A plan to build new housing for some of Johnson City’s most vulnerable residents is taking another step closer to reality.
Next week, Johnson City leaders will decide whether to strike a deal with LHP Development, a Knoxville real estate developer, which plans to build 145 one-bedroom apartments to replace aging subsidized housing on offer at the John Sevier Center.
In December, city commissioners expressed support for a $31 million proposal by LHP to build a new housing complex at 2162 S. Roan St. in Johnson City, about 1.5 miles from the location current Sevier Center at 141 E. Market St.
The company has asked Johnson City to fill a $5.9 million funding gap in the project, which the agreement says the city will do in the form of a loan through its development board. industrial.
LHP said the remaining funds for the project would come from tax credits and a mortgage. LHP will charge developer fees of approximately $914,000.
The Johnson City Development Authority will vote Monday on the development deal, which includes a $5,943,525 loan. The deal will then need to be approved by Johnson’s Industrial Development Board and Town Commission, which the commissioners will consider at their regular meeting next Thursday.
The city would also enter into a 20-year payment in lieu of taxes agreement with LHP, which will reduce property taxes paid on the new complex. Once the new housing is completed, the company will pay $30,000 annually to the city, an amount that would increase by 2% per calendar year.
The Johnson City Press requested an interview with a city official, but a city spokesperson said Deputy City Manager Randy Trivette was compiling information to present to the city commission during of a work session next Thursday and would not be ready to share anything before then. this meeting. The city may hold a briefing with local media on Thursday.
Alvin Nance, LHP’s managing director of development, said the new location has clear benefits. The most obvious being the addition of a grocery store next to the property.
The Food City on South Roan Street, he added, also has a pharmacy and the site is close to a bus stop, shopping area and the Haven of Mercy thrift store.
The “garden-style” development will consist of a handful of buildings as opposed to a single 10-story structure. It will also be possible to add more green spaces and other outdoor facilities.
The agreement states that LHP is targeting a completion date of Dec. 31, 2025. The company, which already oversees operations at the Sevier Center, will manage the property once it is complete. JADC Chairman Hank Carr said LHP currently owns and manages 54 properties with 8,000 units.
Nance said LHP will keep residents informed of the construction and relocation process.
Current tenants will have the option of moving to another subsidized housing complex if they choose not to move to the new South Roan development. No one will be left homeless, Nance said, and residents will not suffer negative financial consequences.
Invest in people
Carr said building new housing is first and foremost an investment in people. Second, it’s a downtown investment, allowing for the redevelopment of a huge historic building, but Carr said it will still take years for this piece to be completed.
The JADC is still awaiting an inspection from the US Department of Housing and Urban Development, but Carr hopes that will happen soon. An inspector has been assigned to the property and now has 14 days to contact the JADC with an official notice.
Passing this inspection is a key prerequisite for the planned project on South Roan, affecting whether HUD will transfer housing assistance payment contracts from the Sevier Center to a new location.
Carr said the JADC has invested $400,000 in repairing the Sevier Center since the organization purchased the building in late 2019. The building had previously failed inspections it received in 2015 and 2017.
“We did everything we could, and then some to prepare, and the property hasn’t passed an inspection… in a long time,” Carr said.