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The Pass the Buck Authority

PBA's patch job on downtown development doesn't give the city much to go on

by Jesse Fox Mayshark

"[T]he PBA will work with the development consultants to develop a detailed plan which includes specific tenants and uses, detailed public and private improvements and a financial analysis. The plan will be submitted to the PBA Board for consideration after a period of public input. The PBA will then submit the plan to the city for consideration."
—"Private Development Report on Convention Center-Related Development," Knoxville/Knox County Public Building Authority, March 2000

There's nothing particularly complicated about the preceding paragraph. Leaving aside the misuse of "which" (should be "that," fellas), it's remarkably clear for a piece of bureaucratic prose. It is hard to misconstrue the intent of words like "specific tenants and uses" and "detailed public and private improvements."

And yet last week, the Public Building Authority Board—the same body that approved the above language almost exactly a year ago—endorsed a report from its CEO, Dale Smith, that includes almost none of those things. Well, "endorsed" is probably putting it too strongly. The board, visibly squirmy in the face of the amorphous plan put before it, passed a resolution that "approved [the report] for delivery" to the city. In other words, it postmarked Smith's document and sent it on to the mayor and City Council.

Smith and others at last Thursday's meeting bent over backward to assure board members they weren't actually recommending anything. Both Smith and Mike Carrier (of the Knoxville Visitors and Convention Bureau) tried to soothe any anxieties by saying the board was merely "forwarding" an "option" to the city. (Carrier also bizarrely congratulated the board for "the numerous public hearings you've endured," as if three hearings in one year were an undue burden for a public body.) Alone among his colleagues, board member David Moon at least acknowledged the document "has our fingerprints on it." But even he characterized it disarmingly as "not a plan. It is a work in progress. Really, it is a status report on ongoing negotiations."

Why so shy?

For obvious reasons. The PBA Board knows good and well that Smith's hazy document is full of holes (or, as he likes to call them, "moving parts"). It suggests an office tower and a new hotel, but doesn't have a size for the former or a site for the latter. It recommends that the city pony up $20 million for design work and property acquisition, including acquiring control of the ground level of all the buildings on Market Square (by force of law if necessary), but names not one single tenant for any of the space.

Moreover, the "financial analysis" referred to in that March 2000 clause raises all sorts of questions—questions that it's hard to believe anyone had much time to consider, given that the report was made available just 27 hours before the PBA Board meeting. The analysis, prepared by Economics Research Associates, makes estimates of how much the city would spend versus how much it could expect in increased tax revenues for six different "scenarios." Only one of them actually meets the original goal of producing enough revenue to pay the debt service on the proposed city investment—and that one deletes the hypothetical "destination attraction" (which ERA says is necessary to produce crowds for the rest of the development) and supposes a hotel at a "new site near [the] convention center." Since no such site has yet been identified, and all of the possibilities (the UT Conference Center, the state Supreme Court Building, a Poplar Street pad) are full of potential political and geophysical land mines, it's not a lot to put your faith in.

And yet faith is what Smith and his designated developers, Worsham Watkins International, are demanding. If the city goes ahead with its $20 million appropriation, they say, they can start to fill in some of the details that were supposed to be present long before this point. The PBA Board (which, it should be noted, has turned over nearly half its membership during the course of this project) should have asked for more. As the city's chosen agent for the convention center and all related development, PBA has a responsibility—and is being paid in public dollars—to provide expert advice. The board is made up of people with a range of experience in real estate, finance and development. It is much better equipped to evaluate the nuances of the proposal than almost any member of City Council. The board members' reluctance to ask difficult questions, and their willingness to simply pass on an expensive, ill-defined, half-formed plan, is a dereliction of duty.

It doesn't mean they (or Smith, or Worsham and Watkins) are badly intentioned. But we all know where good intentions can lead us. Worsham and Watkins have failed to deliver to Smith an actual defined plan, let alone one that works even in a strict financial sense; Smith in turn failed to deliver one to the PBA Board; the board has now failed to deliver one to the mayor.

Whether Ashe will continue the chain by "forwarding" PBA's mess to City Council remains to be seen. He has scheduled a public hearing for 5 p.m. on March 8, in the Small Assembly Room of the City County Building. Presumably, he thinks not enough people are interested (in the most expensive, expansive city project in decades) to fill the Main Assembly Room. If he's right, then none of the above failures are likely to be corrected. And the buck will get passed to all of us, with an IOU attached.

March 1, 2001 * Vol. 11, No. 9
© 2001 Metro Pulse