Holston Medical Group entered a 41-year lease last year on the land, owned by Stewart Taylor, which borders North State of Franklin Road and West Market Street. The property totals 8.6 acres, and Taylor had reserved about 2 acres at the road intersection for a Walgreens pharmacy or some other commercial use.
HMG’s president and founder, Dr. Jerry Miller, said the decision to withdraw boiled down to two factors: the group’s geographical focus and a tough economy.
“We put a lot of research into our potential over there, how we could work closely with the hospital system (Mountain States Health Alliance), and what does the community really need,” Miller said.
“As we modernize, most of our service area is (north) of Interstate 81, so what we decided to do is aggressively pursue the Abingdon area, the Bristol area and the Duffield area.”
Miller said he expects the site, which is zoned MS-1 (medical), to house something akin to HMG’s plans someday. He said numerous health care businesses, from pharmacies and insurance providers to medical equipment outfits, expressed interest in occupying the site as HMG studied it.
“It’s ideal to build at that site,” Miller said. “The access is just unbelievable, the proximity to the tertiary setting (JCMC) is right there, and I guess if it hadn’t been for the economic downturn and some of the dismal projections for health care, we might still be pursuing it.”
HMG’s decision is the latest in a string of delays in development of the property, which used to house a Tennessee Valley Authority operation.
City Commissioner Steve Darden said Tuesday he believes the land would have been developed long ago had the Johnson City Commission approved a zoning change from R-4 (residential) to MS-1 (medical) when MSHA had an option to buy the property from TVA. The change passed on two readings, but then-commissioner C.H. Charlton reversed his vote on the final reading. (Darden and Duffie Jones supported the change.)
The property also drew attention for the handful of large beech trees that sat in front of the TVA building, with a “Save the Beeches” initiative playing into the zoning decisions.
After the first zoning decision Taylor, a Kingsport businessman, outbid the city by $100,000 in December 2003, paying $3.1 million for the land, but didn’t move forward with serious site plans until the Johnson City Commission finally did rezone it to MS-1 in May 2007. Taylor cut the trees after purchasing the land.
“Holston Medical Group certainly appeared to be the type of user that would be consistent with the commission’s vision of a medical presence on that land,” Darden said. “It’s unfortunate to learn that this will not be the case, and I can’t help but wonder what might have been if the commission had approved the MS-1 designation that was sought in 2001 and 2002 by Mountain States.”
As recently as late 2006, Taylor and MSHA were close to a deal that would have given MSHA 6 acres for $3 million. That fell through due to wrangling over who would pay interest on the land while it awaited rezoning.
After the 2007 rezoning, Taylor submitted site plans showing four medical/commercial/office buildings, and he also agreed to build an interior road system allowing only right turns in and out of the property. An access road would connect to the south side of the Washington County Health Department building, allowing drivers to reach a light where they could turn left on State of Franklin.
David Prince, a broker with TCI Group, which is marketing the property for Taylor, said the plan remains to seek health care related uses for the property.
“I think it’s in the same line of what Dr. Miller was trying to do, and that is stay with the plan that has been developed and approved by the city of Johnson City,” Prince said.