Developing Momentum on Magnolia Avenue

A group effort fans the flames of a potential East Knoxville business comeback

"East Knoxville is a gold mine for services," says Chris Peas, owner of PBM, a Magnolia Avenue company that leases and services copiers.

By services Peas means businesses like his, ones that don't necessarily rely on their customers visiting them. Peas was at the Knoxville Area Urban League (KAUL) last Thursday, at a meeting organized by KAUL, the Knoxville Chamber, and SunTrust. The meeting was intended to gauge interest in the possibility of a merchants association to represent business owners in that part of town. Judging by the fact that Urban League staff-members spent a good portion of the 90-minute breakfast meeting tracking down and unfolding chairs to accommodate the trickle-in crowd of 80 or so, there is a fair amount of interest.

Peas relocated his business to Magnolia from the Cedar Bluff area a few years ago. He went from one 3,000 square-foot space that he rented for $1,600 a month to another 3,000 square-foot space that he bought on a note that costs him $900 a month.

"We moved here for economic reasons," says Peas. "The area has improved. We're excited. If this association comes to fruition, that will mean more networking. That's just like advertising for someone like me. All my business takes place in other people's businesses. This is a great location. I can be on the interstate and headed west, or I can be downtown, in minutes."

There was a positive vibe to the meeting. That shouldn't necessarily surprise anyone at a free biscuit and coffee event. But if you spend much time along Magnolia and Asheville Highway you know that merchants are an endangered species there, and that on some blocks vacant storefronts outnumber those doing business. There was a lot of Chamber-speak, but Doug Minter, the Chamber's business development manager, kept the conversation down to earth.

"We are one of the friendliest places in the country," he said, citing a Chamber survey of workers who relocated to the Knoxville area over the past five years. "Let's take advantage of that friendliness from a business perspective: friendliness leads to relationships and relationships get you to the point of sale. That means dollars in your pocket."

And while the notion of strength in numbers probably goes without saying, Minter managed to put a cash register cha-ching under that as well. "Associations get the information," said Minter. "And it's early information that allows you to be competitive."

Madeline Rogero, Knoxville's community development director, spoke on behalf of the mayor, who could not attend. Rogero explained that it's much easier for the city to respond to the concerns of an organized group than it is to respond to individuals. She reminded business owners of the city's small business loans and incentives for owner-financed improvements of residential and business properties.

The tenure of Mayor Haslam and Rogero has seen a shift in the philosophy of inner-city neighborhood restoration. Previous administrations concentrated on assisting and encouraging businesses. What's been learned is that there sometimes isn't the residential density to support a business.

Jeff Archer was present on behalf of the MPC to announce that the Magnolia Avenue Corridor Plan had just been completed and could be viewed online. After the meeting, Archer explained some of the recent changes in how Knoxville views neighborhood restoration.

"When we prepared the Martin Luther King, Jr. Avenue Corridor Plan, one of the astonishing things we saw was the actual number of vacancies: 732 homes in that corridor were vacant in 2006," Archer says. "Earlier administrations focused on businesses, but we found there simply weren't enough people to support the businesses. So we've been concentrating on residential in-fill development in that area."

Rogero mentioned the "retail follows rooftops" maxim, and according to Archer, what East Knoxville has experienced is its converse corollary. Archer points to the Knoxville Housing Partnership's new homes in Five Points, and the nearby Clayton Duplexes as examples of progress.

Archer attributes the renewed energy in East Knoxville to a couple factors.

"Business owners along Magnolia kind of gelled when the work on I-40 started," he says. "They had concerns about changing traffic patterns. It appears they've decided to take advantage of that momentum. And there's all this momentum downtown. So the city's been looking at the adjacent arterial neighborhoods."

East Knoxville has had merchants associations in the past, as recently as 10 years ago. Business leaders are hard put to explain why the most recent incarnation petered out, or why so many businesses along Magnolia have closed over that span.

Larry Teffeteller owns The Specialty Shop, the Toro lawn mower dealer on the catbird corner of Magnolia and Olive, and he attended the meeting on Thursday. The Specialty Shop will turn 40 in July.

Asked if he thinks East Knoxville has been left behind compared to the city's attention to other quadrants, Teffeteller says, "I sure do."

He also says that he attributes the shuttered businesses around him more to the economy in decline than to municipal neglect.

"I think the outlook is positive," says Teffeteller. He laughs when asked about the information offered at the meeting, and says it sounds like a rehashing of what he's heard many times before.

"I don't have an answer to that," says Phyllis Nichols, KAUL's president, when asked about the causes of Magnolia's diminishing marketplace. "Small businesses do fail. But they're usually replaced by other small businesses. We saw businesses closing and not being replaced."

KAUL (which also offers low-interest loans to qualifying small businesses) will continue working with the Chamber and SunTrust to cultivate the Magnolia merchants association. Next steps include meetings to organize and choose leaders from the membership, which will allow Nichols and Minter and others to step back and simply be supportive. There will also likely be public meetings in the near future at which Archer and his MPC colleagues will present and explain their plans for the East Knox neighborhoods.

Nichols likes the city's plans for the Magnolia Corridor. But she says that even if the city plants the trees and improves the sidewalks and alters traffic flow as proposed, it's not certain those things will attract people and businesses. She thinks a merchants association, on the other hand, just might.

"The plans are very exciting," says Nichols. "They look good on paper.

"We've been here since 1969. We support small businesses. The reason we want this association here is that an area with a business association is seen by others as welcoming to business. And that's what we want."