Who looks out for the taxpayers of Knoxville? Two downtown Knoxville projects have serious questions that need answers. The Market Square and Worlds Fair Site projects have both been brought forward with RFPs that have confused both taxpayers and City officials. Each RFP had a two-part implementation. First the City chooses a finalist from a group of RFP respondents. Then the City enters into a negotiation period with the finalist. Each time in this negotiation period there have been serious issues or questions that remain unresolved or unanswered. It is clear there is a failure to communicate.

The first project was the Market Square project of 2002 to 2004. The City issued a RFP and the winning respondent was Kinsey Probasco Associates of Chattanooga. The entire purpose of this proposal was to select a “Coordinating Developer” for the Market Square project who would invest 22 million dollars of private investment in condos and offices around Market Square and bring national tenants to Market Square. KPA was paid a fee of $ 648,732 for Development fees for Phase 1 of the project. KPA has yet to be the “Coordinating Developer”. KPA has yet to invest any private investment except for that invested by David Dewhirst, which is less than 1.7 million dollars and is done on his own behalf. KPA has yet to bring any national tenants. What did KPA do to earn these fees?

KCDC has yet to prepare the “Comprehensive Development Agreement” for the Market Square project, which defined the duties of the “Coordinating Developer” and required the 22 million dollars of private investment. Why did KCDC not prepare this contract in 2002?

Some have said, including KPA President Jon Kinsey, that the reason for the delay of KCDC issuing the “Comprehensive Development Agreement” was that everything was based on the new downtown theater. So the “Comprehensive Development Agreement” for the Market Square project could not be released until the theater was approved. While this is not really correct it has been said many times by many people. If the taxpayers were to accept this statement as true why has KCDC not released this “Comprehensive Development Agreement” contract after the downtown theater was approved several months ago? This is no sunset on doing this. The taxpayers require an answer.

Hayes Hickman of the Knoxville News Sentinel wrote, “Mayor Bill Haslam said he’s not in a position to critique the contract Kinsey Probasco signed with the previous administration.” Haslam said, “What this administration can do is ask, ‘Did they deliver on what they said they would do in the contract?’ And I think the answer is ‘yes.'” So Mayor Haslam is on the record as saying that KPA did what was in the contract? Which contract? What contract? Cardinal has done the work required of them at Market Square for the brick facade on the storefronts, the white concrete, Krutch Park, and the water fountain but what has KPA done?

Yet the whole reason for the contract was to have the “Coordinating Developer”, require the 22 million dollars of private investment to match the public investment made by the taxpayers, and to recruit national tenants. So far none of that has been done. So what does the Mayor’s statement really mean? Does this mean the City of Knoxville will release KPA from the entire purpose for the Market Square project?

If this is the case then shouldn’t KPA be required to return the $ 648,732 for Development fees? Also keep in mind that KCDC was paid $ 100,000 for Administration fees. Shouldn’t those fees be returned also? Why is it the Mayor says he is not in the position to critique the contract Kinsey Probasco signed with the previous administration? If not the Mayor then whom? This is a serious issue that must be resolved.

The Worlds Fair Site project coincidently also has the same finalist as the Market Square project, Kinsey Probasco Associates of Chattanooga. Once again a problem has arisen in the negotiation period. The stated purpose of this proposal was for the City to have control over the assets that were being sold. As Bill Lyons commented in the KNS about the Victorian houses, “”It could be a flop house, ‘As long as they met code, there’s no control over the use.’”

Yet in the negotiation period the City requested KPA to invest $ 200,000 in the Emporium Building and in return the City would remove the 50 % arts requirement for the Victorian houses. While many people thought the 50 % arts requirement was part of the original RFP Bill Lyons has explained in the k2k Internet forum that this 50 % requirement was the first result in the negotiation period with KPA. This has clarified a confusing issue for both taxpayers and City officials.

Since the Victorian houses are now free of the art use requirements why can they not be split from the contract? It is clear in section 5.7 of the RFP for the Worlds Fair Site that the City can take any asset off the contract just as it will do with the Tennessee Amphitheater. Since this serves the interest of the taxpayers why should this not be done? In section 4.5 of the RFP it is clear that this is a two-part process. The first part is the selection of a finalist and the second part is the negotiation period. So let’s see how well the City will negotiate on behalf on the taxpayers.

This brings me to the purpose for this article. On behalf of all taxpayers I ask that the Mayor and City Council require KCDC to implement the “Comprehensive Development Agreement” for the Market Square project, which defined the duties of the “Coordinating Developer” and will require the 22 million dollars of private investment for the Market Square project. Since the City is in the negotiation period for the Worlds Fair Site the taxpayers should be assured of a successful outcome. If the City fails in this responsibility I ask each taxpayer to call Mayor Haslam and express your feelings. Who looks out for the taxpayers of Knoxville? The taxpayers do.

Posted in uncategorized on August 8th, 2005 by #9 | RSS 2.0 |