The board authorized up to $10,000 for the cost of the inspection plus other expenses, like attorney fees, associated with the purchase of the 10-story residential building in downtown Johnson City.
Dianna Cantler, director of downtown development at the Johnson City Development Authority, said the organization has received two recommendations for companies that conduct Real Estate Assessment Center inspections and is in the process of contacting them. The contractor in question will be chosen at a later date.
The Real Estate Assessment Center is a division of HUD that inspects taxpayer-supported housing properties.
The U.S. Department of Housing and Urban Development, Cantler said, does an inspection within 90 days after a property changes hands, but the authority will conduct its own separate inspection of the building when it takes ownership of the structure. The most recent REAC inspection on the John Sevier Center was in 2017, Cantler said.
“The benefit of having the private inspection done is that we’ll hopefully know what some of the issues might be and can take steps to correct them before HUD comes in,” Cantler said.
She said the prior owner has addressed issues that HUD identified in 2017.
“We just don’t want any surprises,” she said.
The authority plans to close on the bank loan in late July or early August and is waiting for the bank to conduct its final appraisals. Cantler said she doesn’t have specific date for the purchase of the building.
The loan from HomeTrust Bank, according to prior Press reporting, will allow the authority to buy the John Sevier Center and make repairs that would enable the building to meet standards set by HUD, which subsidizes the rent paid by building residents with Section 8 housing funds.
The authority plans to buy the building, move residents to new apartments, which still need to be built, and then sell the John Sevier Center to a developer who will bring in retail and commercial businesses.
The organization had previously attempted to convince members of the Washington County Commission to increase the debt limit of the downtown tax increment financing district and approve the use of tax increment financing for the Sevier Center project but were unsuccessful.
News Editor Nathan Baker contributed to this report.