Bob Whetsel on redevelopment, saturation and TIFs

WhetselAs new development has reshaped Knoxville’s urban core over the last decade, one of the key players at the City County Building has been Bob Whetsel. The city’s director of redevelopment for more than seven years, Whetsel is also a former real estate investor who has rehabbed homes in the Fourth & Gill neighborhood.

Whetsel retired from his city post on August 28, and Bricks and Mortar sat down with him on that day to talk about redevelopment, incentives and riding his bike across the country. An edited version of that Q-and-A is below.

Q: Give us a dashboard view of the city as you step down — is the level of redevelopment activity in Knoxville healthy right now?

Whetsel: It is. The level’s very healthy at this moment. We have projects in all parts of town.

Q: Downtown has seen a dramatic turnaround over the last 15 years and the Broadway/Central corridor has seen strong momentum. If you were an investor, a private-sector developer looking to invest in a redevelopment district today, which one would it be — Magnolia Avenue, Cumberland Avenue, the South Waterfront?

Whetsel: I’ve always believed in Fourth and Gill. It’s what you’re looking for and timing’s everything. You used to hear in real estate that location’s the most important thing and it is, but timing’s also there.

Downtown is great right now. Downtown North there are still good buys. The Magnolia Warehouse District is a great opportunity to get in on the ground floor.

Downtown North and Magnolia you can get in without as much money. If you want to play the game on Cumberland right now you’ve got to bring real money to the table. Same with downtown. In South Knoxville there are opportunities on both ends of the spectrum. That’s how strong it is. We have investment opportunities for all income levels.

Q: Speaking of Cumberland, what are you saying right now to folks, because obviously there’s some pain that goes along with redevelopment. What are you saying to the people who are feeling the pain right now?

 Whetsel: The number one thing is keep your eye on the prize. It is going to be a long road until we get completed, but at the end of the day we’re going to have a project that’s going to make Cumberland Avenue very much a part of downtown Knoxville. As we have a downtown university, it’s another downtown neighborhood. And it’s going to get an urban street form and replace a suburban street form.

And there are some small businesses that are suffering, we’re sorry for that. We’ve just got to ride that out. Land values are continuing to go up.

Q: During your tenure at the city, which single redevelopment project — public or private — has had the greatest ripple effect?

Whetsel: I don’t think there’s any question that it’s Market Square. Market Square and Krutch Park out to Gay Street, which led to the cinema and led to Mast, I just don’t think there’s any question. It lit a fire and people started to come back to downtown.

Another one I think’s important is Happy Holler. It’s not the biggest one but the fact that we’ve got a little something going out there, and Daniel Schuh and those guys did that. The city did our little piece.

That’s another thing, this has all happened because of private development. This is not city stuff. We’ve aided and we’ve helped but it’s happened because private developers have invested their money and taken their risk to make things happen. And we’ve listened to them.

Q: Do you think that’s well understood?

Whetsel: I assume it is but I don’t know. Sometimes people think that all this is city-driven. And we’ve had a strategy and we’ve executed that strategy, but the key to that strategy is to be market driven, and work with people when they show up.

I’ve not had to go out and recruit anybody to spend money in Knoxville. I’ve just had to work with people who come through the door and try to see if their project made sense and if there was a need and a reason for public participation in that project.

Q: I was talking to someone recently about the fact that downtown still doesn’t attract many residents with school-age children. Do you expect that will change any time in the near future?

Whetsel: I hope that will change, but I’m not sure that will change. Having been a downtown neighborhood resident since 1980 in Fourth & Gill, that’s been one of the great challenges of redoing old neighborhoods all around downtown, is the perception of the school systems. Children are people’s most precious possession, right, the most precious thing they have, so they’re not going to just take a risk if they are concerned about schools.

I think you may see it change but I don’t know. I hope that changes … But more than that I hope that people look at the downtown neighborhoods, whether it’s Mechanicsville, Parkridge, Old Sevier. These are great places to move, to buy a house to raise my family and be a part of downtown without living in the heart of downtown.

Q: A lot of the redevelopment downtown has been supported by TIFs, PILOTs, tax incentives. Has public perception of those tools changed noticeably over the last decade … Are they more or less popular do you think among residents and elected officials?

Whetsel: I think they’ve become more accepted as a tool, not as something exceptional but as a regular tool in the toolbox. … TIFs are on the way back a little bit. There was a period there where there were a lot of TIFs, or TIFs were the most popular public assistance form, then we went to PILOTs during the recession, now TIFs are coming back and county commission’s got to be involved in that. The last one we took before them made sense, they were supportive of it.

There’s a little pushback out there to this tool, they say we’re using it too much, downtown needs to stand on its own, and it certainly does. But old buildings are hard to do. It’s an effective tool, so we need to keep it in the box, bring it out when necessary.

Q: Are there additional tools being used by other cities — either policy initiatives or financial incentives — that you’d like to see in Knoxville?

Whetsel: Honestly I haven’t looked around that hard. I’ve been busy enough. One thing we need to continue to work on here is making sure we get appropriate parking policies. It’s a huge part of the downtown environment and will be part of the Cumberland project. In the built urban form, parking is a huge part of this. And it’s expensive to get structured parking. So we’ve got to keep working on that.

Q: From the outside it can look like nothing’s happening at a redevelopment site, but obviously a lot of work is going on behind the scenes. What makes those projects so complicated?

Whetsel: There are lots of things that make them complicated. On Jackson Avenue it’s just been an ever-changing scene, from having the (McClung) warehouses to not having the warehouses to then trying to figure out the best way to go forward. We get the ULI study, now we have a market study going. Big tracts of land like that you only get one shot at, right? So there’s no need to rush into it.  We need to try to make sure we understand what we want, and why we want it and how to get there.

The roadway projects take forever because of the right-of-way. It’s always getting right-of-way, it’s getting property.

The Supreme Court site, that’s been vacant a decade now. There’s been two proposals on it. One got kind of killed by the crash. And then the other one couldn’t get their financing together.

And then there’s been so much development going on I think we all have to start paying attention to the absorption issue. We’ve got 230 new hotel rooms that are getting ready to be developed downtown between the Tennessean and the Farragut. Marble Alley’s bringing over 200 new units of residential in. There are  projects in the works to bring even more residential down to the Regas Square block.

Q: Are we reaching saturation on residential do you think?

Whetsel: I don’t think we’re reaching saturation, I just think it’s something we have to pay attention to. There’s more people wanting to live in downtown Knoxville than can find what they’re looking for to live in. No question.

Q: You’ve done redevelopment work over the years — do you plan to be more active in the real estate business once you retire?

Whetsel: I’m not sure what I’m going to do when I retire. I’m going to ride my bike across the country, that’s my first thing.

Q: Seriously?

Whetsel: Seriously.

Q: What are you going to do?

Whetsel: I’m going to do an Adventure Cycling southern tier tour. We’re going to ride with 15 other people. One local guy. We’re going to ride from San Diego, California, to Saint Augustine, Florida. I get on the plane two weeks from today. 3,000 miles in 9 weeks. We’ll kind of go from San Diego towards Phoenix to Austin to Baton Rouge to St. Augustine.

It’s going to be cool. So when I get back from that I’ll see where my head is. It’s time for me to leave the city, it’s been a great run, and I’m sure I will stay around real estate some way.

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