Loudon company wants to use Alexander Inn as assisted living center

A Loudon company has proposed converting the historic but run-down Alexander Inn in Oak Ridge into a $6 million, 60-unit assisted living senior center.

Family Pride Corp. has requested a 90 percent, 10-year tax property tax break on the three-acre site. Oak Ridge Industrial Development Board members will be briefed on the proposal Monday and consider recommending it to City Council during a special Oct. 11 meeting.

Family Pride would work with InSite Development Corp. of Knoxville to redevelop the two-story hotel, which was built during World War II as part of the top-secret Manhattan Project.

“While virtually all parties agree that ‘rebirth’ of the historic Alexander Inn is vitally important to Oak Ridge, no past effort has come to fruition,” the companies said in their application for a tax break, officially known as a payment-in-lieu-of-taxes agreement. “With the city’s assistance, we are certain we can return it to its former glory, and at the same time, position it to be a significant contributor to the local economy.”

Family Pride said the project is not economically feasible without the tax break “in light of extreme blight, environmental hazards, deterioration, and codes issues resulting from neglect, deferred maintenance, and past public policy impacts.”

The public improvements would include a new road to reroute public traffic that now drives through the Alexander Inn property, relocation of a public storm sewer running under the building, environmental remediation, building stabilization and code compliance, and demolition of the unsafe ballroom area, the application said.

The U.S. Department of Energy is providing $500,000 for the rehabilitation through a grant to East Tennessee Preservation Alliance as part of a recent agreement that allows the complete demolition of the former uranium-enriching K-25 Building in west Oak Ridge.

“While incredibly helpful to this effort, the total of public improvements, purchase assistance and building stabilization will require additional funding to make the project viable,” the application said.

The companies could also apply for federal historic tax credits.

In its application, Family Pride said it has converted two hospitals and one school in Loudon and Lenoir City into assisted living centers. InSite has mostly focused on adapting historic buildings in downtown Knoxville, including the Mast General Store, into mixed-use commercial and residential facilities.

The two award-winning firms are teaming up to restore a long-vacant school in Knoxville’s Oakwood neighborhood into an assisted-living center.

“Similar to the Alexander Inn, Oakwood School was (a) once-proud neighborhood landmark that had deteriorated into an eyesore,” the application said.

The Alexander Inn is now owned by the Oak Ridge Revitalization Effort and could be purchased for $350,000. The assisted living center would be called Alexander Senior Living of Oak Ridge. It would include a wing for patients with Alzheimer’s and dementia.

It would employ 40 people, have an annual payroll of $900,000, and an annual economic impact of more than $2.7 million, the application said.

Also known as The Guest House, the hotel once hosted such dignitaries as physicists J. Robert Oppenheimer and Enrico Fermi, and Secretary of War Henry Stimson. It’s been shut down for about two decades.

Some have argued that the building is beyond repair, but the two companies said they have successfully rehabilitated other properties that were as dilapidated—or worse.

They said assisted living is the best of the “realistic re-uses for the building,” in terms of neighborhood revitalization and economic impact.

“The reality, however, is that this conversion is significantly more expensive than some other re-uses because of stricter fire codes, accessible bathrooms, the addition of a commercial-scale kitchen, and furniture and equipment throughout the facility,” the application said.

The companies said they are ready to buy the property and immediately start remediation and rehabilitation work if the payment-in-lieu-of-taxes agreement is approved.

Monday’s IDB meeting starts at 4 p.m. in the Oak Ridge Municipal Building Training Room.