Retail development hits snag: Food City now talking directly with MSHA


By Jeff Keeling

A Nashville realty company has abandoned a project to commercially develop 29 acres near North State of Franklin Road and Sunset Drive, but K-VA-T Food Stores (Food City) CEO Steve Smith is working with property owner Mountain States Health Alliance to restart the project.

A new Food City was going to anchor the project’s first phase. Smith confirmed Wednesday that GBT Realty, which had until the end of April to close on the property, “dropped the project.”

Nashville-based GBT Realty has dropped plans to develop this property near Sunset Drive and North State of Franklin Road. (Photo by Scott Robertson)

Nashville-based GBT Realty has dropped plans to develop this property near Sunset Drive and North State of Franklin Road. (Photo by Scott Robertson)

“Quite frankly, it was unexpected to us,” said Smith, who had hoped dirt would be moving by now and Food City would open a roughly 60,000-square-foot store before Thanksgiving. Smith said Food City (K-VA-T Stores) had a signed agreement with GBT “but they had the option if they couldn’t get their financing to back away from it.”

Johnson City Commission approved a rezoning last November of the property off North State of Franklin Road, paving the way for what GBT called the “Franklin Commons” project. The project wasn’t without at least minor controversy, particularly regarding traffic congestion, but a traffic study was completed and commissioners were largely at ease with the project.

“The developer did some good work,” Smith said. “We’re going to follow a lot of the plans as were committed to the neighborhood, so none of that will change.”

Smith sounded relatively confident that a new Food City, one he described as one of the 105-store chain’s “flagship stores,” would still wind up on the property.

“I can’t give a timetable on that, but we want to do it ASAP, and I feel fairly confident that Mountain States is still interested in moving this project forward,” Smith said. “That’s our goal.”

Hank Carr is president of Corridor Properties, which has marketed the property for MSHA. Carr confirmed the discussions, but added that they weren’t exclusive to Food City.

“Mountain States Health Alliance continues to have discussions with Food City and other users with the ultimate goal of seeing the property developed in a way that maximizes the economic impact to Johnson City,” Carr said.

Rather than leasing the store, as it would from GBT, Smith now envisions K-VA-T as “our own landlord.” The company would aim to develop out parcels around the main store as it has in some other projects. GBT’s marketing materials remained up on its website as of Wednesday, and showed six out parcels of about 1.25 acres each along State of Franklin and Sunset, with the supermarket behind and a parking lot between them.

Smith previously discussed the project in February, when he said an existing store just less than a mile away would probably be consolidated into the new store. That store, at West Market Street and State of Franklin, is in a section of land that has been eyed for a possible business park, potentially linking with an additional 30 acres across West Market and owned by the City of Johnson City.

“We’ve got great associates over there who run a good store. Unfortunately, the store’s landlocked, it’s a smaller store, and we want to put a store that’s literally about twice the size,” Smith said at the time. “It will have gas, pharmacy, and a lot of amenities that are new and different to our stores.”

Wednesday, Smith repeated his contention that the new store, should it materialize, will be among Food City’s largest.

“It’s just going to be a fun store for us to build and operate,” he said.

“We’ll try and move this project forward. Not as quick as we’d hoped, but still as quick as we can possibly do it.”



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