New Hyatt Place opens in former Farragut Hotel on Gay Street on Tuesday, December 19, 2017. CALVIN MATTHEIS/KNOXVILLE NEWS SENTINEL
As the book closes on 2017, many will mark it as the year Knoxville’s development went from incremental climbs to a big boom.
In the year’s first 11 months the city issued building permits for construction projects worth $476 million, a 12.8 percent gain from the same period of 2016, according to a news release from the city.
Knoxville developer Rick Dover said 2017 has been a “tipping point” for the city and downtown, specifically with more good to come. For his part in the boom, Dover opened a Hyatt Place in the historic Farragut Hotel downtown Monday and by the end of the year will open an 80-unit senior independent living facility inside the former Knoxville High.
“From what we’ve seen in the last year, the city is turning and it’s being perceived in a whole different light than it had been…it’s growing organically and people are willing to invest and create buildings and experiences that are vastly different than what they had been even two or three years ago,” Dover said.
Dover continued and said the city is being looked at nationally and is being mentioned in the same sentences as Denver, Colorado, Austin, Texas and Nashville. People and money are flowing in, he said.
“I love it. I don’t see a downside to this,” he said. “I don’t think we’re giving up our identity for growth. I don’t see us losing any of our authenticity or soul due to the growth.”
In a statement, Mayor Madeline Rogero said the city has maintained its goal of moving properties from disinvestment to investment.
"We're hitting some major redevelopment milestones, and the record high value of projects being issued building permits this year is significant,” she said. “That’s an accurate bellwether of a growing, robust local economy.”
Knoxville Developer Oliver Smith said the reason for Knoxville's spike in 2017 is a myriad of reasons, but can mostly be attributed to the area inching closer to 1 million people in it's metropolitan statistical area.
“Our MSA is approaching 1 million people, and as soon as you get that you enter into a new bubble where you have larger market people looking at us where as in the past they’ve not done so … that I can tell you is the reason,” he said.
Downtown attracting hotels
Along with Dover’s Hyatt Place, downtown is poised to welcome new hotel space in the form of a combo-hotel, 144-room Courtyard by Marriott and 88-room Residence Inn and will welcome an Embassy Suites in the Conley Building being headed up by Smith.
There are other downtown hotels on the horizon with the old Tennessee Supreme Court site eventually opening with a 170-room Aloft Hotel and a possible hotel going into the Andrew Johnson Building.
When asked if downtown was becoming saturated with hotels and if this was a concern, Oliver said he expects the market to tighten up once the new, planned hotels open. After that, the more upscale hotels will begin to do better than others.
Dover agreed and said hotel investment in an urban area is a good sign. What happens to them afterwards is just capitalism.
“You’ll have winners and losers,” he said of the downtown hotel crowd. “You’ll have folks who provide the right experience at the right price who will do well, and you’ll have those who won’t. That’s natural selection and capitalism.”
