And it is apparently the developer’s responsibility to take a major step forward by the end of the month, according to City Manager Jeff Fleming.
The Kingsport Economic Development Board (KEDB) had a deal last year to sell the fire-damaged former Supermarket Row property to Suwanee, Ga.-based Crossgate Partners LLC for nearly $2 million. Crossgate announced plans to build Town Park Lofts, a four-story building with a variety of one-bedroom and two-bedroom units with floor plans varying from 720 to 1,250 square feet with minimum 9-foot-high ceilings.
Why has this project taken so long?
The sale of the Sullivan Street site never closed. A July 3 contract deadline for Crossgate to close on the property passed.
As a result, KEDB on Tuesday approved a three-year $1.78 million refinancing package for the property that was scheduled to be acted on by the Board of Mayor and Aldermen on Tuesday night.
“In our conversations with the developer and the board of mayor and aldermen, the developer was supposed to have closed months ago, and it’s been extension after extension after extension,” Fleming said at the KEDB meeting.
What’s going on with Crossgate now?
Crossgate has a lender to work with and a general contractor to build the project, Fleming noted.
“They believe they are going to be able to close this week,” Fleming told KEDB. “(But) we’ve heard that so many times. … That’s what they are working toward. They have clearly put hundreds of thousands of dollars into engineering studies, environmental studies where they will not be reimbursed.”
Why are a construction trailer and clearing equipment on the site?
“They wanted to get started,” Fleming responded. “They asked us if they could get on the property to begin demolition. The decision we made was ‘You are so close to the finish line, so if you’re that close, just focus on closing on the property before you start demolishing.’ If for some reason they don’t close, we are positioned to begin demolition on the property.
“The Board of Mayor and Aldermen has sent a clear message to me that this is the last month and anything beyond this month, the (payment in lieu of taxes) agreement would have to be renegotiated. … That’s a strong statement. It needs to end at some point.”
How could this project impact downtown?
Last year, Fleming called the horseshoe-style project “the largest residential investment in Kingsport history.”
The city projected the deal’s total economic impact at $48.3 million (including a $1.7 million retail impact) and estimated it would create more than 400 jobs.
The deal had been worked on since 2012, when the Model City Coalition identified a need for upscale housing. That same year, the KEDB secured a loan to purchase the Supermarket Row site for $1.77 million. The next year, an apartment feasibility study indicated a demand for 250 units at the site. Then, in 2014, the Kingsport Board of Mayor and Aldermen changed the site’s zoning to accommodate high-density apartments.
The project summary also called for a resort-style pool, clubhouse, fitness center, secure access, Wi-Fi connectivity, designer kitchens with granite countertops and 8,000 square feet of retail and restaurant space. The building design called for entrances off Sullivan and Press streets.
Rents at the Town Park Lofts, according to Crossgate, were expected to range from $900 to $1,300 per month.