Though much more work needs to be done and many more hoops need to be jumped through, the City of Knoxville and Marion County are taking proactive steps forward in hopeful preparation that VA District lands are acquired. The questions and answers below communicate a vision for the property.
Your Questions Answered
Can the existing buildings be preserved, salvaged, or repurposed for other uses?
Looks can be deceiving. From a distance, a passerby could easily be deceived regarding the actual condition at the VA campus. The arboreal nature of the lawns and majestic brick buildings conceal an unfortunate truth. All buildings on the campus have been vacant for at least 18 months. Several closed in 2009 and others have been vacant for more than 20 years. Most of the buildings have sat empty, neglected, and without maintenance and heating/cooling. This situation has resulted in extensive mold growth, leaking roofs and windows, buckled floors, falling ceilings, peeling lead-based paint, and structural integrity issues that now plague the buildings. Adding to these conditions are a wide range of environmental issues.
Another major challenge at the site is the fact that it was designed to be self-contained, meaning it has its own water tower, electric service, heating plants, cooling, sewage lagoon, etc., and no connections to modern City utilities. This self-supporting infrastructure is now obsolete, nonfunctional, or in some instances removed entirely from the buildings. Elements of the remaining infrastructure are also contributing to some of the environmental issues at the site. The Iowa Department of Natural Resources has deemed these systems unusable, which subsequently rendered the buildings unusable as well. Collectively, these prevailing blighted conditions make it impracticable and impossible to reclaim the area by conservation or rehabilitation. The abandoned buildings are unsafe, unhealthy, and unsanitary for persons to live or work because of dilapidation, deterioration, environmental issues, and no access to modern municipal services. Preliminary cost estimates for demolition of all the buildings, removal of asbestos contained in them, and removal of the existing infrastructure runs as high as $8 million, or more than $50,000 per acre. These costs significantly exceed estimates of the current market value of the land.
What’s going to happen to the existing Knoxville VA buildings and grounds?
The VA lands are currently still owned and maintained by the federal Veterans Affairs Department. Marketing and sale of the property is being administered by the General Services Administration (GSA). The GSA serves as the real estate arm of the federal government. The GSA is following established processes and regulations in moving the property toward an eventual sale. At this stage in the process, only public entities are eligible to negotiate for the purchase of the property. The City has expressed interest in negotiating for the property and is awaiting that process to begin.
Should the City, with the assistance from Marion County, be successful in its negotiations to acquire the property, its long-term vision for the site would be to prepare it for development and to eventually return it to the property tax rolls. Steps that would be necessary to make this happen include:
Razing the buildings and mitigating related environmental issues.
Removing above ground infrastructure, such as the water tower, power plants, and fuel tanks.
Unearthing and removing underground infrastructure, including tunnels, sewer, water, and gas networks
Mitigating and eliminating the septic field and lagoon
Removing streets, walkways, parking areas, and other foundations
Mitigate soil contamination issues
Conducting a cultural survey to properly memorialize and commemorate the historic nature of the site
What will happen to the trees?
Trees offer many positive effects on the image, attractiveness, monetary value, and marketability of a development. The City understands these values and will take into consideration existing trees in its planning and redevelopment process.
The City is aware of public interest in protecting and preserving the oldest Burr Oak on the VA property, which is located on the Southern Lands section. Planners are already examining possible options to see if this can be accomplished.
Regrettably, many of the existing trees will be unavoidably impacted by either removal of existing underground infrastructure, demolition of buildings, installation of new streets and public utility access, or establishment of new city blocks. However, the city does intend to evaluate concepts for mitigating tree loss as part of its redevelopment process so that it can recreate some of their splendor in the longer term.
The Knoxville VA Hospital Historic District was listed on the National Register of Historic Places in 2012. How does this designation impact redevelopment of the site?
The City is currently engaged in discussions with the federal General Services Administration (GSA) and State Historic Preservation Office (SHPO) in Iowa regarding the future status of the historic designation. These discussions are expected to occur for some time and, depending on their outcome, may influence development. While it is unlikely demolition of all VA buildings will be restricted, efforts to commemorate the history of the site would be appropriate as redevelopment proceeds.
How does the City intend to memorialize and commemorate the Knoxville VA Hospital Historic District?
The historical significance of the Knoxville VA District can not be overstated in its service to this country and our veterans and their families, as well as the economic and intrinsic values it afforded local communities and its employees. The City does not want the district’s current condition to gloss over the fact that there are lots of memories associated with the Knoxville VA. The site deserves to be memorialized in an appropriate fashion. Several suggestions have already been received for ways to accomplish this and the City is open to other ideas. Some commemorative elements might include:
Retention of portions of the existing street system
Installation of a commemorative feature
Use of names for new streets that are complementary to the existing street names (e.g., Independence, Freedom, Liberty, and Veterans)
Preservation of the oldest Burr Oak tree
Does this project affect my current veteran’s medical services?
