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Seven Days

Wednesday, Sept. 6
City and county officials reject a proposal from the Humane Society of the Tennessee Valley to continue its services after the current contract runs out in December. The city and county are working on a plan of their own to handle animal adoptions and disposal. Under consideration: giant cardboard boxes outside Neyland Stadium on game days; a new economic recruitment slogan—"Knoxville: We Got Puppies!"; talks with Disney about another 101 Dalmatians sequel, tentatively titled 15,000 Cats and Dogs.
County Commission floats the idea of letting voters decide if Knox County's school board should set its own tax rates, then pulls back. Hmm. If we get a referendum, could we mandate remedial math classes for both?

Thursday, Sept. 7
UT employees rally to demand a "living wage." Among those not present: Phillip Fulmer, Pat Summitt, Jerry Green.

Friday, Sept. 8
UT lawyers say they'll fight ESPN subpoenas of student athletes' academic records. As a compromise, they offer a copy of the Vols' 2000 season program. "It's got stats and pictures and everything," one administrator says. "You'd think that'd be plenty."

Monday, Sept. 11
DOE chief Bill Richardson stops in Oak Ridge to pitch a $200 million modernization plan for ORNL. Gov. Don Sundquist says the money would ensure ORNL's future as "a beacon of discovery." Well, we knew it glowed...

Knoxville Found

What is this? Every week in "Knoxville Found," we'll print the photo of a local curiosity. If you're the first person to correctly identify this oddity, you'll win a special prize plucked from the desk of the editor (keep in mind that the editor hasn't cleaned his desk in five years). E-mail your guesses, or send 'em to "Knoxville Found" c/o Metro Pulse, 505 Market St., Suite 300, Knoxville, TN 37902.

Last Week's Photo:
Well, a whole lot of people told us what we wanted to know—that the creatively defaced pedestrian crossing sign was on Neyland Drive near the Alcoa Highway ramps. But we also got reports of the same bit of spraypaint stenciling in at least two other Knoxville locations. Who says vandals aren't industrious? Anyway, the first right answer came from Mr. Justin Helton of Knoxville. For his efforts, he receives a deluxe edition of Britney: Every Step of the Way, a touching photo album compiled by Britney Spears' personal assistant and dental hygienist. (Including "A Special Letter from Britney!")

Meet Your City
A calendar of upcoming public meetings you should attend

Knox County Commission Intergovernmental Committee
Monday, Sept. 18
4 p.m.
Main Assembly Room of the City County Building
The committee will vote on recommendations to the full commission to be made at its monthly meeting Sept. 25. On the agenda: $7.3 million for addition and renovation to the East Tennessee Historic Center; oversight of the Humane Society's animal shelter; and the East Knox County sector plan.

Public Building Authority
Thursday, Sept. 21
5 p.m.
Main Assembly Room of the City County Building
PBA's executive committee meets at 4 p.m. The Board of Directors meets at 5 p.m.

Friends of Haw Ridge
Thursday, Sept. 21
7 p.m.
Life Development Center on Old Edgemoor Road in Oak Ridge
Supporters of Haw Ridge Park in Oak Ridge hope to come up with recommendations for protection and future management of the park.

Abated Breadth

Knoxville might finally have the means for downtown tax abatement. Will it use it?

"As an economic developer, tax abatement just makes my job easier," says Doug Berry, Knoxville's director of development. Used as a redevelopment tool by numerous cities, the process seems deceptively simple.

Laurens Tullock, former head of the city's Department of Community Development and now president of the Cornerstone Foundation, explains: "Let's say a property that now is taxed at $100, if it was renovated might be taxed at $1,000. One possible use of that incentive would be that the tax would remain at $100 for some period of time, let's say five years, and then go up to $1,000. Another possibility would be to graduate that."

Many downtown and center-city advocates feel a tax abatement program could be a useful tool for attracting new development. "The marginal rents in our market, coupled with the uncertainties in rehab costs on historic buildings, tend to make great buildings into difficult deals," says Wayne Blasius, Gay Street property owner and vice president of business development with Denark, a general contractor active in downtown projects. "Any incentive that can help to minimize the developer's risk will push a few more projects off the fence and make them happen."

