Knox County Mayor Glenn Jacobs announced last week that BNA Associates LLC had failed to secure the necessary funding to move forward with the development of the Andrew Johnson Building downtown. BNA had plans for a $43 million project which would create a boutique hotel and apartments. This plan would have brought in additional jobs and revenue for Knox County.
Knoxville developer Oliver Smith has a hand in the local hotel market and has worked on a number of projects, including being on the front end of the recently opened downtown Embassy Suites hotel before leaving the project. Monday, he said he isn’t sure the county will necessarily get the hotel-based piece it’s looking for because the market is down for almost everyone.
“Obviously with COVID business travel and leisure travel has taken a big hit and occupancies aren’t anything like they were before this hit,” Smith said. “The convention business is in the gutter (and lenders) are a little bit weary of the hospitality business.”
Some hoteliers, he said, think it will be three or four years before the market stabilizes.
While the hospitality business continues to struggle during the COVID-19 pandemic, finding financing for this project will be tough during these challenging times. However, the County will move the deadline to the end of the year in hopes financing will be secured. If securing funding proves unsuccessful, the county will reopen the bid process next fall.