The City of Knoxville has been approached by the Knoxville Veterans Alliance, or KVA, about the idea of possibly taking over the lease at the VA Campus. City Manager Harold Stewart revealed that information in a statement this week.
Stewart says the City has worked closely with the KVA for several years, including creating an Urban Renewal Area over the property and signing a Memorandum of Understanding regarding the use of Tax Increment Financing. He notes staff has had many conversations with potential tenants on how their proposed use of specific buildings could work and be successful. However, Stewart notes that those potential tenants always seem to walk away during the lease negotiation process with the VA and KVA.
He explains that there has been no official lease offer, just hypothetical concepts. Stewart also lists several questions the City would consider if an official offer were to occur. These include things like what role the City would play in redevelopment and how infrastructure issues would be funded. You can see the full text of Stewart’s statement below:
Recently the City was contacted by local media regarding questions of recent developments regarding the lease negotiations between the Department of Veteran Affairs (VA) and the Knoxville Veteran’s Alliance (KVA). Below is the City’s response and position regarding the project:
The City of Knoxville Council and staff have been working closely with KVA and the VA for several years in an effort to ensure that the VA Hospital ground is used in a way that moves Knoxville forward. Examples have included the City creating an Urban Renewal Area over the property, and signing a Memorandum of Understanding regarding the use of Tax Increment Financing for the future development of the campus by KVA. Staff has also been drafting a new zoning designation specific for the property that would allow for development as proposed by KVA. At one point the City even explored the idea of moving City Hall to the VA Campus but chose not to due to concern of citizens and downtown business owners. The City is constantly exploring and considering options, concepts and ideas as they come forward on how to successfully redevelop the property. Staff has also had many conversations with potential tenants on the how their proposed use of specific buildings could work and be successful. For whatever reason those potential tenants always seems to walk away during the lease negotiation process with the VA and KVA.
Mike Roberts, representing KVA, did present the idea of the City taking over the lease as a hypothetical concept, but to this point the City has not received an official offer from KVA for consideration. Should the City receive an official offer for consideration there are a few questions the City should consider during the decision process. First, how much of a role should the City take in the redevelopment of the property? How much should the City do and how much should be left to the private sector? Should the City take on the role of owning the property? There are pros and cons to the answers of these questions. Second, if the City determines that it needs to take on the role of owning the property should this be done by leasing the property for 75 years or should it seek permanent ownership? Finally, how does the City bear the costs associated with a project of this magnitude? Will the Federal Government provide funding to address the infrastructures issues facing the project due to years of vacancy and minimal maintenance? The City understands and is concerned about the costs to the community if the property continues to deteriorate, however, the City needs to consider what is the best solution over the long term of the foreseeable future.
At this point the City is trying to do what it can to help KVA successfully negotiate a lease with the VA for the property so they as private developers can take the lead. Should, for whatever reason, this no longer be feasible and viable the City will have to reassess how best to move the community forward while taking into consideration the questions outlined above.