Standing in the way is state law. Direct tax abatement is unconstitutional in Tennessee. For several years, Memphis has used a Payment in Lieu of Taxes (PILOT) program to successfully work around the state prohibition. But PILOT requires that the developer deed the property to a redevelopment authority. "That's an extremely cumbersome way to do tax abatements," says Tullock.

Knoxville's route through the red tape may lie within the city's Empowerment Zone designation. Nearly a decade ago, when the state looked into the possibility of designating enterprise zones, a law was passed allowing tax abatement within them. In the end the state failed to designate any enterprise zones, but the law remained on the books.

"The law provides an opportunity to explore tax abatement as true tax abatement within the EZ as opposed to the Memphis model," Tullock says. But there are difficulties, the initial one being the differences between the specific wording of "Enterprise" versus "Empowerment." Tullock doesn't see that as a major hurdle, explaining, "There are inconsistencies between the law as originally stated and the program we were ultimately designated for, but the basic concepts are the same." Clearing up the matter would require an interpretation from the state attorney general.

The bigger question appears to be the city's priority on pursuing abatement as a strategy. Last year, after the EZ designation, Tullock says he contacted the administration and suggested they look into it. So far little has happened. Citing development deals already underway, Berry says, "The reality is we haven't had the staff time to do it."

"We're not discounting it," says Mayor Victor Ashe. "It's a matter of figuring out how it achieves our goals—particularly revitalizing downtown—without creating attendant problems." Chief among those problems, according to Berry, is whether giving incentives to owners who fix dilapidated buildings punishes those who have responsibly maintained their property.

"There have been cases where existing owners have challenged tax abatement schemes on the grounds that they're paying more than their fair share of taxes," says City Council attorney Charles Swanson. "But the courts have generally decided that's not the case."

Berry says he's "cautiously optimistic" about abatement but believes some supporters may overestimate its usefulness. "I could see it working for projects of $10 million or more," he says, but he wonders if low-interest construction financing might be more useful for smaller projects. "It might be more valuable to give them a lump sum today rather than spreading out a tax stream over five or 10 years," he says

Tax abatement could potentially be a part of at least one multi-million dollar project proposed for downtown—the Worsham Watkins proposal currently before the Public Building Authority. Contained within the Terms Sheet submitted to PBA by Worsham Watkins International is the statement: "certain tenants may require extended tax abatements as incentives to make their participation economically feasible." The plan suggests "tax increment financing," in which a portion of property taxes are put toward the property's long-term debt. Ashe says he is awaiting a recommendation from the PBA before commenting on the plan.

At the opposite end of the development spectrum, one area where abatement could be useful for small projects is in the low-income residential neighborhoods around downtown, says Sherry Kelly Marshall, executive director of the Partnership for Neighborhood Improvement (the EZ governing body). Drawing on 15 years of prior experience with the Neighborhood Reinvestment Corp., a national organization specializing in neighborhood redevelopment, Marshall says tax abatement is useful in neighborhoods where "lots of people see revitalization efforts as an opportunity to be taxed more.

"Abatement removes the constraint that people impose on themselves because they're afraid to improve their property for fear of higher taxes," says Marshall. She says tax abatement also sends a message: "We want to remove a major impediment that's keeping you from investing in your community."

The Empowerment Zone, as Tullock explains it, may be the path toward true and legal tax abatement in Knoxville. But, as Swanson says, "Just because the vehicle is here, doesn't mean the city wants to take that ride."

—Matt Edens

Haw Ridge Hooted Down

Did scull-duggery scare off a plant?

Earlier this summer, the daily Oak Ridger conducted a reader poll on the possible development of a four-acre lot in Haw Ridge Park for a British manufacturer of racing sculls. Nearly two-thirds of the 2,021 respondents supported the Oak Ridge City Council's efforts to bring Janousek Racing to the park.

But a month later, Janousek officials announced that the company was no longer interested in the location. The primary reason, they said, was opposition from outdoor enthusiasts from as far away as Gatlinburg who use the park's 17 miles of trails for mountain biking, trail running and hiking. Now the park's defenders are being blamed for keeping enterprise out of Oak Ridge, despite a long-standing legal agreement between the city and TVA that limits the park to recreational use.

Adding to the disappointment of development supporters—and giving rise to speculation that the company may not move to Oak Ridge at all—Janousek has deferred on two other potential sites in Oak Ridge. "They basically told us they're not ready to go ahead with their expansion because of a couple of things internal to the organization that they're trying to resolve," says Oak Ridge City Manager Paul Boyer. "But if they do expand, I believe they're coming to Oak Ridge."

