With transfer agreement signed, plans call for developing AMSE site, relocating museum, demolishing building

 

Note: This story was updated at 1:30 p.m. Jan. 3.

With a property transfer agreement signed, new businesses could be built on the 17 acres that now house the American Museum of Science and Energy, the museum will be relocated, and the AMSE building could be demolished, officials and a business executive said Friday.

The changes are allowed under an agreement approved by federal officials, unanimously approved by the Oak Ridge City Council in December, and signed by U.S. Energy Secretary Ernest Moniz and Oak Ridge Mayor Warren Gooch in a Friday morning ceremony at Oak Ridge Associated Universities.

The U.S. Department of Energy said the transfer of the museum property, owned by the federal government, will allow the City of Oak Ridge to “explore future innovative development and economic stimulus opportunities.”

“From the Manhattan Project of World War II to the cutting-edge materials research of today, Oak Ridge has long played a vital role in American science and security,” Moniz said. “This agreement will ensure that Oak Ridge’s history is preserved and shared while providing the city a new opportunity to create jobs and strengthen the local economy.”

When the transfer is completed, DOE public outreach and education missions that are now conducted at AMSE and focused on Oak Ridge history, science, and national security will continue in renovated space in a two-story building that once housed a Sears store next to JCPenney at the former Oak Ridge Mall. The former mall is being redeveloped as Main Street Oak Ridge.

DOE said the AMSE property transfer will save more than $2 million in deferred maintenance costs at the museum and greatly reduce operating expenses.

A landmark institution, the American Museum of Science and Energy, or AMSE, has been at its current home in central Oak Ridge for about 40 years. It’s been considered one of the top tourist attractions in the Knoxville area, and it attracts about 65,000 visitors per year. Among other activities, AMSE displays scientific exhibits and historic photos; hosts community presentations, events, and speeches; and helps tell the story of Oak Ridge, a city built during the top-secret Manhattan Project during World War II. AMSE is also the starting point for bus tours of historic sites on the federal government’s Oak Ridge Reservation, and it hosts a National Park Service visitor center for the Manhattan Project National Historical Park.

But there have been discussions and proposals to help secure the future of AMSE dating back to at least 2000. The museum has been at its current two-story building since 1975. At least one proposal that was previously discussed would have involved the City of Oak Ridge, and another would have involved Oak Ridge Associated Universities, which is next door to AMSE. One development proposal about a decade ago involved a Target and Lowe’s development split between the southern portion of the AMSE property and the Big Lots shopping center on the other side of South Illinois Avenue. There was a series of community meetings on the future of AMSE in 2014. But none of the previous proposals have led to an agreement like the one signed Friday.

One of the key questions in the earlier discussions was about funding. Officials have said the museum has not transitioned to a self-supporting operation, and there are no big donors. While the museum has revenues from admissions and memberships, most of its funding comes from three DOE sites in Oak Ridge: East Tennessee Technology Park, Oak Ridge National Laboratory, and Y-12 National Security Complex. In Fiscal Year 2015, they gave $1.5 million to the museum. Officials have said the museum’s operating and labor costs have been as high as $1.7 million to $1.8 million per year. DOE has said AMSE is “over-sized” and “operationally challenged.”

“A solution to transfer DOE property in the heart of our city has been one that has eluded the leadership of Oak Ridge for over 16 years, but it is now a great example of local and federal government working together as partners to achieve success,” Gooch said Friday. “This transfer creates a ‘win-win’ for the community and DOE by allowing new, modern facilities of public education and outreach to tell our historical story and the future of science and discovery.”

Under the agreement signed Friday, the 17-acre AMSE site is being transferred from the U.S. Department of Energy to the City of Oak Ridge. The city will then transfer the property in two phases to a company set up by RealtyLink, the developer of Main Street Oak Ridge at the former Oak Ridge Mall. That new company, called TN Oak Ridge Illinois LLC, will then be able to use the AMSE site for economic development, although no specific development plans have been announced yet. Oak Ridge officials and RealtyLink executives were scheduled to discuss the next steps this past Friday.

Moniz said the AMSE transfer allows the museum, which is managed by Oak Ridge National Laboratory, to move out of a large building that is hard to maintain into a building that is the right size. AMSE currently has about 54,000 square feet of space. The exhibit space occupies about 15,000 square feet of that, not including the museum lobby.

The agreement signed Friday calls for the AMSE missions to be relocated within about one year to 18,000 square feet of space in the two-story building that once housed a Sears store next to JCPenney at Main Street Oak Ridge. That space, once it’s finished, will be provided by TN Oak Ridge Illinois LLC to the city at no cost for 15 years. That means no rent, utilities, or maintenance. The build-out cost of the former Sears space is estimated at about $1.8 million, Gooch said.

The city will, in turn, sublease that former Sears space to DOE at no charge for 15 years, and it can be used for the federal government’s public outreach and education missions now conducted at AMSE—as well as for a temporary visitor center for the Manhattan Project National Historical Park. It’s not clear what the long-term plans for the National Park Service visitor center might be. The park, which includes Oak Ridge, was formally established about a year ago, and planning is still under way.

The southern portion of the AMSE property, or about 7.5 acres between the tree line and South Illinois Avenue, will be transferred first to TN Oak Ridge Illinois LLC. Officials expect that parcel to be developed within about two years. On Friday, Neil Wilson of RealtyLink said it’s premature to discuss plans for the property.

 

AMSE would have about one year at its current location before it would move to Main Street Oak Ridge. The transfer of the northern portion of the AMSE site, which includes the building itself, will occur later, after the museum moves to Main Street. The AMSE building will be demolished to allow for new construction, Wilson said.

