Millennium Park's Lot 8 deal falls through — again
Sep 26, 2012 at 9:36 PM
The future of Millennium Park’s Lot 8 has once again returned to the drawing board.
Tazewell-based firm Ball Realty Auction terminated its contract Wednesday with the Johnson City Public Authority, ending plans to develop the long-vacant property into a mixed-use retail space that would have included the city’s second Starbucks location.
Ball Realty agreed to purchase the property in May for $657,691, submitting $10,000 to the PBA as an earnest money deposit within 10 days of the contract going into effect.
Dixon Greenwood, an affiliate broker with Ball Realty, said the company was met with access problems to the site, which led to the delay of leases with several of the property’s prospects.
A licensing agreement signed in late July between ETSU and Starbucks for a campus location inside the D.P. Culp University Center also helped in keeping the Lot 8 deal from moving forward, according to Greenwood.
“Had we been able to work out some improved access to the site, the lease would have been finalized. The deal would have been done prior to the licensing deal,” he said.
The terms of the original contract could not be accommodated under the company’s proposed plans for Lot 8, so the PBA unanimously voted to move forward in seeking new development for the property.
“We thank Mr. Greenwood for the work he’s done, but unfortunately, I think it’s not in our best interest to tie the property up anymore,” PBA Vice Chairman Jon Smith said.
“We have got to move forward on this lot. It’s in the best interest of the community and the PBA for us to do what is expedient, and I believe this is what we have to do.”
In a letter addressed to the PBA, Greenwood offered two options that would keep Ball Realty working on the development of Lot 8:
• Giving the company the right of first refusal
• Allow the company to create a listing agreement
Before the vote, Smith recommended the PBA move forward without granting those accommodations to Ball Realty because of another company that has expressed interest in Lot 8.
The potential tenant, which is not retail-based, has said they are not interested in the property if there is a right of first refusal, Smith said.
“Moving forward, I don’t know if it will do any benefit to any potential other developer or user of the lot to bring in another party while you’re under contract to discuss potential negotiations,” Greenwood said.
“I don’t see that it will do us any harm,” Smith said in response.
Greenwood said the move puts him in a compromised position for marketing the property, and that he thought the board was treating him unfairly when he had been up-front about his plans since discussions began in February.
Smith disagreed with Greenwood, saying the meetings are public and the board cannot restrict access to people.
“The bottom line here is — and forgive me for being overly blunt; I don’t mean to be offensive — but you haven’t delivered. You can’t deliver. We’ve got to sell the property,” he said.
Lot 8 has had a number of potential plans over the years, including a new Eastman Credit Union branch and an extended-stay hotel, but those plans have always fallen through.
One of the biggest problems past suitors have dealt with is the issue of access from State of Franklin Road.
When asked by board member Guy Wilson about the difficulties with access to the site, Greenwood said the company ran into problems in trying to secure a way into the property through the adjacent Regions Bank.
After nearly coming to an agreement with the bank, Greenwood said it fell apart.
Greenwood then went before city officials to see about cutting into the curb to create an entry point, but they were hesitant because of the university’s construction of its parking garage.
“They didn’t want to shoot themselves in the foot so to speak in putting a right-in-right-out that might impact the way TDOT views a signal going in there,” he said.
Wilson said the board should seriously look at the property’s access problems as they move forward.
“Access is a problem and it’s going to be a problem, and I think it behooves us as a board to try to figure out something...to fix it before we can really effectively market it,” he said.
The PBA is expected to meet Oct. 15 to discuss the future of Lot 8.