Company representatives could not be reached for comment.

But the pro-development crowd is pointing fingers at environmentalists from outside the city for Janousek's reluctance to come to Oak Ridge. "It is, of course, by no means certain that Janousek Racing...has ended its courting of Oak Ridge for a manufacturing site," wrote the Oak Ridger in a Sept. 7 editorial. "What does seem certain is that the company won't be putting down anchor at the Haw Ridge site after vocal opposition mostly from those living outside Oak Ridge who do not pay taxes here."

Development supporters, the editorial continues, can resolve the matter by "coming forward, rolling out the welcoming carpet, and undoing the negative impression so often left by a more vocal minority."

But Boyd Evans, an Oak Ridge resident and founder of the Friends of Haw Ridge, feels that the blame is misplaced. "We were never really anti-Janousek," Evans says. "We just didn't want parts of Haw Ridge chopped off, and we really didn't believe the promise that this would be the only four acres chopped off, especially with all the costs associated with developing the site. It seems strange they would only do it for one company."

In fact, Evans says, the agreement that turned the park over to the city from TVA in the 1970s was the biggest obstacle to Janousek's location in Haw Ridge. The agreement limits the park to recreational use, and any amendment would require substantial legal maneuvering. The Oak Ridge City Council voted to request an amendment to the agreement, but never submitted the request to TVA.

"The only way [industrial development] could occur would be if the transfer document were different," says Mike Crowson, manager of TVA's Melton Hill watershed team. "And the only way the transfer document could be changed is if the property were transferred back to TVA, then transferred back to the city under a different type of arrangement.

"We told the city this would involve a lengthy public review process and possibly an environmental assessment before a recommendation could be made. It would not have been an easy decision."

Friends of Haw Ridge will meet at the Life Development Center in Oak Ridge at 7 p.m. Sept. 21 to discuss future protection of Haw Ridge.

—Matthew T. Everett

The Meadow has Landed

Habitat for Humanity tries something new

Debra Underwood and her husband had been looking for a house for a number of years, but could never afford the hefty down payment or find a reasonable mortgage rate.

About two years ago, the couple got involved with Habitat for Humanity, which helps those on the margins of poverty buy homes constructed by volunteers. Although they'd had the chance to move into some homes Habitat had been building, the couple held out for Easton Meadow.

The neighborhood is the first of its kind in the Knoxville area. Rather than build houses scattered around the city, Habitat is constructing an entire neighborhood. Starting with 20 houses built this week alone, the development will eventually include 50 homes.

"Some of the areas were in bad locations. And for some reason, I just felt like the Lord didn't want me there," Underwood says. "This is home....We thank God for this subdivision every day."

The neighborhood is unique in other ways. Located in East Knox County off of Rutledge Pike, it is the first attempt to build a low-income development in a rural part of the county. While this will give the poor more options in finding a place to live and help to ease the concentration of poverty in depressed urban areas, it could also create problems. For one, the neighborhood isn't connected to any public transportation lines. And as a development entirely of low-income housing, it goes against the current New Urbanist trend of trying to create communities of mixed incomes.

However, residents moving into the community are convinced this social experiment will be a success.

They worked side-by-side Tuesday with some 350 volunteers from 20 different businesses, churches and volunteer groups, fastening siding, spackling walls and nailing up door jams.

Built down a hill off of Rutledge Pike, Easton Meadow looks like any other suburban housing development, built on a dead-end street with no sidewalks. The one exception is the houses are much smaller. Ranging in size from two to four bedrooms, each home has a porch and a utility shed. "The whole philosophy of Habitat is simple, decent housing that people can afford," says volunteer Bill Tapp.

Home owners are given a 20-year mortgage with zero interest, but they must meet low-income guidelines and put in at least 500 hours of "sweat equity," taking budgeting classes and doing volunteer work.

All of the 20 homes being built this week already have owners. In fact, they all know each other and have been planning the community for over a year. Friday night, they will hold a block party to celebrate.

"For the last year and a half, we have bonded," says Mitchelyn Thompson, a bus driver who will move in with her two children. "We know absolutely everyone, and all the children know each other."

"It's not like we're strangers. We're family in the Meadow," she adds.

—Joe Tarr