What is the estimated timeline for redevelopment of the district?
In 2017, the federal General Services Administration (GSA) was given the task of disposing of the former Veterans Administration Hospital and associated lands. While the GSA has been progressing through the disposition process, the future ownership of the lands and building has not yet been determined.
At this stage in the process, only public entities are eligible to negotiate for the purchase of the property. In November 2018, the City, with assistance from Marion county, expressed interest in negotiating for the property and waiting for that process to begin. Although it remains speculative at this point, if the property is acquired by the City, a strategic redevelopment plan and timeline will be developed. Development will most likely occur in multiple phases. Due to its complexities and size, this type of project could take several years to fully develop. The pace will be certainly be influenced by market demand for real estate development in Knoxville and private sector investment interests.
What is the City of Knoxville’s and Marion County’s vision for redevelopment of the VA lands?
The City and County have established the following framework and principles for redevelopment of the VA lands, if acquired.
The City, with assistance of Marion County, shall determine the best means of managing the redevelopment process on behalf of the residents of Knoxville and Marion county.
The City, with financial assistance from Marion County, shall take actions to cure the blight within the VA lands. This includes taking steps to demolish the existing VA buildings, remove existing infrastructure, and make ready the VA lands for development.
The City shall determine the best means of utilizing public resources to build new municipal infrastructure necessary for the development of the VA lands. Infrastructure improvements might include such items as: sanitary lift station, sewer mains, storm drainage improvements, water line or other utility extensions and upgrades, street improvements. A phasing plan will be developed to ensure that investments in infrastructure are made in an efficient manner.
The City’s land use strategies should consider various community development needs. While it can be expected that the principal future use of the VA lands will be for residential development, some interest has already been expressed in retail commercial development. Specific uses and zoning for the lands would eventually be outlined in an official Land Use Strategy adopted by the City.
The City shall ensure redevelopment of the VA lands fits appropriately into the surrounding area and with any overall city planning objectives. This includes supporting the City’s housing, economic development, and land use and growth management policies.
The City’s land use strategies should consider feasibility of retention and enhancement of existing natural areas.
The City, with assistance from Marion County, shall proactively encourage private-sector development and/or ownership of the lands, which could involve approaches such as property tax abatements, creating a tax increment financing district, and offering grants or other incentives to encourage investment.
The City, with assistance from Marion County, will identify strategies to commemorate the history of the VA Hospital.
What are the zoning districts and land use strategy for the site?
The City of Knoxville’s zoning districts currently have no influence over development of the VA lands because they are owned by the federal government. The VA has the right to develop and use the lands as it pleases. If the VA lands are transferred to a local owner(s), the property(ies) would be subject to the City’s zoning regulations. Existing City zoning may or may not be appropriate to guide future development of the VA lands. Any changes to existing zoning districts would be based on comprehensive planning and land use strategies specific for this site. Zoning district changes must be adopted by the Planning and Zoning Commission and Knoxville City Council.
What is the estimated cost of the redevelopment project and how will it be funded?
No final cost estimates have been prepared for the project due to uncertainty over disposition of the parcels by the GSA. However, the cost of demolishing the buildings, and removing asbestos and existing infrastructure could be as much as $8 million. To this must be added the costs of the sanitary lift station at just over $1 million, plus the costs of all other municipal infrastructure improvements that may be required. The City and Marion County are in discussions regarding a financial arrangement that could be implemented should the land be made available to the City and the project is advanced.
Will urban renewal of the Knoxville VA District increase my taxes?
An urban renewal district does not impose a new or additional tax. A portion of existing taxes within the district are reallocated from overlapping taxing districts to the urban renewal agency for purposes of undertaking urban renewal projects and repaying any bonds or loans.
What is urban renewal?
The Iowa legislature created what is known as urban renewal as a way to promote public and private investment within “blighted” areas. The goal of urban renewal is to improve these blighted areas so that property values within the urban renewal district increase over time and ultimately benefits the City as a whole.
How are urban renewal projects financed?
Tax increment financing (TIF) is the method used to finance urban renewal projects. TIF is not a new or additional tax imposed by the City. It’s simply a reallocation of tax dollars to repay bonds issued to fund urban renewal projects.
What is Tax Increment Financing (TIF)?
Tax Increment Financing is one of the City of Knoxville’s primary sources of urban renewal funding. Urban renewal districts raise money by borrowing against future growth in property taxes. The city uses the “borrowed” money to pay for capital improvements and repay loans or bonds used for the improvements, which spurs more development. As the city and others invest in the urban renewal area, property values go up.
To learn about where the City & County are in the process: