Gary Mabrey has a message for Johnson City: The Chamber of Commerce intends to be a tenant in a historically renovated General Mills building – the same building its Foundation has marketed since buying it for $400,000 in 2008.
“We’ve committed,” Mabrey, the Chamber CEO, said last week, referring to negotiations with entrepreneur Joe Baker, who made an offer on the mill in May after a previous contract that would have meant the building’s demolition fell through. “We want space in the building, we’ve pretty much described what we need. If it’s consummated, in some period of time we’ll be having a ribbon cutting.”
And even if current talks to that end with Baker falter, Mabrey said as 2015 drew to a close, the Chamber will work toward a deal he believes will be more palatable to neighbors and others who opposed the previous contract.
The 70,000-square-foot mill sits on 4.8 acres just west of downtown on property bounded by West Walnut Street, Sevier Street and State of Franklin Road. The property is appraised for tax purposes at $559,300, with the land value representing $400,100 of the total and the building $159,200.
“If the numbers work, it gets pretty simple,” Mabrey said.
The numbers to which he referred relate to a potential deal with Baker, who submitted an offer after the Chamber announced its previous contract was going to be severed. Baker wanted to pursue a renovation of the century-old building, offer the Chamber rent-free space for a number of years, and work toward a major presence – most likely by arts and media programs – by East Tennessee State University.
First reported in News & Neighbor, that plan stood in stark contrast with the previous plans for the mill, which involved its razing and replacement by an apartment complex.
The earlier plans, first announced in late 2013, got to the point of a contract with N.C.-based Evolve Development being signed, but garnered significant opposition – up to and including lawsuits. The ensuing delays and uncertainty culminated in the contract’s nullification, followed by a call for offers and eventually the decision to focus solely on Baker’s for the time being.
Baker, who has completed renovation of two historic downtown train depots and is renovating two other historic downtown buildings, said the project was huge and expensive, but that the mill’s revitalization could make outparcels on the property marketable, and enhance the value of his other local ventures.
“To say that the university is intrigued is an understatement.”
So said ETSU’s Jeremy Ross last month, describing the university’s interest in partnering with Baker (or potentially other private developers) in arrangements he said, “would enhance (university) programs and enhance the city and enhance the developer’s vision.” The bluegrass program and WETS-FM both have been mooted as potential tenants in a renovated mill, and the university is seen as a linchpin in making the Baker plan work.
Baker has suggested those tenants could have a lease arrangement similar to the Chamber’s – leading to a fair bit of the mill’s vast space being occupied by non (or barely) paying tenants. At the same time, he has always said the renovation would need to work numbers-wise.
Mabrey said the Chamber and Chamber Foundation’s board leadership have met with the Johnson City Development Authority (JCDA) and city leaders as the negotiations with Baker and his associates have continued. And if it’s determined tax increment financing (TIF) or some other help from the public sector could help make the numbers work, Mabrey isn’t hesitant about what the Chamber’s approach would be.
“If our current conversationalists need some incentive, we will work with them to get the greatest amount of incentive possible.”
Mabrey is sanguine about the situation, at least on the surface. The economy was just a few months from the Lehman Brothers collapse and the beginnings of a tailspin when the Chamber Foundation bought the property in late June, 2008. Its designs were to sell it and lease space for a new headquarters in some type of mixed-use development there.
“We had this thing sold six months after we bought it, so we closed and we were already thinking Phase II of a capital campaign, where we’re going to go, and then, ‘boom,’ as my grandson says – and the boom was a bust.”
Mabrey does suggest that the Chamber’s risk at that time may have played a role in the significant development that’s occurred around the mill since. And he’s choosing to look ahead to the Baker plan resulting in the good kind of “boom.”
“What this conversation is about is to preserve the mill,” he said. “It’ll be kind of neat in a few years sitting in the mill, listening to the din, the coming and going of all those individuals and bright pieces of the puzzle and knowing, ‘you know what – we did it.’
“Do I allow myself to think, ‘and if it doesn’t happen?’ Well, I’m not going to dwell on that. Right now I’m focused – with a tinge of reality – on the hard-core effort to make this thing work, and we’re gonna make it work.”
He reiterated that could include others pulling on the oars of a boat the Chamber purchased on its own. “This may be one of those prime collaborative efforts that we talk about for a long time. Because we’re all going to have to come together. We just happen to be on the point, in a position of facilitating.”
The current negotiations are likely to be complete, for better or worse, within a few months. If the result isn’t a contract and the early stages of yet another Baker-led historic renovation, the Chamber will contact other parties who expressed an interest at the same time as Baker, Mabrey said.
“I think we would want to sit with them and hear their idea again and vet it again. We have a responsibility to see what goes there. We don’t want just anything there, either. Some of the things that have been mentioned, my sense is, ‘we don’t want that.’”
Concurrently to any such discussions, Mabrey said, “we’re going to go back to the city, we’re going to go back to the JCDA, and we’re going to give them an update. We’re going to say, ‘here’s where we are. What suggestions do you have for us that we can consider that make sense in how to make the best use of this block?’
“We’ll take that advice under due consideration, come back … and make a decision to move forward, ultimately realizing that we’re going to have to sell the property at some point in time.”
Saying the Chamber, “respects people’s individual opinions and rights,” Mabrey spoke positively of the “open conversations” that almost certainly helped lead to the dissolution of the Evolve deal. But he made no apologies about the Chamber’s approach going forward.
“We’ll make the right deal, it’ll be a good deal, and ultimately I think the folks down the road will say, ‘you know, that Chamber of Commerce and those businessmen and women down there did more than the right thing for the community, they did it for all the right reasons. I think it’ll be good. I’m excited.”