When David Dewhirst moved back to Knoxville from the Washington, D.C., area in 1992, he wanted an urban lifestyle. When he couldn't find a place to live that suited him, he acquired a vacant building at 133 Gay Street and renovated it on his own.
"Every night and weekend for two-and-a-half years I poured myself into it, and it was a great experience that also turned out to be profitable," he recalls. "I was able to cash-flow the building by leasing the ground floor while living in the loft. When you find something you really enjoy doing and make money at it, then you've really got something."
Dewhirst, now 37, didn't immediately drop his day job as international sales manager for Regal Corp, a global distributor of heavy equipment parts. Rather, when he left Regal in 1999 it was to launch his own firm, Cor-Ten, which makes timber guardrail for the National Park Service and many other scenic highways throughout the country.
As a sideline, though, he has continued to acquire and restore downtown property for both residential and commercial use. Today, he owns 24 properties in all, including most of the parcels that comprise the old Watson's Department store on Market Square as well as the landmark Emporium Building at the corner of Gay and Jackson.
Dewhirst's boyish looks and ever cheerful manner stand him in good stead in all his dealings. But along with his people skills, he's also got a reputation for keeping his pencil sharp and driving a hard bargain. Then again, what else would you expect from a UT aerospace engineering graduate who's also got an MBA from SMU.
"I'm not a developer per se," Dewhirst insists, which is why he sought partnerships with those who are in shaping plans for Market Square and the Emporium. At the same time, he's trying to walk a fine line between continuing to identify with his fellow Market Square property owners, of whom he's by far the largest, and collaborating with a newly-formed venture that's seeking to coordinate the square's development.
In some circles, a chicken-and-egg question surrounding downtown redevelopment is which comes first: residential or commercial?
Adam Cohen has no doubt about the answer. "I'm a huge believer that residential comes before anything else. You've got to bring the one before you can get the other," asserts the Birmingham-based developer of urban housing.
"The urban housing market is in its infancy," Cohen proclaims. The boom in residential restoration of historic buildings that started in larger cities such as Chicago and Atlanta is now extending to smaller ones as well.
Cohen got his first start in Birmingham in 1994. His initial, 20-unit apartment project was fully leased within a week of its completion. The affable, balding 38-year-old has gone on to complete 11 other projects totaling 282 units in Birmingham, and within the past year he has extended his activity to Chattanooga, Columbia, S.C. and Orlando.
Knoxville is next. In partnership with David Dewhirst, work is due to start next month on a $5 million, 43-unit restoration of the Emporium at the corner of Gay and Jackson. The construction arm of Mainstream Development Group, with which Cohen is affiliated, is the contractor. "Historic rehabs are really, really tricky," he stresses, perhaps in part to deter competition for what he sees as a prospectively lucrative market.
"We wouldn't be coming if we didn't feel we could put together 500 units within the next five years," he says. "Knoxville has a wealth of old buildings, and I believe we can create most of them from existing stock."
If downtown redevelopment requires a public/private partnership, it's hard to imagine a developer who combines a better understanding of both the public and private sectors than Jon Kinsey. As mayor of Chattanooga from 1997 until this past March, he wrote new chapters into the city's much-ballyhooed success story in which he'd played a major part as a private developer during the proceeding decade.
Now, he's on the verge of bringing his gig to Knoxville as a partner in the only entity in sight that appears likely to respond to the city's Request For Proposal (RFP) for a Market Square coordinating developer. When Knoxvillian Brian Conley first approached him, it was with a view to involve him in attracting a downtown cineplex. Prior to becoming mayor, Kinsey had been instrumental in getting Carmike to locate one in downtown Chattanooga. Their discussions evolved, however, into a joint venture that encompasses not only Market Square but also downtown as a whole.
"Knoxville is at a very opportune moment, a very unique moment, I think, where the city has made significant investments with the convention center and certainly with their initiatives to redevelop the balance of downtown," Kinsey says. "So when I was approached by Brian, I was very interested because it is important to have a local partner team... There's a lot going for downtown, and I think we can make a significant difference here."
