The properties include the former J.C. Penney’s building; the former Hands-On Museum/Woolworth building; the former Sears building and the property at 323 E. Main St., known as Blaine Cutshall’s former property.
During Monday’s agenda review meeting, Philip Cox and Shane Abraham, the principals of Mitch Cox Companies and Universal Development and Construction, respectively, made a formal $600,000 offer to purchase all four buildings, which are currently generating no property taxes.
“This plan would renovate and revitalize 309, 313, 319 and 323 E. Main St. to create needed housing downtown as well as give potential businesses new options for retail and office locations,” a powerpoint outlining Cox and Abraham’s proposal stated.
All five commissioners seemed receptive to the offer, but Development Services Director Preston Mitchell proposed making the offer contingent on a “development agreement” that would serve as a guide for how the property could be developed.
Both Cox and Abraham, who will do business as AC Commercial Properties, said they would agree to a development agreement, similar to one they agreed to when redeveloping Cherry Street Commons, but they urged commissioners to act swiftly so they could begin engineering work.
When asked how much they might invest in the properties, the two developers roughly estimated between the $5 million and $6 million range, with another $300,000 on engineering and design work.
As part of their presentation, Cox and Abraham presented commissioners with four similar, but slightly different plans for how they could develop the currently vacant properties. All the plans involved the addition of windows to all four buildings.
The real difference between each plan involved the Woolworth building. The first option entailed using the first floor for commercial use or office space, and the second and third floors for residential living, which both men said was their preference.
The second, third and fourth options all involved incorporating additional parking in the current Woolworth building.
“There are challenges to this project with the biggest one potentially being the lack of parking in close proximity to these buildings, which could deter both residential and commercial prospects,” the Powerpoint stated. “Our goal is to salvage and utilize all existing square footage available in the buildings and we hope market conditions will allow us to do so.”
The second option involved demolishing the single-story addition on Market Street to make way for parking, while the third option involved using the entire first floor for parking, from Market to Main Street, with residential above it. The fourth option involves a faux building facade on Main Street, with no roof, no second floor and front-to-back parking from Main to Market Street.
Abraham and Cox both described the endeavor as a “project of passion,” rather than a “project for profit.”
“This is probably not a project we would look at if we didn’t live in Johnson City,” Cox said.
“I mean we live here. We both have young kids. We want to see this town grow, and this is why we’re intrigued by this. And frankly, we’ve felt like the momentum has stalled a little bit downtown, and we don’t want to see that ... I think this would be great, people will get excited and keep the momentum going.”
In August 2018, the City Commission approved a one-year agreement with Mitch Cox Realtor Shannon Castillo to begin marketing the four buildings. Castillo will be paid 6 percent commission on the sale price of each building.
That agreement had the city asking $621,500 for the JC Penney’s building; $500,000 for the Woolworth building; $279,000 for the Sears building and $140,000 for the property at 323 E. Main.
The agreement also included a clause allowing Castillo to reduce those prices by more than 25 percent to incentivize upon the economic impact a certain buyer might bring to downtown, such as the creation of jobs or demand for other businesses. If that occurs, Castillo can be paid based off 75 percent of the listing price, not the sale price.