City of Knoxville acquires historic McClung Warehouses

City of Knoxville acquires historic McClung Warehouses

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McClung Warehouses (Source: Google) McClung Warehouses (Source: Google)
On Tuesday, Mayor Madeline Rogero announced that the city and KCDC had settled with the trustee. On Tuesday, Mayor Madeline Rogero announced that the city and KCDC had settled with the trustee.
Jackson Avenue looking west from the Gay Street viaduct. (Source: Google) Jackson Avenue looking west from the Gay Street viaduct. (Source: Google)
"It's a big game changer on really how fast we can expand towards the north part of downtown," Dewhirst said. "It's a big game changer on really how fast we can expand towards the north part of downtown," Dewhirst said.

By ALEXIS ZOTOS
6 News Reporter

KNOXVILLE (WATE) - The City of Knoxville reached a settlement with the owner of a prominent downtown Knoxville property, paving the way for new development in the area.

The McClung Warehouses have been the subject of a battle between private owner Mark Saroff and the city.

The buildings were gutted in a massive fire in 2007. Portions of the building were later demolished, but other dilapidated sections still remain.

The area surrounding the Jackson Avenue corridor has been the subject of extensive revitalization in recent years, including South Gay Street and the Old City.

But development on some Jackson Avenue has stalled because Saroff has not sold or developed the property.

He purchased the buildings in 1991 and 1993, but in the aftermath of the fire, the building sat untouched.

"For decades its been an enormously depressing site, the first view of the core of downtown Knoxville has been this piece of urban blight out here," said developer David Dewhirst.

Knoxville's Community Development Corporation designated the buildings as blighted a year after the fire and requested proposals for development, but none were received.

The entity then voted to acquire the properties, but Saroff sued KCDC and the city for more than $4 million, claiming inverse condemnation.

In June 2009, KCDC rescinded its plans to acquire the property.

In 2010, Saroff's creditors successfully petitioned a U.S. Bankruptcy Court judge to force him to file bankruptcy. A trustee was appointed to manage the properties and Saroff's lawsuit with the city and KCDC.

On Tuesday, Mayor Madeline Rogero announced that the city and KCDC had settled with the trustee.

"For years people have asked repeatedly, what about Jackson Avenue? What about those McClung warehouses?" Mayor Rogero said to the crowd gathered in front of the dilapidated warehouses Tuesday evening.

The city answered those questions with an announcement that they plan to acquire six lots on Jackson Avenue, including the warehouses. As part of the settlement the city will acquire 1.7 acres for $1.45 million dollars.

"We're looking for something to bring more life and vitality to this part of downtown," Rogero said.

Developer Joe Petre was one of the first to build on Jackson Avenue with the Southeastern Glass building at the corner of Broadway and now he's looking ahead to the future.

"This is the last piece to be developed on Jackson Avenue so it's an important piece, it should have been the first piece developed and it's truly a gateway to downtown," Petre said.

Petre said he would look forward to the city's Request for Proposals with interest.

In two weeks the agreement will go to the City Council for approval and then the city plans to stabilize and secure the properties. They will then issue a Request for Proposal (RFP) for private development.

Developer David Dewhirst wouldn't say if he had plans to submit a proposal but said it is an exciting day for all of downtown.

"It's a big game changer on really how fast we can expand towards the north part of downtown," Dewhirst said. "Over the railroad tracks, all the way up through the north, it will really reconnect the inner city to downtown,"

 

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