Model Mill under contract — Summers family to purchase

Closing could occur by December — Construction to take 18-24 months

By Jeff Keeling

Johnson City’s historic Model Mill building obtained a new lease on life Thursday. The area Chamber of Commerce’s foundation, which purchased the mill property at 500 W. Walnut St. in 2008, has struck a deal with the Summers Family, owners of road-building company Summers-Taylor Inc., who plan to renovate the 107-year-old building. The Summerses also are in talks that could lead to the purchase of the 1.9-acre Mize property contiguous to the mill site.

Following a 90-day due diligence period and 60 days for closing, the property transfer could occur in early December. Summers-Taylor plans to move its corporate offices, with roughly 30 jobs, from Elizabethton into a renovated mill. East Tennessee State University President Dr. Brian Noland said ETSU plans to lease up to 10,000 square feet of the 41,000 square feet of renovatable space (Summers-Taylor will occupy 12,000).

“I think it’s important to save the mill,” Summers-Taylor President Grant Summers said Thursday. “I think it’s important to retain these historic structures.”

Summers, who said he will seek tax increment financing to help offset the high costs of redeveloping a historic, blighted property, said he hoped a renovated Model Mill building would help spur continued downtown revitalization and be a catalyst for West Walnut Street’s rejuvenation.

“My father (Rab Summers) has been in involved in downtown for awhile with the King Building and some other things, and I’ve been pretty heavily involved ever since I moved back about eight years ago. To me it’s a quality of life thing, it’s a retaining and developing of workforce thing, it’s what people my generation want and I think most people do – a thriving, vibrant downtown, unique spaces and walkable communities.

“All of that is obviously a macro trend in the country, but I think the momentum we have going on right now is phenomenal. I’ve been down there for years and trying to get things going. For somebody who may have just come on the scene a year or two ago, it’s hard to believe, back before, that we’d have so much momentum now. I think it’s fantastic.”

The Chamber of Commerce’s board and foundation board both unanimously approved a $570,000 offer on the property, which the Chamber Foundation purchased for $400,000 on July 8, 2008. “We look forward to working with this wonderful business and institution known as Rab and Grant Summers to make this deal a reality,” Chamber CEO Gary Mabrey said Thursday.

Summers said he and Rab Summers also are in talks with the Mize family about purchase of the tract formerly home to Mize Home and Garden at the corner of State of Franklin Road and Watauga Avenue. They also plan to develop outparcels on the mill property, including, potentially, space for a new Chamber headquarters.

“We would like to be able to fold it all together and cohesively develop the whole campus,” Summers said of the combination of the mill and Mize property. “We’ve got to come to terms with them, but it’s being talked about.”

Summers credited Joe Baker, an entrepreneur and owner of Yee-Haw Brewing who has renovated several historic Johnson City buildings, with “keeping the conversation going and trying to bring community people in.” Baker made an offer on the mill in May 2015, and as recently as several months ago was working to reach a viable path forward for what is sure to be a very expensive renovation. That path included Summers-Taylor as a likely anchor tenant, and soon the script changed, with Summers expressing an interest in taking over the project.

Baker, for his part, sounded a very positive note about Thursday’s news.

“My absolute motivation was seeing positive movement forward for the property, whether it was me or somebody else or a collection of partners — ultimately the goal is to see the mill survive and thrive as a centerpiece in the community,” Baker said.

“I have every belief that the Summers family has the intention and capability of doing it. Having met with them a couple of times about it, I fully support what I understand is their plan to salvage the property and utilize it for a number of good purposes. At the end of the day what I take pleasure in is seeing good happen for the community, and that’s certainly what seems to be coming together here, so I’m excited about it.”

Summers said Baker was pursuing the renovation more from what he called “community benefit” than for profit, and said the same holds true in his case.

“We just have the fortune of being able to be the anchor tenant, but the deal is still very much more about a historic preservation than any sort of financial windfall.”

