mails I’ve been getting, suggesting that seniors would have one foot in the grave and not be part of a vibrant, active community,” Broyles said. “They’re just as invested in the community as any other age group.”
Commissioner Richard Briggs, who hopes to represent North Knoxville in the state Senate next year, was also at the meeting. He said he had received very little information about the proposal, but the businesses he’s heard from want a mixed-use facility, not senior housing. Commissioner Ed Shouse also attended but didn’t comment on one side or the other.
Neither the Fourth & Gill or Old North Knoxville boards have yet decided whether they will take a stand on the issue. And as Broyles pointed out Sunday, Commission is unlikely to vote something down that brings in money for the county.
At Monday’s Commission workshop, the head of the purchasing department, Hugh Holt, said about the RFP, “At the end of the day, it come [sic] out the way it was supposed to come out.”
Dewhirst’s reply, when asked about the comment: “Well, that’s interesting, isn’t it?”
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