Johnson City’s downtown not yet at ‘critical mass’
By Jeff Keeling
Walk around downtown Johnson City and it’s easy to see signs of growth, from new restaurants and a community college campus to a sizeable brewery, a public park and lots of new apartments. Ask Craig Torbett whether Johnson City’s downtown has reached a tipping point signaling smooth sailing ahead for growth and redevelopment, and the longtime Johnson City Development Authority commissioner doesn’t pull any punches.
“The concern I have going forward and recently is, I think there’s a lot of people looking at (downtown’s growth) and saying, ‘wow, look how far we’ve come, how fast we’ve come,’” said Torbett, who chairs the JCDA’s TIF (tax increment financing) Advisory Board.
“That’s fair, but at the same time we are just scratching the surface of what I think is really possible.” Torbett was a JCDA leader when the organization gained approval a decade ago for Tennessee’s first district-based TIF program.
“Years ago, we had consultant after consultant that talked about all these different things, and one of the most repetitive things that showed up in every single one of them was that you’ve got to continue to stay focused and stay dedicated until you push to a point that it will have its own critical mass. Absolutely, it has not reached that point.”
If Johnson City is just scratching the surface, the community is scratching pretty hard. The JCDA purchased the dilapidated former Clinchfield, Carolina and Ohio railroad depot out of foreclosure in 2010 for about $150,000. When it sold the structure to entrepreneur Joe Baker in 2012 for $5,000, JCDA members were betting the private-sector development Baker planned would yield dividends far beyond the public cost of selling the building at a loss. Two years later, in June 2014, Tupelo Honey Café opened in the depot’s warehouse section.
And Baker? In the past two years, he has purchased three additional historic downtown buildings, including another depot, renovated the second depot and opened Yee-Haw Brewing Co. there (a restaurant is also in the space). He also set his sights on further potential investments, including the former General Mills building a couple blocks west of Tupelo Honey. In a late October interview, Baker agreed with Torbett’s scratching the surface assessment. “I think we’re on a heck of a start right now,” Baker said. “I think there’s a lot of good things that have already happened.”
Baker hasn’t been alone in his willingness to invest. Downtown redevelopment has accelerated rapidly over the past 24 months, and included a couple of major public projects in addition to numerous private ones. Torbett attributes the success to a combination of factors, including the TIF and other incentives, and the public-sector investments the City of Johnson City has made in both flood control and beautification. In 2014, before several multimillion dollar projects came on line, the 1,800-parcel TIF district’s total assessed value was $85.3 million – up from $80.7 million in 2013 and $57 million in the TIF’s base year of 2008.
Baker said it is “very attractive” as a private investor to see public investment, from infrastructure to incentive programs. He and his partners haven’t taken TIF to date, but have applied for two current projects, and benefited from the initial sale price on the CC&O depot. “It makes me more comfortable to know I’ve got a partner that is willing to invest side-by-side in working to create a good energy and a good ethos for, in this case, the downtown area,” Baker said. He also cited public projects ranging from Founders Park and the pavilion that will house the Farmers Market to sidewalk and lighting improvements.
“There are many things that are going on right now outside of private investment in Johnson City that make it appealing not only to pedestrians and visitors from other communities, but to folks that are looking to invest money and grow businesses,” Baker said. “It’s (private and public investment) sort of a chicken and the egg comparison. When you look at development in downtown, it’s tough to have one without the other. When we look at starting a business, for instance with the brewery, it’s a lot easier to make that investment and take that plunge when you know there are other things happening around you.”
Torbett said it really all started when Johnson City got serious about addressing downtown’s propensity to flooding, which had long been viewed as an impediment to redevelopment. The city used funds from a stormwater fee implemented in the mid-2000s, and Torbett believes one difference-maker for private downtown investment was the flood mitigation projects’ inclusion of beautification elements – the most noticeable being Founders Park. That downtown space, completed in mid-2014, has quickly become a focal point for gatherings, and is nearly always the scene of people walking, running or cycling.
“I was part of the selection committee for the engineering firms as we were going through that,” Torbett said. “I remember some of them were looking at lowest-cost options and ways to mitigate the flooding, but you would not have ended up with a Founders Park. The city, thankfully, had the forethought to realize that was important enough to make that happen.”
Along with “streetscaping” along Buffalo and other major downtown streets, improved crosswalks on busy State of Franklin Road, and hanging flower baskets and decorative streetlamps, public investments have included the farmers market pavilion and the multimillion dollar investment in the Downtown Centre. Formerly home to Washington County offices, the structure now houses a Northeast State Community College teaching site.
