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Rogersville to borrow $173,815 to finish Hale Springs Inn renovation

Jeff Bobo • Feb 4, 2009 at 12:00 AM

ROGERSVILLE — It was a Rogersville attorney, John McKinney, who first built the Hale Springs Inn 185 years ago.

And it was a Rogersville attorney whom city leaders turned to for advice Wednesday evening as they considered the possibility of sinking another $173,815 into the historic inn’s preservation.

Rogersville City Attorney Bill Phillips, to be exact. After all the discussion, number crunching and explanations about the latest funding shortfall during Wednesday’s special called Rogersville Board of Mayor and Aldermen meeting, the BMA was left with a hard decision.

Don’t borrow the money and leave the inn unfinished and unusable after five years and $2 million in combined grant and local money spent.

Or borrow the $173,815, which is what First Tennessee Development District adviser Ken Rhea told the board Wednesday is the amount needed.

Board members sought the advice of the city attorney before casting their votes.

“The state thinks this project is worthwhile to spend $1.8 million on it,” Phillips said. “They realize what revitalization does, which is encourage more economic activity, which will in turn bring more revenue in. They don’t just give money out. They realize there is some economic return.

“I guess the issue is, does the town think this project is worthwhile enough to invest (a total of) $331,000?”

And. Phillips pointed out, will the state want its $1.8 million in grant funding back if the city doesn’t follow through and complete the project.

Some board members were reluctant, but the vote was unanimous in favor of borrowing the money. A stipulation was included, however, that the Rogersville Heritage Association — which actually owns and will operate the inn — pay the money back. The board voted 5-0 to issue a 12-year capital outlay note in the amount of $173,815.

Rogersville has already invested more than $158,000 in the project in the form of local matches to two Tennessee Department of Transportation grants.

Prior to the vote, however, board members — as well as members of the RHA — wanted to know why they were told two weeks ago that construction funds for the inn renovation had fallen so short.

Especially after city leaders were told only a couple of months ago that the project was on schedule both financially and on the calendar.

Rhea and construction contractor Glen Courtney attended Wednesday’s meeting to explain. In a nutshell, they guessed wrong on the cost estimate of the second phase of the renovation, but there was also an explanation why they guessed wrong.

After the inn’s 1870 rear addition fell in February of last year, all cost estimates and most architectural plans for the project went out the window.

In order to meet the deadline for an upcoming TDOT tourism grant, Courtney said he whipped together some “guesstimates” as to the cost of building a new rear addition and completing the 1824 main building’s renovation.

Rhea said he plugged that number into the grant application.

Then, after the grant was awarded last August and work began, costs ran higher than anticipated. There was one big change order involving the HVAC system in the new addition that added $142,000 to the project.

But Rhea said the rest of the unanticipated increases were between $5,000 and $15,000.

Including two TDOT grants, their local matches, a no-interest energy loan for the HVAC and the $677,000 received through an insurance settlement when the rear addition fell, $2.1 million has been raised for the project thus far. Subtracting engineering and HVAC costs, there was $1.685 million left for construction. The renovation is now estimated to cost a total of $1.858 million.

With approval of the new loan, completion of the renovation is still projected for June.

In a project that has been plagued by delays and setbacks during its five-year duration, BMA members and the RHA wanted assurances from Courtney and Rhea that this was the last time they’ll be asking for more money.

No one was willing to make any promises.

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