Cootie Brown's flings pie into land negotiations with city board

Nathan Baker • Updated Apr 26, 2017 at 11:22 PM

Deep into the Johnson City Public Building Authority’s hour-and-a-half meeting to consider three potential buyers for a vacant lot on State of Franklin Road, Cootie Brown’s owner Tony Vella threw in a little something to sweeten the deal.

Unboxing a Key lime pie from a polystyrene foam container specially designed to ship the frozen dessert cross-country, Vella announced the Johnson City-based restaurant was planning to launch an online pie business, and he would be willing to process the payments at the proposed State of Franklin location, should the board approve the restaurant’s development.

“We’re going to sell a million of these pies, I guarantee it, and we’re going to use this address for processing those sales,” he said. “This pie will sell at $49, and we’ll do the sales tax using this restaurant as a base.”

The prospect could mean a large budget increase for the PBA, which is funded by selling the land along State of Franklin across from East Tennessee State University and with the city’s share of the sales tax collected by the businesses that develop there.

After the initial shock of the meringue bombshell wore off, board members agreed to judge the three buyers’ proposals — Cootie Brown’s, Kingsport’s Purple Cow and the Johnson City Chamber of Commerce — only on the merits of the verifiable quantities of their initial proposals, although they never seemed to fully shake the allure of the $49 million pie sales.

“For me, the tax revenue is the big deal here,” PBA board member and real estate developer Hank Carr said. “This organization is running on empty, it’s no big secret, we were set up that way, and we’re right at the edge. We know that in a very short period of time we’re going to be at the city asking for significant funds to keep going.

“The question for me is: Am I willing to be the guy who stands in front of them asking for money when we turned it down somewhere else?”

Even without the pie sales, Cootie Brown’s proposal generated the most annual revenue for the PBA.

With a $1.2 million sit-down restaurant proposed for Lot 8 and $2.2 million in projected sales, Vella’s restaurant, developed in partnership with Rex Parris and Steve Scheu of ACRE Properties, would add $34,342 per year to the authority’s coffers through sales and property taxes.

Steve and Carol Trent of Purple Cow, a Kingsport-based drive-through restaurant, proposed a 1,000-square-foot location on the lot they estimated would pull in $2 million in sales, giving the PBA $30,921.

The dark horse in the race, the Chamber of Commerce, estimated more contributions through property taxes, but only $53,972 in sales revenues from selling events tickets. The organization’s projected revenue was $22,227.

Allowing the Chamber to build on the land likely would have required the PBA to give the 501(c)(6) an exception from the board’s set development guidelines for the corridor, which prohibit uses of the land, including pawn shops, X-rated theaters, skating rinks and nonprofit and governmental uses.

Because the Chamber pays property taxes, board attorney Jim Epps said the business organization may not fall under the prohibition, but he advised the board to grant an exception anyway, had members wished to pursue the Chamber’s plan.

A second building proposed with the Cootie Brown’s may need an exception from the PBA’s prohibition on offices on the site, though Epps said it would only take a simple majority of the board.

Ultimately, the board unanimously voted to enter into negotiations with Cootie Brown’s, with the stipulations that the developers set a timeline for the completion of the restaurant and the second building and with a guarantee that future sales made on the internet be processed at the State of Franklin location.

Should the 5,200-square-foot restaurant be built, Vella said it will include a permanent area for tailgate parties before football games at the ETSU stadium across the street.

The PBA has entered negotiations with at least five other developers for the lot in the past, but the deals fell apart because the property is only accessible through a city right-of-way behind Ruby Tuesday.

A direct driveway from State of Franklin is not likely — something PBA Chair Jon Smith reiterated after talking with City Manager Pete Peterson Wednesday — and the Regions Bank on the corner of Mountain Home Drive has not been open to allowing a connection across the back of its property in the past. Vella told the board he was in negotiations with Regions for the connector to the road.

If the restaurant’s $450,000 offer for the land is approved by the PBA, Vella said he intends to open the business within a year of closing.

The Public Building Authority manages operations at the Millennium Centre and subsists on convention and events bookings at the center and taxes collected from the businesses that developed along the corridor across from the university.

After selling most of the usable lots, the Millennium Center was close to needing an infusion of cash from the city to keep it afloat.

A new business on Lot 8 could increase the center’s revenue by 10 percent, without $49 million in pie sales, and could push it closer to self-sufficiency.

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