Note: This story was updated at 8:50 a.m. June 14.
The Oak Ridge Chamber of Commerce supports a resolution that would allow the city manager to negotiate with business executives and federal officials to transfer about 17 acres of federal property at the American Museum of Science and Energy to help Main Street Oak Ridge, the project to redevelop the former Oak Ridge Mall.
The Oak Ridge City Council will consider the land transfer resolution during a meeting tonight (Monday, June 13). Under that resolution, the 17.12 acres could either be transferred to the city or to RealtyLink, the company redeveloping the mall. The transfer would also include 1.87 acres of city-owned land that are on the north, south, and west sides of the AMSE property.
On Friday, Chamber of Commerce President Parker Hardy said the Chamber supports the land transfer resolution.
“It’s entirely consistent with our overall support for the Main Street Oak Ridge project,” Hardy said. “This has been a long time getting here, and we’re proud to lend our support.”
The U.S. Department of Energy and the General Services Administration haven’t announced plans to dispose of the museum property. But for at least 15 years, DOE has said it is not in the museum business. There has been various proposals at the AMSE site this century, including a Target/Lowe’s development proposal that would have used some of the federal property in front of AMSE, and there have been other proposals involving the city and Oak Ridge Associated Universities, which has its main campus to the west of AMSE. Two years ago, there was a series of four community meetings designed to gather input on the future of AMSE operations.
In a June 8 memo to City Council, City Manager Mark Watson said DOE has asked the GSA for help using its assets, including the 17.12-acre AMSE site, to “help secure a path forward for their mission of public education and public outreach.” The AMSE property could help offset DOE costs as it helps plan, along with the National Park Service, for a new Manhattan Project National Historical Park that includes Oak Ridge, Watson said.
Since the new national park was established, the National Park Service has had representatives stationed at AMSE. Besides Oak Ridge, the new park also includes Los Alamos, New Mexico, and Hanford, Washington. The Manhattan Project was a top-secret federal program to build the world’s first atomic weapons during World War II.
Officials have said AMSE’s public education and outreach missions are not tied to a specific building. And they have suggested that NPS staff and volunteers could also conceivably be housed in another building.
RealtyLink, which is based in Greenville, South Carolina, said it must be able to control the redevelopment of the AMSE property, which is across South Tulane Avenue from the 60-acre mall site.
“Any redevelopment of that property (the AMSE property) that competes with Main Street either directly or indirectly will be devastating to our efforts to provide the community a much-needed, quality, retail-centered mixed-use town center,” RealtyLink Principal Neil Wilson said in a June 2 letter to Oak Ridge City Manager Mark Watson.
The company said it is ready to close on the former mall property, now officially known as Oak Ridge City Center, by the end of June and start construction immediately after closing.
“This issue regarding the AMSE property is the only remaining hurdle standing in the way of that closing,” Wilson said. “However, my partners, investors, and I simply cannot take that financial risk to move forward until the issue is resolved. We must be able to control the redevelopment of that property.”
The AMSE property is included in an economic impact area associated with the mall redevelopment. That plan was adopted by the Oak Ridge Industrial Development Board, Oak Ridge City Council, and Anderson County Commission. Property tax revenues from the future development of the property would be used to help repay a $13 million tax increment financing, or TIF, loan. (Tax increment financing uses new property tax revenues generated at a site to help pay development costs.)
Watson said the land transfer resolution would help protect the TIF investment by ensuring that any new development would not hurt the security of the TIF loan.
Also, he said the land transfer resolution would provide more development opportunities for RealtyLink that could generate new sales tax revenues for the city. The resolution would also support the integration of the retail center on both sides of Tulane Avenue and preserve more space through city right-of-ways that could make the development more friendly to bikes and pedestrians, Watson said.
Hardy said the Chamber will have representatives at today’s City Council meeting, which starts at 7 p.m. in the Oak Ridge Municipal Building Courtroom.
Hardy said he and Oak Ridge Mayor Pro Tem Ellen Smith, along with three other delegates, discussed the mall redevelopment with Wilson at the RECon shopping center in Las Vegas in May.
“This is going to be a real, real shot in the arm for Oak Ridge,” Hardy said.
The proposed redevelopment, which estimates have said could cost $85 million, would demolish the enclosed space between Belk and JCPenney, the two remaining anchors at the mall, and build a new mixed-use town center that could include a mix of retailers, restaurants, residential units, and possibly a hotel. In May, Oak Ridge Mayor Warren Gooch said Dick’s Sporting Goods, PetSmart, T.J. Maxx, and Ulta will have new stores at Main Street Oak Ridge. Also, Belk and JCPenney are renewing their leases at the 58-acre site, and negotiations with other major retailers are continuing, Gooch said.
If approved, the resolution to be considered by Council tonight will allow the city manager to start negotiating with RealtyLink and DOE, through the GSA, for the property transfer. It’s not clear, though, what impact the city resolution would have on federal procedures, if the City Council resolution is adopted and the DOE and GSA decide to dispose of the AMSE property.
There are some conditions that would apply to the city’s negotiations. RealtyLink would have the right of the first option to buy the land at a price of $200,000 per acre—or the “value of the consideration,” divided by 17.12, whichever is greater. After a purchase agreement was executed, RealtyLink would have 180 days for due diligence and 45 days to close.
The city and the developer would focus on a development that would maximize sales tax revenues, the proposed resolution says. RealtyLink would agree to develop the property in a way that would generate $140,000 per year in new property tax revenues by the 2021 tax year and another $150,000 by the 2024 tax year.
Residents have raised questions about what could happen to AMSE itself. Last week, David Keim, spokesperson for Oak Ridge National Laboratory, which manages the museum for DOE, said the City Council resolution is a very early step in what could be a long process.
“We’ll have to wait to see what happens, but we expect to continue operating AMSE for the foreseeable future,” Keim said. “We’re going to continue operating AMSE. That’s our immediate plan.”
At the same time, Keim said, “we need to remain open to new ways of fulfilling our public education and outreach mission, particularly with the arrival of the national park.”
AMSE is supported financially by three DOE/National Nuclear Security Administration sites in Oak Ridge: ORNL, East Tennessee Technology Park, and Y-12 National Security Complex.
See tonight’s City Council agenda here.
More information will be added as it becomes available.
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