Due diligence proceeding as Summers-Taylor looks to buy Model Mill
By Jeff Keeling
See the original article from when the contract on the Model Mill was announced at jcnewsandneighbor.com/model-mill-sale.
By the end of July, just a few weeks after announcing his family company would purchase and renovate Johnson City’s historic Model Mill, Summers-Taylor Inc. President Grant Summers said good progress was being made in the due diligence process.
As crews from Burleson Construction put some needed patches on the 107-year-old building’s roof, Summers said an architect was already working on renderings, initial talks about tax increment financing (TIF) aid had commenced, and a few potential tenants were expressing interest in leasing space. The iconic building, which Summers-Taylor is buying from the Johnson City-Jonesborough-Washington County Chamber of Commerce for $570,000, sits midway between downtown Johnson City and East Tennessee State University and is considered a critical element in continued downtown revitalization.
Since Summers announced July 7 that a contract was in place, he said public response has been enthusiastic. An earlier contract between the Chamber and Evolve Development, a North Carolina company, drew significant criticism as Evolve planned to raze the mill and put a student-oriented apartment complex there. The Chamber bought the property for $400,000 in July 2008. The Evolve contract, inked in late 2013, had become the subject of multiple lawsuits when it fell through in mid-2015.
“We’re still very positive, and in general it’s been amazing how many people have just walked up and said, ‘I’m really happy about what you all are doing,’” Summers said. “The public support is very strong, so we’re very happy about that.”
He said Thomas Weems, a Johnson City-based architect who designed the downtown pavilion that houses the new Johnson City farmers market, is getting well into producing renderings of what the restored building will look like both on the inside and outside.
“That will really be some of the material that I can then go to prospective tenants with,” Summers said. “Visuals are always very helpful in trying to illustrate what a finished product’s going to look like.”
Summers said he and his project team are continuing to crunch numbers and determine what lease rates will need to be. Summers-Taylor’s corporate offices will occupy about 12,000 of the 40,000 usable square feet, and East Tennessee State University is interested in taking up to around 10,000 square feet, probably for arts-related functions.
Summers said he knew the building had some significant issues that will make renovation a long and expensive process. The work on the roof, which Summers-Taylor is funding, is occurring because damage was a bit more significant than they had realized.
“It’s starting to deteriorate the floor, and we just wanted to stop that process. While we don’t own it, we did want to go ahead and try and shape that up where it wouldn’t deteriorate any further.”
Those impediments to renovation are one reason Summers plans to seek TIF funding to help offset the high cost of renovation on the 4.8-acre property. A TIF could allow Summers-Taylor to pay property taxes in the amount due at the current tax assessment for a period of years after the renovation creates a new, much higher assessed value.
“Nothing has been run through any committees by any means, but we’ve had initial conversations with both the city and the county. People have been very receptive and understand the issues that this project has and understand its historic significance. Everybody in general has been very supportive of the project, and we don’t have any reason to believe we wouldn’t be able to get a TIF put in place that would be very beneficial for us and the city and county as well.”
The 90-day due diligence period runs through early October, and closing should occur in early December barring any impediments. Summers expects a two-phase process once that’s done: renovating the existing buildings and finding tenants, then building on outparcels or selling those to another developer.
When he announced the project, Summers said Summers-Taylor was in talks that could lead to purchase of the adjacent, 1.9-acre Mize property. Since then, an “under contract” sign has appeared on the building. Summers said he was told someone was talking to TCI Group, which is marketing the property. “If that goes through, then we’re going to have to work with them and if it doesn’t of course we’ll do it, but I don’t have a whole lot that I can comment on that.”