Taxpayers paid $25.6 million for the Andrew Johnson Building

Taxpayers paid $25.6 million for the Andrew Johnson Building

Mayor Jacobs wants to sell it for $6 million

By Steve Hunley

 

What kind of government spends $25.6 million dollars on a building and then tries to sell it for $6 million dollars? Your Knox County government and Knox County School Board is that kind of government. This past week the Knox County School Board voted to approve the Memorandum of Agreement which was not written by the Knox County Law Department as required in the Knox County Charter to vacate the Andrew Johnson Building and begin the process to move the school system to the East TVA Tower. This past week also saw the infamous tour of the Andrew Johnson Building with tour guide Knox County Mayor Glenn Jacobs. Tour guide Jacobs told members of the school board this was the greatest deal ever because it would save the taxpayers millions of dollars. That is simply political accounting and has no basis in actual accounting.

In a prior school board meeting Deputy Law Director Gary Dupler, who represents Knox County Schools, explained to the school superintendent and the school board that the Memorandum of Agreement which was prepared by Knox County Finance Director Chris Caldwell is not in legal form. It is in violation of the Knox County Charter Sec 3.08 D that states that the elected law director is to execute and administer all the legal affairs of the county, including the drafting of contracts. The MOA the school board approved is not drafted by the law director and is very ambiguous and truly so poorly drafted as to be potentially unenforceable. Despite this warning both Knox County Commission and the Knox County School Board have voted to approve the suspect MOA. This is your government.

Jacobs and his sidekick Knox County Finance Director Chris Caldwell have played the same game for years now. Grossly inflate the estimates of maintenance and repairs while ignoring the $19.6 million dollar loss the taxpayers will suffer for this ridiculous boondoggle. There has been very little transparency in this entire process. The Jacobs administration has prepared many versions of cost estimates for deferred maintenance estimates for the Andrew Johnson Building which show wild disparity. For example, the September 11, 2019, deferred maintenance estimates for the Andrew Johnson Building totaled $5,520,000. But the September 25, 2019, deferred maintenance estimates for the Andrew Johnson Building totaled $9,662,459. How is that possible in only two weeks? Was this $4.14 million dollar increase to make a better case to leave the Andrew Johnson Building? There were no supporting estimates from electrical contractors, plumbing contractors, HVAC contractors, or elevator contractors for these projections. The maintenance numbers are now up to $20-$30 million as of the tour last week. If we wait long enough will it go to infinity?

During the tour of the Andrew Johnson Building last week Jacobs kept telling all who attended that the Andrew Johnson Building was in desperate need of upgrades and renovations which would cost some $20-$30 million. Those upgrades and renovations cost projections have fluctuated by tens of millions of dollars depending on the desperation of Jacobs and Caldwell. The actual truth is the elevator needs to be replaced for between $500,000 to $1 million dollars depending on which estimate you look at from Jacobs and Caldwell.

So the taxpayers could have kept a $25.6 million dollar building by spending only a million dollars. But no, the taxpayers will lose $19.6 million dollars and then turn around and spend over $15 million dollars to renovate a building they do not own and will never own and will probably be kicked out of in 15 years and your Knox County government lured the school system with an extra million dollars a year to grease the skids and make this happen.

And a big question is how many people will make commissions on this deal? How do you like your government now?

If you feel like you had little to no representation on this debacle you would be correct. Whoever makes money on this deal will not be the Knox County taxpayers. The taxpayers will take a huge loss.

How bad is the $6 million dollar price tag for the Andrew Johnson Building? The low bidder for the Andrew Johnson Building is BNA Associates of Nashville. They want a PILOT (Payment in Lieu of Taxes) and maybe also a TIF (Tax Increment Financing) before they break ground on renovations to the Andrew Johnson Building. The market rate of the Andrew Johnson Building is between $17 million and $19 million dollars based on comparable real estate comparisons in that market area of downtown. It is currently appraised at the property assessor’s office at $13.6 million dollars.

Isn’t it also so very interesting that one of the matchmakers of this TVA Tower deal is Mike Arms, the president of the political consulting firm Tennessee Strategies? Arms was a former Knox County Commissioner and former chief of staff to the former Knox County Mayor Mike Ragsdale, who is also co-owner of Tennessee Strategies.

This is your government spending your money. Now is the time to call your county commissioner because after the next commission meeting, it may be too late.

 

 

 

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