City board recommends tax break for Alexander Inn project

Note: This story was updated at 11:16 p.m.

An Oak Ridge board has endorsed a 90 percent, 10-year tax break for a project to convert the vacant, run-down Alexander Inn into an assisted living center.

The Oak Ridge Industrial Development Board recommended the tax break, officially known as a payment-in-lieu-of-taxes agreement, in a 6-0 vote during a special meeting Thursday. It will now be considered by Oak Ridge City Council on Oct. 22.

Even with the temporary tax break, Oak Ridge and Anderson County will continue to receive at least as much in property taxes as they do now, said Ray Evans, an economic development consultant for the city.

The project to redevelop the two-story hotel on three acres in Jackson Square has been proposed by Family Pride Corp. of Loudon and InSite Development Corp. of Knoxville.

Construction of the $4.5 million, 60-unit assisted living center could take roughly a year.

The payment-in-lieu-of-taxes agreement, or PILOT, could help with public improvements that include a new road for cars that now drive through the Alexander Inn property, relocation of a storm sewer under the building, environmental remediation, building stabilization, and code compliance. Family Pride has said the project is not economically feasible without the tax break.

The environmental work would include the removal of lead paint, asbestos, and mold, Family Pride General Manager Rick Dover told IDB members Thursday. The ballroom and kitchen would be demolished and rebuilt.

“All of these things make this a fairly pricy project,” Dover said. The total construction cost has been estimated at about $5.5 million.

Dover said he’s been looking at the property “off and on” for 10 years, but redevelopment hasn’t been financially feasible.

A $500,000 grant from the U.S. Department of Energy and encouragement from the East Tennessee Preservation Alliance played key roles in making the project possible now, Dover said. The DOE grant, which will help buy the property and remediate it, was awarded as part of a recent agreement that allows the complete demolition of the former uranium-enriching K-25 Building in west Oak Ridge.

“It’s a pretty elegant resolution,” Dover said.

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

Dover and the ETPA’s Ethiel Garlington said the hotel is on the National Historic Register, and the redevelopment will have to comply with U.S. Department of Interior guidelines. It will have historic easements and will have to be restored to its original condition.

Family Pride 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 companies have said they are ready to buy the Alexander Inn and immediately start remediation and rehabilitation work if City Council approves the PILOT.

Historic preservationists have worked for a decade or more to save the hotel, which was built during World War II as part of the top-secret Manhattan Project.

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.


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  • Sam

    What a total waste of money, time and effort. The ‘old guard” is still firmly in control and they know it. A nice “settlement” from DOE would have been a new preschool but it is decrepit, collapsing and useless buildings that take priority here in OR. Madness!!!!

  • Anne Garcia Garland

    I do not think “the old guard” is “in control” of Oak Ridge. There are tremendous competitive views of what Oak Ridge should be and invest in and that lack of agreement has stimied some development efforts over time. The Alexander is a decent object for historic preservation, especially if it can be put back on the active tax rolls and maintained attractively. However, I expect to hear from the city development department a reasonable estimate of the cost of moving the 42″ sewer line under the rear wing and what accomodations have been made for this developer by other cities in previous projects. As well, I think Oak Ridgers should expect to hear from those communities about the continuing profile of the developer’s projects in their communities. Don’t you?

  • Sam

    Ms Garland….. I have a great deal of respect for you but I have to say that I simply disagree with you on this issue. A significant portion of Oak Ridgers continue to dwell on and in the past and they have considerable influence here. my view of a solution to the old building would be for the city to bulldoze it down, auction it off and hopefully a developer would build a tax producing project there that would enhance the city and community. We would ALL gain from that, don’t you think? Incidentally I am one of OR’s “old geezers” vintage 1944, but I live for today and the future, not the past.

  • Robert Humphries

    Sam, I agree with you and also have deep respect for Anne. I AM one of the “old guard” having been brought to this city as a baby in 1943 and living through the whole history. Why don’t we just had out begger’s licenses to all the people wanting their projects w/o taxes? Why is SOME always have to pay (suckers like me) but the PTB’s always find a way around it …… with HUGE PROMISES of all the “benefits” it will bring.
    We need to get back to the “real world” of business. Your PAY for what you get, just like you and I when we take our $$$ to Wal-mart. Then, things will start coming into focus for everyone, and we’ll see clearly what needs cutting and what needs supporting. We have GOT to get this city off the handout list.

    • agent86

      Robert and Sam, it’s obvious that the two of you want nothing to happen in Oak Ridge and for the town to continue to deteriorate until there is nothing left. It is no longer 1944. The developers of the new Walmart/Publix near UT are getting $10 million to make that project a go. Volkswagen got a 100 percent property tax break for 10 years, $435,000
      worth of local matches of two state grants totaling more than $1
      million, and a break-even land purchase deal in exchange for locating in Roane County. The construction of the Kroger Marketplace without government assistance is the exception rather than the rule in today’s business economy (and even there, the city is just completing the redoing of the Turnpike/Illinois intersection and will probably help with other required utility reconstruction and traffic changes). Which is the better choice, allowing the Alexander to remain an eyesore and fall in on itself, or front a little money and get it redeveloped? Time and again, the CAVE (that’s Citizens Against Virtually Everything) folks have stymied projects in this town all the while continuing to complain about the economic situation that exists.

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