In a move that reverses a previous vote, the Johnson City Public Building Authority voted on Wednesday to end negotiations with Eastman Credit Union for the sale of Millennium Park’s Lot 8.
PBA members, concerned with some of ECU’s revisions to the sale contract, revisited the much-discussed earlier question of whether a financial institution was the best use for the PBA’s last available lot — and this time, decided it was not.
Newest PBA member Marcy Walker, who questioned the hastiness of the first decision, made a motion to not accept ECU’s offer for the property, end negotiations, and begin searching for other options that could be more profitable to the PBA and more in line with the original development plan for Millennium Park. The motion unanimously carried, with members Sam Preston and Jon Smith abstaining.
“Why do we want another financial institution here? What’s the urgency?” Walker said. “I just don’t think this is something we should pursue. I move we not accept their offer ... and look at other options down the road.”
The PBA is not in such desperate financial straits that it needs to settle on a use for the lot in order to sell it immediately, she said.
PBA Treasurer Mike Eddy seconded Walker’s logic.
“We might run into a cash flow issue, but we could sell this lot next year and we’d be OK,” he said. “With this (ECU) deal, we could come out losing money.”
In July, the PBA voted to start negotiations with ECU, which proposed purchasing the lot for $750,000 and building a financial center. Since it first declared its interest in the lot, ECU had made clear the sale would be contingent on several access improvements to the property, namely a traffic signal at West State of Franklin and West Harris roads, and either a roadway that links Harris Drive to Mountain Home Drive to the property or a new right in/right out access point from West State of Franklin. ECU had said it would be willing to share the cost of access improvements with other parties that would benefit from them; the PBA had said it would not incur any of those costs.
Both groups said at that time that details of the improvements would be outlined in the contract talks.
Yet the latest contract revisions submitted by ECU, compounded with some original hesitation about the sale, caused the PBA to take a step back on Wednesday. At the top of the PBA’s concerns were contract clauses added by ECU that would have required the PBA act much like a developer, a role which most PBA members said they were hesitant to take.
The largest contract change had ECU suggesting the PBA negotiate with the adjoining land owners about the feasibility and cost of access improvements (some of which require easements and could cost up to $500,000) and then determine a formula for all Millennium Park occupants to pay a fair share for the improvements.
“They have made fundamental changes to the way we convey property and the way the PBA has sold lots in Millennium Park,” said Todd Smith with the WCEDC. “They want the PBA to identify which improvements would work and have also asked the PBA to take the lead when negotiating with other members in Millennium Park, specifically Regions Bank. My concern is that the PBA would be doing their due diligence for them. That’s not our role.”
Complicating any access questions further is the planned East Tennessee State University parking garage, which could dictate or change which ingress and egress routes are able to be built.
“There are still a lot of questions in the air with the parking garage,” Smith said. “That is confusing the issues.”
Smith, PBA vice chairman, said the PBA has historically given all potential buyers plenty of time to perform due diligence and get answers from the city or any other necessary parties before they choose to go through with the purchase and therefore ECU’s requests cannot be considered.
“We have never acted as a developer, and there’s a clause in there that wants us to engage in development activities,” Smith said. “We don’t have the resources or the desire to do that.”
This latest move leaves the lot open, and the PBA is again faced with the question of what is the best and highest use for its last available lot, a decision the PBA will not take lightly.
“It’s not off the market,” Eddy said. “We just need to be more selective about our choices.”