Oak Ridge City Manager Mark Watson, who was authorized to enter into land transfer negotiations with RealtyLink and DOE in June, said the land transfer to TN Oak Ridge Illinois LLC will include about 2.1 acres of city-owned land and right-of-way, limiting the city’s intrusion on the property. The transfer will include the Tulane Place roadway, a roughly 12.5-foot wide strip of right-of-way along the eastern side of Badger Road (the city will retain any easements needed for power poles), and a triangular parcel between the Oak Ridge Municipal Building and the AMSE property.

TN Oak Ridge Illinois LLC will not pay for the two AMSE parcels. Instead, officials have calculated that the company will be providing “equivalent consideration,” preparing and providing 18,000 square feet of rent-free space for 15 years, and covering the cost of maintenance, taxes, and utilities. The company will also provide public amenities such as bicycle and pedestrian paths, and the transferred parcels are expected to generate new property and sales tax revenues. Considering the going rate for commercial space, as well as the cost of preparing the space, along with other factors such as no maintenance or utility costs, the deal makes financial sense, city officials said in December.

TN Oak Ridge Illinois LLC will be responsible for the relocation of any and all utilities required to “maximize” the development of the AMSE property, according to the land transfer agreement.

City officials have said the agreement approved in December and signed Friday gives AMSE a 15-year reprieve and gives the city control over development at the site. Other possible, less desirable outcomes could have been the closure of AMSE or having DOE get rid of the 17-acre museum site through the federal General Services Administration, where it could have been liquidated, officials said.

Local and federal officials emphasized the value of the economic development that the AMSE property transfer allows. They said the agreement was the result of cooperation and a commitment to “get something done.”

“It’s really easy to have nothing happen,” Moniz said.

It’s not the first land transfer from DOE to the community, Moniz said, citing as examples property transfers at Heritage Center (the former K-25 site) and the planned airport at Heritage Center.

Still, there have concerns about the transfer, including questions about whether the new museum space can be completed in one year and questions about how the move might affect AMSE’s role in teaching science to students and Oak Ridge’s history to visitors. There has also been some disappointment in the expected loss of the green space and large trees in that part of town.

The AMSE property along South Tulane and South Illinois avenues is considered prime commercial real estate. There have been development proposals for years, Watson said. Last summer, RealtyLink said it was concerned that any future development of the museum property that competes with Main Street Oak Ridge could jeopardize its 58-acre open-air mixed-use town center at the former mall site.

The enclosed mall had been mostly vacant and was recently demolished with the exception of Belk and JCPenney. Gooch said it had declined in value from $66 million to $6 million. Main Street Oak Ridge is replacing it with businesses expected to include retailers, restaurants, residential units, and a hotel.

“It was a black hole in the center of the city,” Gooch said. “We’re now taking steps to fill that black hole.”

 

Gooch said the property transfer continues the progress made at Main Street Oak Ridge.

“It is a significant milestone in the revitalization of our center city,” Gooch said. “We look forward to continuing our partnership with DOE on solutions that are good for the City of Oak Ridge and the agency. Main Street Oak Ridge ushers in a new and exciting era for our city. Its importance to the image and self-confidence of our city and to the economic vitality cannot be overstated. Today, there is unprecedented excitement about the momentum in our city. We must continue our efforts to take full advantage of this momentum in the coming months, as we address significant capital projects, begin the work on the transition of AMSE to its new home, and begin planning for the 75th anniversary of the Manhattan Project.”

Officials said they recognized the importance of the AMSE story, both in telling the stories of the past and also of the future, and they discussed their work to transfer land back to the community. The city that is now Oak Ridge was built on land seized by the federal government for the Manhattan Project during World War II.

U.S. Representative Chuck Fleischmann, an Ooltewah Republican, said he raised the subject of land transfers in his first conversation with Moniz, asking the then-new secretary to take a personal interest in them. Many of the transfers have been tied up for years, Fleischmann said.

He said the property transfer celebrated at ORAU on Friday was a key land transfer.

“This transferral will enable the community to effectively tell the story of men and women who have worked to protect our country during times of war and peace,” Fleischmann said. “Throughout my time in Congress, I have worked very hard to get government-held property transferred back to Oak Ridge, as well as Anderson and Roane counties, in order to benefit my constituents.”

 

It’s not clear what might happen to AMSE after 15 years, or if the museum will continue to be called the American Museum of Science and Energy.

But DOE has a long-term interest in outreach and helping the public understand science and technology, and its laboratories, said David Klaus, DOE deputy under secretary for management and performance.

“We have a continuing interest in what will happen in that space,” Klaus said.

What happens after 15 years would seem to depend at least in part on decisions made by future presidential administrations.

In the meantime, Klaus said DOE will continue to work with the AMSE Foundation and find ways to keep the museum viable.

“This is a sustainable ongoing structure for AMSE and this mission to go forward for at least the next 15 years,” he said.

The museum has previously been known by another name. Before it opened at its current location on South Tulane Avenue in 1975, the museum was called the American Museum of Atomic Energy. It was established by the federal government in 1949 to showcase work classified for the Manhattan Project during World War II. Oak Ridge was a Manhattan Project city. Among other activities, the city enriched uranium for the world’s first atomic bomb used in wartime and operated a pilot plant, the Graphite Reactor, for full-scale plutonium production reactors being built in Hanford, Washington. Also, it had what was then the world’s largest building under one roof, a building called K-25 that was used to enrich uranium.

More information will be added as it becomes available.

See more photos here.

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