Here We Go Again (Page 3 of 3)

KPH partner Ken Hays, who served as then-Mayor Kinsey’s Chief of Staff, was forced to resign from the Chattanooga Downtown Redevelopment Corp. board last year following mounting criticism that he voted “to sell a prime downtown parcel to his friend and current business partner” Kinsey,

forcing current Chattanooga Mayor Ron Litttlefield to “review the role and makeup” of the board, according to the Chattanooga Times Free Press.

“Then-Mayor Bob Corker insisted Mr. Kinsey had submitted the best proposal for the site,” the Times Free Press reported. Similar arguments have been made regarding KPH deals in Knoxville.

For his part, Mayor Haslam has remained positive about KPH. During his mayoral campaign, Bill Haslam singled out KPH proposals as examples for others to follow, which comes as no surprise, given that Haslam and senior director of policy development Bill Lyons served on the KCDC board that approved KPH’s 2002 downtown development proposal.

One aspect of the city-developer relationship is an apparent lack of accountability on the part of developers, both before and after agreements are signed. Case in point, KPH’s 2002 downtown deal involving Market Square, Krutch Park, and Gay Street has since drawn heavy complaints for what some say is a failure to live up to promises made.

A 2005 report commissioned by the city found that a negligible amount of development dollars had been spent in the Market Square Phase I and II projects, despite KPH promises in its proposal that the $20 million in public funds would be matched with $22 million in private investments downtown.

Curiously, specific language holding KPH—or anyone else—to this $22 million figure was absent from the actual signed contract. Jon Kinsey told the News Sentinel last year that his firm was only responsible for “some of it.” Meanwhile, public funds continue to be poured into the projects on schedule.

Following the downtown deal, KPH successfully purchased the Candy Factory and Victorian houses last summer on the premise that it would spend $200,000 to finish the first floor of the Emporium Building for artist use, Councilman Hall said.

“Originally they were going to finish that space out and make it available to art groups in the Candy Factory to have space to use. Someone came up with the idea to just give $200,000 to the Arts and Culture Alliance, and they’d just finish out a smaller space,” Hall said. “But one of the things motivating them was so much time had transpired and nothing had happened.”

“It was kind of a nasty squabble,” Councilman Frost said. “The administration was approached by Lisa Zenni [executive director of the Arts and Culture Alliance] said that KPH hadn’t gotten around to the Emporium building…she was wanting to have a check so the Arts and Culture Alliance could take over the project.”

Both councilmen said that after the dispute, Brian Conley of Cardinal Enterprises—one of several prominent local coordinating partners including Dewhirst Properties—wanted KPH out of the Emporium Building deal. But the group’s $200,000 pledge to provide an alternate art space was part of the reason the houses weren’t split off from the Candy Factory.

Both Hall and Frost, among other council members, voted to keep KPH committed. “We voted against letting them out [of the deal],” Frost said.

“[KPH] didn’t do what they told us they’d do…what they agreed to on paper was different,” Hall said. KPH is currently still required to finish the space in the Emporium Building.

“You can’t fault Mayor Haslam for Market Square, he inherited that [from Ashe’s administration],” Hall said. “But you should hold people’s feet to the fire in business. [KPH] knew what they’re doing, and I don’t think it’s too much to ask them to do what they say…there’s not an excuse.”

Anderson isn’t a huge fan of the Sunsphere and points out the economic impact of Knoxville’s having to maintain it.

“The Sunsphere has been a definite drain on the economy. No one can find a business to work there. It can be an albatross to keep maintained. The gold glass definitely has a life span and as [the 360 individual panes, which cost $1,000 apiece in 1981] start to fail it will be very difficult to maintain. It’s a drain on the city’s finances.”