Summers said the plan dovetails with the purpose of tax increment financing, whereby municipalities and counties may forego for a period (usually 20 years) the additional property tax revenues that would be due on the higher appraised value after completion of a project. Pre-redevelopment tax revenues are still payable.

“TIF is written for historically significant, blighted buildings and areas that have intrinsic problems of their own in development,” Summers said. “That’s TIF 101. I think the return on a TIF in terms of what that’s going to do for the whole Walnut corridor would certainly be what it’s created for.”

Noland welcomed Thursday’s news. ETSU had been in the conversations when Baker was trying to work out a deal, and Noland said the university is, “very excited about the opportunity to potentially partner with someone who has had such a major impact on our university already.” ETSU’s soccer stadium bears Summers-Taylor’s name, and the family has contributed significantly to ETSU scholarship programs.

“We see this as an opportunity to meet our public service commitment as it relates to downtown, as well as to grow some academic programs,” Noland said, adding that he believes ETSU can come up with the resources to lease space. “I’m comfortable with the level that we’ve been discussing, which is something less than 10,000 square feet that could provide the home for showcasing the talents of our faculty, staff and students,” Noland said.

He added that what happens at the property is exceedingly important to the university and its ability to meet its enrollment objectives.

“The mill property is the bridge between the campus and downtown. It is a wonderfully historic building. It’s a building with a lot of potential, but it is a facility that for a long time has sat underutilized. I commend the Summers family for their vision and willingness to make a commitment to the building and a commitment to downtown Johnson City. I hope this is yet another domino in a series of dominoes that seem to be falling that are yielding the transformation of the greater downtown area.”

The road to an apparent sale has been a rocky one for the Chamber, which envisioned a mixed-use development created by a buyer that would include a new Chamber headquarters in 2008. The ensuing recession produced about five years with little meaningful activity, but in 2013, Evolve Development, a company out of North Carolina, entered a contract with plans to raze the mill and construct apartments.

That drew the ire of neighboring residents concerned about what they believed would essentially be student housing, and about the demise of the historic building. Though it received several needed zoning approvals, the project fizzled in the spring of 2015. Shortly after, Baker announced a plan for the property that included renovating the mill, and said he would make an offer. Baker’s due diligence helped Summers feel confident about the project.

Mabrey said the Chamber will match the Summerses “step for step until we reach what we hope will be a successful closing. We’re excited about it.

“The economic benefits of what they’re going to do will far exceed anything we had hoped for, and looks very, very good for the development along the corridor of State of Franklin and Walnut Street.”

Mabrey said he was pleased Summers showed interest in the Chamber’s request that as development occurs, “if an outparcel could become available, we would be given an opportunity to purchase it and that would allow us to achieve one of our goals and aims, which was to have a building on that site. If that were to happen, we’ll have more than achieved and exceeded our dream of eight years ago.”

Summers said after closing, crews will remove the blue metal buildings atop the original structure and clean out the inside. He said while there are no firm plans for any type of usage, the silos will remain in place. Summers-Taylor offices are slated for the bottom two floors of the main mill building, with a “mixed use” combination of retail, commercial “A grade” office space and possibly residential or restaurant uses.

Summers said he believes getting the building looking less dilapidated, “will make it a lot easier for people to see what it’s going to look like, and then they’ll be excited about it. Some people just have trouble seeing past its current state.”

He said he’s familiar with the environmental assessments conducted on the site, which is a designated brownfield.

“We feel like we’ve got a pretty good handle on what the issues are, but obviously we have to take a real deep dive into everything just to confirm what we think we know. We’re very serious about it — we wouldn’t go through this exercise of going public if we weren’t.”

Summers said he expects a two-phase process: first, renovating the existing buildings and finding tenants, and then building on out parcels or selling those to another developer. Either way, he said, Johnson Citians can expect an aesthetically pleasing development with business types that should be positively received.

“Our offices will be there, so we’re not going to just slap something up next to us. It’s something we’re going to be proud to look at every day for the next 50 years.”