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Knoxville City Council approves PILOT agreement for $30.7 million project to build golf-themed entertainment center

The golf-themed entertainment center would be located near the Happy Holler district in North Knoxville.

KNOXVILLE, Tenn. — The Knoxville City Council discussed whether to approve a Payment In-Lieu of Taxes agreement on March 19 that could lead to the construction of a $30.7 million "golf-themed" entertainment facility.

The facility would be located near the Happy Holler area of North Knoxville, at the former site of PSC Metals. It would be around 40,000 square feet large and be owned by Knox OnCore, LLC. It would have food and drink services and would be specifically located at 622 Richards Street, according to documents associated with the proposal.

In those documents, Knox OnCore said construction would take around a year and a half, with an opening date expected in 2026. It also expects to bring in around $13.2 million over the first year of operations, mostly from food and drinks.

A financial report associated with the PILOT agreement said without it, investors could expect to make around $25 million back by 2035 — an estimated 11.7% internal rate of return that's lower than the standard targets of property developers.

With a PILOT agreement, the report said investors could expect to make around $27.5 million in the same timeframe for a return rate of around 13.7%, at the low end of most developers' goals, according to the report.

"In that the estimated financial return for the Project is calculated through the use of numerous assumed outcomes, the actual financial return will differ from the estimated return," the report said.

The city said building the entertainment center could activate "a blighted vacant property along an area served by transit and support the recent infrastructure investments in the area." The city also said construction of the new entertainment facility would create new jobs in the area.

Knox OnCore, LLC is also participating in the state's Brownfield Voluntary Cleanup Oversight and Assistance Program, helping clean up the vacant, former industrial site.

"Commercial activity center in a remediated brownfield area provides an opportunity catalyze derelict site through programming and partnerships with local youth sports organizations, such as First Tee Tennessee - Greater Knoxville," the city said. "A PILOT is needed for this project in order for the Owner to proceed with the redevelopment of the site."

The PILOT agreement would be for nine years after a two-year construction period, according to the city. During the agreement, developers would need to pay the city $185,705 annually, and the county  $133,884 annually.

The facility, Shot Club Social Knoxville, is being developed by McCamy, a Knoxville contractor, and OnCore Golf, a golf technology company based in Buffalo, New York. OnCore plans on building a similar facility in Buffalo. It is expected to include 60 hitting bays, duckpin bowling, an arcade and mini-golf.

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