“I truly believe the value that came from those investments is greater, just in the perception that your city is now committed to developing their core and developing their downtown, and developing linkages between ETSU,” Torbett said. “That I think then gives the businesses and the individual investors the confidence to look at, ‘ok, I’m interested, now how do I make this work?’ You still have cost hurdles in developing or redeveloping in a core area that you just don’t have if you go out and buy a raw piece of land and put up a building. TIF gets a lot of credit, and I think that’s fair and it should to a certain degree, but if TIF was there without all those other things I’m not sure that we’d be anywhere close to where we are.”
Nor would downtown be as far along, he adds, without developers that can either procure financing for large projects, or self-finance. “These tools that we talk about that are credited with a lot of the success – it’s an incentive, but you’ve got to have the wherewithal and the ability to do it,” Torbett said.
Still, Torbett said, the ability for developers such as Baker to leverage TIF – and other incentives including historic and new market tax credits – will remain a key to continuing downtown’s momentum and someday reaching the critical mass that lessens the need for public-sector incentives. Torbett said the historic integrity of Baker’s renovations downtown is likely due at least in part to the incentives he’s been able to use.
“The real beauty and benefit of Mr. Baker doing what he’s doing is, you can have a lot of people that can come in and spend money and do big projects that don’t necessarily bring back some of the history and do them in the method that he’s chosen to spend those extra funds to do.”
So with students busily attending class, a new corporate headquarters apparently set to open in the former Kress department store building, parks and farmers markets coming on line and loft apartments sprouting, why is Torbett so insistent the long-sought critical mass hasn’t been reached? For one thing, he said, downtown remains without the large-scale “anchors” that, like malls, downtowns need too.
“Downtowns frequently kind of lose sight of that,” Torbett said. “I don’t think we have lost sight, but if you think about, ‘are we at critical mass yet?’ I would ask you, ‘what are your true anchors?’ We’ve definitely had some great developments in Tupelo and in Yee-Haw, but when you think about anchors, it’s hard to look and say those aren’t for example the General Mills property, or the John Sevier Center – which is a beautiful building that is serving a purpose, but I think any real estate developer would probably tell you it’s not its highest and best use.”
Historic renovation of the mill property, Torbett said, appears to be within sight. The Chamber of Commerce owns it and a large contiguous property is available. The neighborhood has had its say. The city knows the zoning issues. And Baker has expressed interest, with some details, in redeveloping it. In the case of the Sevier Center and other potential large anchors, Torbett said, the city, Washington County and the JCDA need to become more proactive.
“You’ve got properties that may still be occupied but not the best use. So you’ve got to assemble properties, if parking’s an issue you’ve got to figure out how you’re going to handle that. You’ve got to figure out how you relocate people. The whole goal here is not to have anybody be displaced, you want to make everybody as happy at the end as you possibly can.”
That kind of heavy lifting is more than many developers want to do, or are capable of doing, Torbett said. Better that the JCDA and its government partners tee it up for them – up to and including help finding state and federal tax credits.
“We get maybe a preliminary agreement on the front end that this could be available if we can get all these in (properties necessary for a large development),” Torbett said. “And we say, ‘here’s how we kind of see this, now give us your pitch for how could you make that work for you and for us.’ Then we get to decide what’s the best use for the city and for all the people involved.’ That’s what I want to see us get to, and we’re not there.”
Getting there, in Torbett’s view, is critically important to the entire metro area’s medium and long-term future. When companies recruit workers, first impressions matter, and more and more often, Torbett said, those come from a city’s downtown.
“I would be willing to bet you that if we don’t have an identifiable, vibrant cultural base to our city and county, those people are going to come up here and check it out and say, ‘where are they talking about moving me?’ You get enough people who go back and say, ‘that’s not somewhere I want to live, that’s not somewhere I want to envision spending my off time with my family,’ then you won’t get some of those relocations.”
Baker agreed with Torbett’s emphasis on quality of life and place. He mentioned traffic flow, family-friendly spaces such as playgrounds and museums, and quality entertainment as among the key components if there is to be a next stage of growth.
“I think really working toward a long-term plan to create an overall quality experience of life or just a visit in downtown Johnson City is very important. As we’re working together as business owners and the city, it’s important to identify needs and then try to work towards making the needs realities and serving the community in that way. The groundwork’s been laid to do just that.
“When you look around at how Founders Park has developed, and the potential land use for that area and the area where Uhaul was, I think there’s been a lot of good work and a lot of good thoughts by the city planners and government to make those things possible. Now we’re at a point where we just need to continue on that path and do what’s right for the folks that live in and visit Johnson City.”