The ruddy, 47-year-old Kinsey made his initial mark on downtown Chattanooga with his acquisition in 1989 of the fabled Chattanooga Choo Choo, which had fallen on hard times. By all accounts, he's restored its 325-room Holiday Inn and adjoining shops and restaurants to good financial health. In addition to his role in attracting a downtown cineplex, his accomplishments include both residential and commercial developments in the downtown area.
During his term as mayor, Kinsey championed extension of Chattanooga's redevelopment perimeter into its blighted Southside. One cornerstone was a new conference center in a new hotel.
When private developers sought what Kinsey considered to be excessive subsidies to build the 202-room Chattanoogan, as its known, he committed the city to build the $43 million facility on its own.
The crossfire editorial pages of the Chattanooga Times and the Free Press, now consolidated within a single daily newspaper, don't agree on many things. But they both gave Kinsey high marks for his mayoral performance. "Mayor Kinsey has fulfilled the high expectations of his supporters. He has been full of forward-looking plans. He is honest and frank and open to the people. He has led constructively and unselfishly with substantial success," said the Free Press.
At age 36, Brian Conley presides over the closest thing to a real estate empire in downtown Knoxville. His firm, Cardinal Enterprises, leases and manages more than 600,000 square feet of office space including the AmSouth Bank Building, the Arnstein Building, the Burwell Building, the Charter Federal Building, the Crystal Building, and the Medical Arts Building.
Conley is the considerably younger brother of Mike Conley, the wealthy owner of Regal Corp., a global distributor of heavy equipment parts. The Conleys have acquired their office properties quietly over the past decade along with what may be the crown jewel of their holdings: the vacant block (except for surface parking) on Gay Street bounded by Cumberland and Church Avenues.
That's the block where a new federal courthouse was to be built until the former Whittle Building got retro-fitted for that purpose. Now, the city of Knoxville wants it for a bus and trolley transfer center that would include a 400-space garage for which federal funding is anticipated. The Conleys are amenable to selling, provided they retain air rights for an office tower atop the garage on what's widely viewed as the city's prime new office site.
When Worsham Watkins International unveiled its grand design for downtown redevelopment, Brian Conley was supportive. But when these plans fell by the wayside, he began to think in terms if getting involved himself.
"I don't want to see Knoxville miss this opportunity," Conley says. "Along with David Dewhirst, we wanted to facilitate an experienced team approach to this." That led to discussions with Jon Kinsey which begot a joint venture between Cardinal Enterprises and Kinsey's firm.
Conley has also been a developer in his own right, having built 150 residential units over the past four years. He also owns a choice piece of property at the crest of Summit Hill where he, Dewhirst and their architect friend Buzz Goss are pointing toward building adjacent townhouses.
Leigh Burch is a 1979 UT economics graduate who got involved in the resurgent downtown Atlanta real estate market in the 1980's and started his own firm there in 1996.
"I hadn't set foot in downtown Knoxville since I left college until I was up here for a football game two years ago, and I saw all these really pretty old buildings," he recalls. "I made appointments to tour every vacant building of 50,000 square feet or more, and the Sterchi Building really stood out because its views are unencumbered."
After quickly acquiring the building, the wiry, 44-year-old Burch has spent the last two years attending to the myriad of devilish details involved in preparing for its $9.3 million renovation into 96 apartment units. Codes issues, dedicated parking for tenants and two separate studios of tenant demand to satisfy prospective lenders only scratch the surface of these preparations.
"As recently as a month ago I still had 65 to 70 items on my checklist, but now it's down to four or five, all of which are completely manageable," Burch says. He goes on to praise the city's director of development, Leslie Henderson, for her role in facilitating the undertaking. "The city of Knoxville has been light years easier to work with than the city of Atlanta."
As with the developers of the nearby Emporium, Burch has employed the husband-wife architect team of Buzz and Cherie Goss. "Buzz is not only very capable but really believes in the downtown market," Burch attests. Buzz Goss, for his part, says, "The key to my success has been Cherie."
October 11, 2001 * Vol. 11, No. 41
© 2001 Metro Pulse