KNOXVILLE, Tenn. — Another meeting of the Knoxville City Council is expected to start Tuesday afternoon, where leaders will discuss proposals that range from ones aimed at increasing the number of apartments available in the downtown area to closing a transportation gap in North Broadway by building a new greenway.
Another proposal on the agenda would lead to the construction of a new stoplight on Chapman Highway near the new Kern's Food Hall, a long-stated goal of the food hall to help manage traffic in the area.
Additional information about Tuesday's meeting and the proposals leaders will discuss is available below.
City council members will discuss a proposal that would effectively freeze property tax rates on a new apartment complex in downtown Knoxville, built next to another apartment complex and on top of what is currently a parking lot. The apartment complex's specific address would be 121 Union Avenue.
It would be built by Marble Alley Development and would be named "Vintage Cal." In the company's application for a Payment In Lieu of Taxes agreement, it described the building as a mid-rise apartment community near State Street that would also offer commercial retail space with outdoor seating, commercial office suites and 165 residential apartment units.
Its application said ten apartment units would be designated as "workforce housing," and seven would be "live work units." The application also said the building would have parking for 167 vehicles and two "skycourts" with landscaped seating areas, two grills, dining areas, fountains and fire pits.
The application asks for financial assistance from that assistance totaling around $7.37 million, approximately the cost of building the parking area and the transfer slab. The application asks for a PILOT agreement lasting over ten years with annual payments to the city and Knox County totaling $48,000.
PILOT agreements are ways for developers to effectively freeze the amount they would pay in property tax — guaranteeing that their tax rates will not increase for a specific period of time. Through the agreements, public entities effectively take ownership over a property for a specific amount of time and lease it back to developers for a specific rate.
At the end of the agreement, developers usually take ownership of the property and it is taxed as normal after the property is sold back.
On Tuesday, the city council will discuss a resolution allowing Knoxville's Industrial Development Board to enter into a PILOT agreement with Marble Alley Development.
The resolution said the agreement could only last up to nine years after a construction period of up to 30 months. It also said the company would need to make payments equal to the taxes the company would have needed to pay as of the 2023 tax year, plus taxes relating to the property being located in the city's Central Business Improvement District.
The city also said the new apartment would be built near several existing bus lines, and it would cost around $47 million to build. It said the company would make annual payments of $17,331 to Knoxville and $11,043 to Knox County as part of the proposed PILOT agreement.
A report used to inform the city's terms for the agreement also estimated that the company could charge a 2026 market-rate rent of around $2.71 per square foot, and a rate of around $1.43 for affordable units.
The report said the blended average rental rate per unit would be around $2,258 per month in 2026.
It also said real estate developers usually aim for an internal rate of return between 12% and 20% for their projects. It said without a PILOT agreement, they could expect to make a return of around 12.6%, and with an agreement, they could expect a return of around 14.4%. Construction of the project is expected to start in the fourth quarter of 2024.
Knoxville City Council will also discuss a proposal that would start a $137,760 project to design and build a new traffic signal near the Chapman Highway and Fort Avenue intersection. That intersection is located near an apartment complex and the new Kern's Food Hall. The food hall has previously said it wanted to build a new stoplight near there.
In its letter of intent, the city said it also wanted crews to do work on the sidewalk, curb cut and work on pedestrian facilities. It also wanted recommendations for "geometric improvements on Fort Avenue," as well as an evaluation of the existing traffic signal and the conditions of the site. The letter also said the crew would need to work with utilities, the Transportation Department of Tennessee and Kern's design engineering firm.
The design of the new traffic signal and intersection is expected to be completed by Aug. 31, 2025, according to the city. According to the resolution, the city would hire Cannon and Cannon Inc. to do the work.
The Tennessee Department of Transportation offers grants to cities so they can better meet people's transportation needs. That can include the needs of transit users, pedestrians and bicyclists.
The city will consider whether to apply for a $1.125 million grant from TDOT to help build a new North Broadway greenway, connecting the end of the existing greenway on Old Broadway through North Broad and to an existing sidewalk on Adair Drive.
The city would need to commit $125,000 to cover the cost of building the new stretch of greenway. However, the resolution said it would eliminate a "significant gap in the active transportation network."
