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Last McClung Warehouse survivor to be demolished

Few are very surprised that the city's administration has opted to demolish the remaining McClung warehouse building, though we'd assumed we would get to hear the engineering report before a decision was made. In the last eight years, that one lone six-story building has been affected by two biggest downtown fires in memory. The 2007 fire, which destroyed the oldest, largest, and arguably best of the buildings in the cluster, was on one side. Saturday's fire, which destroyed the Crane building, was on the other side, and destroyed at least part of the upper portion of this building still standing.

Arson investigators are looking into evidence that trespassers caused the latest fire. But there's enough blame to go around. As long ago as 1999, Knox Heritage was expressing concern about the slow pace of the five buildings' stabilization and renovation. In 2002, Mayor Victor Ashe's administration declared the Jackson Avenue warehouses' vacancy and blight problem an "emergency," and with Knoxville's Community Development Corp., passed a Jackson Avenue Redevelopment Plan which offered the prospect of eminent domain, which could have put the buildings in the hands of a competent and well-financed developer.

It was not until 11 years (and three administrations) later that the city finally gained control of the property, by purchasing it through a lengthy bankruptcy proceeding. 

Several observers say, off the record, that conservative politics, and in particular as they apply to property rights--the property owner in question was for a while a hero on conservative talk radio--played a decisive role in the city's slowness to act. The city respected property rights, at enormous cost to the taxpayer.

Below, a copy of our 2002 story.


A Plan for Jackson Ave.?
One property owner has doubts

The C.M. McClung Warehouse appears in the background on the cover of ex-Rolling Stone bassist Bill Wyman's CD, Anyway the Wind Blows. Until recently, that might have seemed to be the city's policy toward Jackson Avenue.

It's suddenly very different, with the Jackson Avenue Redevelopment District under consideration by Knoxville's Community Development Corp.--a plan that at least one major property owner questions.

Last Wednesday, KCDC hosted a public forum about the project, which includes several blocks of Jackson and Depot avenues at the north end of downtown. KCDC administrator Dan Tiller came up with 10 benign-sounding goals for the neighborhood. They included the usual concerns--parking, infrastructure, and pedestrian linkages--along with a call to "facilitate the redevelopment of the area" and "elimination of conditions of blight and blighting influences." How those phrases are interpreted in the final plan may have enormous consequences for the long-deferred dreams of Mark Saroff.

Saroff owns the C.M. McClung Warehouses, the block of vacant buildings along Jackson that greets anyone driving into downtown from the north or passing by on I-40. Unlike its renovated segment in the Old City, Jackson to the west of Gay Street has remained quiet: an auto-glass company, a couple of craftsman's studios, a couple of modest residences, and the vacant buildings city officials have cited as a "blight."

This cluster of seven adjacent structures was built between 1883 and the 1920s by one of the city's biggest wholesale concerns. Saroff began buying the buildings 11 years ago, and he now owns six of them. They were originally to serve his never-realized Center for the Application of Science and Art.

Several years ago, Saroff announced that he would be renovating the larger buildings for a mixture of affordable and market-rate residences. At the time, it might have seemed a less-likely project than it does now. There were a lot of vacant buildings in this neighborhood separated from the rest of downtown by a steep slope, its main access to town the then half-vacant 100 block of Gay, anchored by the corner homeless shelter.

In the time since, the seemingly isolated neighborhood has come into focus as a likely vital link between the convention center/World's Fair Park area and the nightlife of the Old City. Meanwhile, many expect the removal of the homeless mission at Gay and Jackson (see "Insights," page 4) to make the area more appealing for residents.

Nearby residential projects have been completed as others have been launched and are now fully underway, chief among them Sterchi Lofts, the huge condominium development due to open in November. At least one of the buildings next to Saroff's on West Jackson is being renovated for retail and upscale residential use.

However, Saroff, who once seemed the young stout-hearted pioneer of a forgotten neighborhood, is now owner of the largest undeveloped property in the Jackson Avenue Redevelopment District. By some accounts, the district itself was formed to address frustrations with Saroff's pace. Photographs of Saroff's buildings were waved about at a December City Council meeting by members of Mayor Victor Ashe's administration to emphasize the "emergency" of the situation.

The eight months since have seen little movement from Saroff or the city. Although a defined redevelopment district would theoretically give KCDC the right to condemn buildings that aren't being renovated, KCDC and city officials haven't gotten that far yet. Saroff acknowledges that he has had no personal discussions with KCDC. Tiller says the city has not appropriated any money for the project. That may change as soon as next month, when Tiller expects to put the redevelopment plan before City Council. Though Tiller insists that Saroff is not a target, the would-be developer's wishes may or may not be respected in the plan.

Saroff, a likable guy who tends to ramble, feels he hasn't been treated fairly. "They're blocking me," he says. What's happening with residential development incentives elsewhere in downtown is especially frustrating to Saroff, who in July 2000 made a proposal to the city that seemed to prefigure the deals the city would later make for other projects, like the development of Sterchi Lofts. Saroff imagines their reaction to his residential-incentives proposal: "Great, you're absolutely right, and you're out!"

Doug Berry was this city's director of development at the time of Saroff's proposal. He says it ran into resistance from city officials who were skeptical about Saroff's ability to finance his complicated deal, that there were misunderstandings about the city's role, and that other expensive priorities at the time--notably the convention center and the Renaissance Knoxville plan--put Saroff's project "on the back burner."

Kevin DuBose, of the current director of development's office, says simply that Saroff has not applied for the City Life Incentives package, the residential incentives program the city launched last year. DuBose says if Saroff applies, his project would be considered under the city's criteria for viability.

Saroff has clearly paid some dues. In the '90s, he rebuilt part of the warehouse's foundation; he says the building's structurally sound, and that contractors with the Nashville-based Hardaway company say it's in better shape than the Sterchi was when they started construction work on it. Outside, the building has been roundly vandalized; someone recently smashed the front door. But inside, the hardwood floors, partly rebuilt, are shiny with varnish; the wooden columns are handsome and sturdy.

Some of Saroff's adjacent properties are renovated and occupied. The smallest of the six buildings, at the end, is a residence for three. Another building in the block is home to a successful woodworking firm. Saroff says he's gotten commitments from major financing companies, and has earned tough-to-get federal tax credits for the affordable-housing aspect of his original plan (though they're reportedly now expired), and a national-register nomination for his property.

"I think Mark deserves an opportunity to see his buildings through to development," says Berry. "He's got 10 years of sweat equity in the project. Mark could make it happen. The difficulty appears to be in pulling together a team that understands their roles."

In describing his strategy for the buildings, Saroff is careful to avoid the word waiting, but he repeatedly refers to the necessity of incentives for proceeding with such a huge project. With incentives comparable to those on Gay Street, he says, "This building would go."

He's skeptical of the redevelopment district plan, with its powers to condemn, but defers judgment. "We haven't seen the plan," he says. "They're going to produce a plan after only one meeting? There needs to be a depth of discussion on this. With incentives, who needs a redevelopment area?"

KCDC's public meeting on the Jackson Avenue Redevelopment Plan will be on Wednesday, Aug. 21, at the FIC building, the corner of MLK and Harriet Tubman.

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