KNOXVILLE, Tenn. (WATE) – A major piece of downtown is closer to a major overhaul. Knox County Schools district officials will begin moving their offices to the east TVA tower in a few weeks, leaving the historic Andrew Johnson building sitting empty.

Developers have big plans for the space left behind and recent action by both city and Knox County leaders have made those plans more fiscally viable. City Council voted Tuesday night to approve a 12-year payment in lieu of taxes (PILOT) for BNA Associates, LLC. County Commission voted to approve the PILOT in April. It basically freezes the property tax bill for the building based on its current value.

It aims to offset the developers’ estimated $34 million renovations. At the end of the PILOT, developers would likely pay a much greater amount to both the city and county, given the building would be worth much more. The PILOT was supported by a third-party review which found “the project would not produce market viable financial returns.”

The building is currently owned by the county and brings no tax revenue. In February 2020, Knox County Mayor Glenn Jacobs estimated it would cost taxpayers more than $20 million to update the building, including make it compliant with the Americans with Disabilities Act, for future school district business. The county also estimated $300,000 in annual savings from moving KCS.

BNA plans to convert the historic building into 143 apartment units and add retail spaces, including a gym and rooftop restaurant and bar. Developers ultimately want to convert the apartments into hotel rooms. Construction timeline depends on when KCS has moved out. They hope to open sometime in 2024. Nothing is final until county commission signs off on final closing documents.