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Chamber CEO confirms sole negotiations for Model Mill with Baker

Nathan Baker • Updated Dec 16, 2015 at 8:03 PM

After six months of coy silence, Johnson City Chamber of Commerce CEO Gary Mabrey confirmed Wednesday that real estate developer Joe Baker and his partners are the focus of the Chamber’s negotiations for the Model Mill.

“We’ve been talking with the Bakers since June,” Mabrey said. “That conversation has been substantial face-to-face meetings.”

If Baker takes on the project, Mabrey said the Chamber would “more than likely have space in the mill.”

The Chamber originally bought the aging property on West Walnut Street for $400,000 in 2008, intending to make the former flour mill the business organization’s new headquarters. After realizing the financial investment needed to rehabilitate the property, the Chamber board decided to put the mill on the market and search for another, more suitable location.

In 2013, North Carolina-based firm Evolve Development entered into a contract with the Chamber to purchase the mill, raze it and build multi-family apartment buildings, but after a long city approval process and an even longer legal battle with residents of the nearby Tree Streets Neighborhood, the company backed out and dissolved its agreement in April.

Baker, who rehabilitated two historic train depots in the city’s core and is now in the process of refreshing a former hotel and an old car dealership, has not denied his interest in the mill, even when Mabrey refused to discuss the parties interested in the property.

But the large industrial building will take a lot of investment and the involvement of many heavy hitters in the city, he said.

“It certainly remains on the wish list for a lot of folks, including me, but viability is still a big question,” Baker said Wednesday. “Things don’t happen quickly with a project of this size, and, if it’s going to be successful — if it’s salvageable — it would require a lot of commitments from a lot of folks.”

The cost to redesign and repurpose the 1909 processing facility would be immense. Baker said he’s commissioned estimates, but only said it would be “many millions of dollars.”

To make the project viable, and return the vacant building to usefulness, he said a close public-private partnership is needed.

“We have conversations ongoing with (East Tennessee State University), the city and the Economic Development Council, the Chamber and other potential businesses and partners who are either already in the county or are looking to expand into it,” Baker said, before noting that all talks at this stage are preliminary, and that “it would be unfair to give the impression that folks are lining up to commit to this project and jump on board.”

Two of Baker’s other projects received approval this month from the Johnson City Development Authority for incentives paid for using tax increment financing, a mechanism designed to encourage rehabilitation and spur increasing property values. The mill, because of its size and expense, would likely need to come with some sort of financial incentives to make the project viable, he said.

“We know they’re available, and we would support any incentives that would be made available to the Bakers,” Mabrey said.

If the mill rehab project is viable, Baker said an agreement with the Chamber should be reached within the next three months.

Email Nathan Baker at [email protected]. Follow him on Twitter at @jcpressbaker or on Facebook at facebook.com/jcpressbaker.

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