A look at some of the issues facing downtown development
by Joe Sullivan
Gestation of downtown development plans to complement the city's new convention center is stretching out. And giving birth to them may prove all the more traumatic.
Early fall had been a target date for unveiling a grand design on which the Public Building Authority has been collaborating for a year with private developers Earl Worsham and Ron Watkins. But it's now looking like December before the PBA's staff will be prepared to submit a set of recommendations to its board of directors. These recommendations, encompassing both private development and supporting public infrastructure, will then be the subject of public comment before the PBA board acts on them. Whatever it approves will, in turn, be subject to ultimate approval and funding by the mayor and city council.
"It's taking us longer to get all of the data that we need to make sophisticated judgments about what will work, that prospective tenants, investors, and lenders will be attracted and that the city will get a return on its investment," says the PBA's CEO Mike Edwards. Economic Research Associates, a Chicago-based consulting firm, is compiling most of the data for evaluation of entertainment, retail, residential, and other components that are integral parts of a total development package.
One also gets the sense that Worsham and Watkins needed more time to get their ducks in a row. "This is a very complex undertaking, and it just takes a lot of time to establish to everyone involved that it's economically feasible," says Watkins.
Further complications loom when the development proposal gets presented to the PBA board and promulgated for public feedback. For one, both Edwards and the PBA's chairman, Jim Haslam II, are lame ducks. County Commission's disgraceful rejection of Haslam's nomination for another term on the PBA board in August was followed a few days later by Edward's announcement that he will be leaving at year end. Haslam may still be able to exert his patriarchal style influence from behind the scenes, or conceivably as an appointee of Mayor Victor Ashe to the board, but Edwards' departure will deprive the PBA of leadership that has both a grasp of everything that's involved and an ability to relate it to the media, the politicians, and the public with a common touch.
The loss of these communication skills will compound the difficulty of getting across a PBA proposal that must be made with one hand tied behind its back. The proposal will identify what types of development are planned throughout a corridor that extends from Gay Street through Market Square to Henley Street northward of Union Avenue (e.g. a cineplex here, other entertainment venues there, along with the locations of residential and retail clusters and possibly a hotel). But it won't get specific about who the tenants will be in each location or their lines of business. The reason is that Worsham and Watkins have a 90 day exclusive following PBA approval to negotiate leases and financing arrangements. Premature disclosures could jeopardize these negotiations and breech the confidentiality of discussions held to date.
"During those 90 days, they are going to be far more at risk than any developer has ever been before; and the public has got to understand that a particular lease isn't going to get signed unless the total package is coming together. Everything is interdependent," Edwards says. But this is a difficult concept to get across to a public that may be prone to question why Worsham and Watkins got an exclusive in the first place, especially considering that they've been paid $250,000 for their work to date on a consulting basis.
So will getting acceptance for city outlays on infrastructure to support the private developments. These could total on the order of $40 million, atop the $160 million that the city has already committed for the new convention center and its appurtenances. New parking garages with 2,500 or more spaces are the biggest part of this infrastructure mix, but it also includes street work and what's now being referred to as a building pad over Henley Street. The pad would be a covered, shop-lined pedestrian overpass to facilitate the movement of people between the downtown area and the convention center on the World's Fair Park site (as well as the much-enhanced park itself).
One possible piece of infrastructure that's certain to stir controversy if it gets proposed involves placing a dome over Market Square. Secrecy surrounds the type of development commitments that could turn on erecting such a dome. But Edwards offers assurances that, "What's done with Market Square depends on what the community wants. Does Knoxville want to dramatically transform its downtown or do we want to preserve more of its present character? PBA and the city don't presume to have the answer to this question."
A groundswell of demand can be anticipated for a participative process in which the citizenry shapes the course of development, a la the way Chattanoogans decided upon an aquarium as the anchor for downtown revitalization. But in Chattanooga's case a very large foundation stood ready to provide much of the funding. No such foundation exists here; those who advocate a bottom-up approach to development decision-making have got to understand that the investments needed to make anything happen will only be forthcoming on a hard-nosed, bottom-line-oriented business basis.
Knoxville is fortunate to have a firm with Worsham and Watkins' wherewithal and civic-mindedness committed to the undertaking. The only other local firm with capabilities for a project of this scope, Lawler Wood, chose not to enter the competitive selection process by which Worsham and Watkins were chosen for their master developer role. It also needs to be understood that they will operating with one hand tied behind their backs during the crucial 90 days they've got to flesh out private development commitments that could approach $100 million. These commitments will be dependent on supporting public infrastructure, but the city isn't prepared to put any taxpayer money on the line until it's satisfied that the developers can deliver.
Crunch time could come about the middle of next year when Worsham and Watkins submit a full-fledged development plan for city approval. "Once the entire deal gets tied together, we've got to show how everything, including the convention center, gets paid for from the tax revenues that will be generated," says Edwards.
The trouble is that Edwards won't be around by then to do the showing. Nor has any successor yet been named, let alone groomed to assume this crucial expository and advocacy role. Worsham and Watkins can't be expected to sing for their own supper, and it would appear self serving and suspect if they did. All of which leads to a conclusion:
Mike Edwards won't you please stay on.
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