A state-owned eyesore on Charlotte Avenue could finally be getting a new owner after the State Building Commission Executive Subcommittee on Monday approved a transaction to sell the building. But it will come at a price for the state.
The former Tennessee Department of Transportation building and warehouses at 2200 Charlotte Ave. are expected to be sold to Indiana-based Holladay Properties for just more than $1 million — less than half of their appraised value of nearly $2.5 million. And that's just for one tract of land the state owns.
Peter Heimbach, executive director of the state's real estate management division, said officials are hoping Holladay's development raises the adjacent tracts' property values. Holladay has not closed on the real estate deal and a closing date has not been set, according to Heimbach. He also said Holladay didn't have to provide prospective uses for the property — and that it's up to the company whether the buildings on site stay or are demolished.
Holladay in 2009 began constructing the two-building Ameriplex at Elm Hill complex and has since recruited the headquarters of Gibson Guitar’s Epiphone division, among others, to fill space there. The company also has begun redeveloping two old warehouses in Elm Hill and Germantown, where it plans to add about 39,000 square feet of office space at Jefferson Street and Third Avenue North.
A Holladay spokesman said the company had no comment on its prospective Charlotte Avenue purchase.
The state had tried to sell all three Charlotte tracts together, but the bids were “very poor,” Heimbach said. The other two tracts include parking lots on either side of the main 2200-2400 block. (The lots surround the renovated building at 2300 Charlotte, which was redeveloped in 2008 by veteran local pro Steve Asbury.)
At Monday’s meeting, Tennessee Secretary of State Tre Hargett, who serves on the commission, expressed concern about cutting such a deal. But state Finance Director Mark Emkes said the state would much rather have “money in the bank” than an eyesore that has drummed up negative publicity.
Hargett said that the commission shouldn't use the appraiser on the project if it was willing to allow the “market to speak.”
“I would ask we find a new appraiser,” Hargett said. “It makes no sense.”
Heimbach said it was difficult for the appraiser to find a comparable sale.