by Joe Sullivan
The city is due to get a report from its hotel consultant shortly, assessing the feasibility of a new convention center headquarters hotel. So I should reserve judgment on that, although in my mind it's clearly a matter of when not whether.
In the meantime, the good news is that prospects are looking up for relocation of the State Supreme Court to the downtown post office. That move could free up the court's present block just across Henley Street from the city's new convention center for a headquarters hotel site. In the view of convention marketers in numerous other cities with whom I've spoken, such adjacency is vital to making the convention center succeed.
A state court lease of the upper two floors of the post office (where the federal court used to reside) isn't a done deal yet. But to the credit of all concerned, it's a lot closer to becoming a reality than seemed likely until quite recently. The "all concerned" list has to start with the post office's new owner, Sam Furrow, and includes state officials in Nashville as well as the judges here in Knoxville.
The judges, who preside over appellate courts as well as the Supreme Court, have long coveted the former federal court domain, which would afford them more spacious and stately quarters. But until Furrow recently acquired the post office from the postal authorities, various approaches to accomplishing the move never got off the ground. Even then, it took some initiatives on the part of the state's Department of Finance and Administration to define the terms on which a move would be permitted. The terms were stringent, though: the courts couldn't pay any more in total rent on 47,000 square feet in the post office than a state formula imputes to them on the 40,000 square feet they occupy in their present state-owned building.
"I thought Sam would quit when he heard the numbers we had to work with, but I've really been impressed with the sacrifices he's prepared to make," says Criminal Appeals Court Judge Gary Wade, who's been a point person in the negotiations.
Furrow, for his part, says, "I'm trying to get my cost down to accommodate them on a break-even basis because their present site is a once in a lifetime location that the city had better take advantage of." Auctioneer, auto dealer and a man of many other ventures, Furrow comes across to some as a wheeler-dealer, but no one should doubt his civic-mindedness.
The one thing Furrow is looking for that hasn't been forthcoming yet is the same sort of tax abatement that the city is providing as an incentive for residential restoration of historic buildings in the downtown area. Up to now, such incentives have been limited to buildings that will contain 10 or more residential units. But the post office is historic in its own right, and its renovation to facilitate the relocation of the courts is at least equally worthy of city support.
Assuming Furrow and Wade are able to reach agreement on terms acceptable to the state, the city should then move expeditiously to acquire the block that the present court building now shares with a surface parking lot. In the view of Larry Kirk, assistant commissioner of the state Department of Finance and Administration, "The current building needs to go away." But unless the city moves quickly to acquire it, Kirk says the state will be obliged to refill it with other state agencies whose offices are now scattered. Even if the hotel feasibility study concludes that the Knoxville market won't support a new hotel to complement the convention center until some time in the future, the city ought to latch onto this prime site while the latching is good—if only to level it as a parking lot for a time.
According to Kirk, the court block has an appraised value of $4.5 million. And while he says the state is "more interested in replacement cost," he adds that, "We want to do whatever is in the best interest of the city."
Preserving and enhancing the viability of the Holiday Inn Select and the city's three other downtown hotels also needs to be weighed in any hotel strategy that emerges from the feasibility study now being conducted for the city by Annapolis-based consultant Hunter Interests. Their collective 1,200 rooms aren't nearly enough to support conventions of the size that the new convention center needs to attract, and only the Holiday Inn has the adjacency that's needed for a headquarters hotel. But in the meantime, all of them are much in need of a boost because they have some of the lowest occupancy and room rates of any city in the country.
The Holiday Inn was badly damaged by a heavy-handed city threat of condemnation. But with that threat removed, its general manager, Walter Wojnar, reports that plans are now firm for renovations that will upgrade the hotel to a Crowne Plaza. He won't be pinned down as to the cost but says it's considerably higher than the $3 million that the hotel's owner, Franklin Haney, cited when plans for the upgrade were first announced two years ago. City officials scoffed at that figure as far too low to cover meaningful improvements to the slightly shabby hotel. On the other hand, they spurned overtures by Haney that envisioned a far more costly expansion of the Holiday Inn into a convention headquarters hotel through acquisition of city-owned meeting room and banquet hall space that underlies the hotel. Mayor Victor Ashe remains adamant that Haney can't be trusted, but perhaps a final judgment should be left to the new city administration that will take office at next year's end.
The Hunter Interests study should provide a frame of reference, if not recommendations, for dealing with the host of thorny issues involved in any ultimate hotel decision. But in the meantime it's very good to know that progress is being made toward a Supreme Court relocation that will free up a prime hotel site.
August 1, 2002 * Vol. 12, No. 31
© 2002 Metro Pulse
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