Developer Exceeds Market Value

Communications Director

Eric Vreeland
evreeland@knoxvilletn.gov
(865) 215-3480

400 Main St., Room 654A
Knoxville, TN 37902

  • Share on Facebook
  • Share on Twitter
  • Share via Email

Developer Exceeds Market Value

Posted: 07/21/2005
An appraisal of the Candy Factory has determined its value at $1.4 million - $200,000 less than offered by the firm that the City of Knoxville has selected to develop that property and other buildings at World's Fair Park.

"This report confirms to us that our selection of the Kinsey Probasco proposal is in the best interest of city taxpayers," said Mayor Bill Haslam. "The proposal offered not only the best price for the Candy Factory, but a comprehensive plan for renovations of all the buildings and the only plan that reopened the Sunsphere."

The appraisal by Property Service Group Southeast Inc. estimated the Candy Factory's value at $1.375 million when simply comparing sales prices of similar properties and $1.42 million when estimating the income that could be generated by its lease for office or retail use.

Giving greater emphasis to the income approach because that is most commonly used by investors, the report estimates the property's market value at $1.4 million.

The City of Knoxville began an extensive public process in April 2004 aimed at redeveloping city-owned buildings at World's Fair Park. The buildings are sparsely used and have deteriorated from lack of maintenance.

A request for proposals was issued earlier this year, and the City selected Kinsey Probasco to negotiate a final contract to develop the properties, which include the Candy Factory, Victorian Houses and the Sunsphere.

"We chose to issue proposals rather than simply auction the properties in order to ensure that how they were used would complement the Fort Sanders neighborhood and downtown," Mayor Haslam said. "In addition, we want to ensure the necessary renovations occur to preserve these buildings for years to come."

In addition to purchasing the Candy Factory for $1.6 million, Kinsey Probasco expects to spend more than $8 million renovating the seven-story property for residential, retail and restaurant space.

The firm initially called for arts and crafts stores, and studio space in the Victorian Houses, but in response to concerns from current Candy Factory users the City has proposed creating a unified arts district at the Emporium Building. Kinsey Probasco will contribute $200,000 to renovating 5,000 square feet at the Emporium to replicate the studio and meeting space currently on the Candy Factory's seventh floor.

The city administration expects to have a final contract to City Council in August.