JOHNSON CITY, Tenn. (WJHL) — With housing demand extremely high and Johnson City in a strong population growth pattern, even an underused hotel in a good location can become an attractive target for redevelopment.
That’s just what’s taking place at the former Econolodge on Mountcastle Street in Johnson City, where Universal Development & Construction is busy gutting the nearly 40-year-old building prior to a renovation to 57 one-bedroom and seven two-bedroom units.
UDC Founder Shane Abraham said the hotel to apartments project is only the second his company has undertaken. Much more often, the group develops on raw land.
“We have converted one other hotel to an apartment building in South Carolina, so this is new to take it down physically from a renovation, a (demolition) perspective to almost the bones and bring it back as a true residential apartment building,” Abraham said.
UDC announced its plans last August and said then it hoped to complete the conversion by spring 2022. In addition to standard rezoning, design and financing timelines, that schedule was impacted by labor shortages and supply chain issues.
Now, Abraham said the goal is to have “The Hub,” as the complex will be called, on line by late summer. He expects the apartments, whose rent prices will cover electricity and internet service, to attract young professionals.
“Maybe not ready to buy yet or maybe between homes is kind of what we’re looking for here,” he said. That’s the kind of demographic filling many of the 200-plus apartments UDC recently built less than a mile away behind the Mall at Johnson City, Mockingbird at Johnson City.
Abraham said that project is 100% occupied, as are many complexes around the Tri-Cities and as he fully expects The Hub to be.
“Of all the concerns we have filling them is not the issue, absolutely. Getting it built within the budget that we can make justify, there’s the challenge.”
The importance of infill in a growing city
Despite that challenge, Abraham said he’s glad to be doing another “infill” project. This one is even more complex than the Mockingbird, which squeezed lots of units into a space surrounded largely by commercial property but didn’t include the extra challenge of renovating a building.
“We think it’s a great use, the city felt like it was a great use and so to kind of take a tired property and get it on the rent rolls at a much higher value and give it a useful life that the residents in Johnson City need,” he said.
“For us from a development standpoint, great visibility, we think we’re going to give it a great look. A very nice living experience and very central so it kind of checks all the boxes if we can get it pulled off.”
Abraham said infill, especially using existing buildings, is tough.
“It’s one of those things we’ve learned whenever we think we buy it cheap enough to do something like that it’s always the surprises as you’re peeling back the layers. And so we’ve tried this in other markets, it’s just tough to find the buildings and to be able to get through the cost of the renovations to be able to make it work from a residential standpoint. So this is the only one we found to date.”
Whether it’s the Econolodge conversion, UDC’s renovation of two former downtown department stores into “The Henry on Main” apartments or other developers’ work, Abraham said reusing old properties and old buildings within the city’s original footprint is an important strategy.
“I think it shows the proactiveness of our community,” Abraham said. “And this is taking place throughout the city. You’re seeing it downtown, it kind of shows how vibrant our area is. I think it’s really important and part of the reason people are attracted to come here.”
Asked about new city manager Cathy Ball’s projection that Johnson City could grow by up to 20,000 people over the next decade or so, Abraham didn’t push back.
“We’re surrounded by markets that have even a lot more growth than that, when you look at Western North Carolina, upstate of South Carolina, Knoxville,” he said.
“I think you’re getting a lot of rollover now that people have had the opportunity to work remotely a little more, they’ve had maybe some life-changing experiences where they want to get into a less-congested area and Johnson City just really checks a lot of those boxes.”
He pointed to Washington County’s growth rates in the early 2000s of up to 1,000 people a year, much of that in Johnson City. “To bump that up to 1,500 a year over 10 years – I could get there. Yeah. I could maybe see that.”
Ball told News Channel 11 that growth needs to come with careful planning. Abraham agreed and said he believes Johnson City can pursue a more controlled approach than some metros that experienced rapid growth the past five to 10 years have.
“I think that’s a good thing, so hopefully we can all do our part to … not overshoot the runway with too much development, but have enough infrastructure to be prepared that if we are getting the population increases, that it can be done in a way that’s responsible.”
Abraham said he hopes part of that growth continues to occur in the existing core of the city.
“We’re looking for those special pieces of land that allow you to do that. They’re harder, they’re sometimes harder to pull off than just the field that’s out in the growth zone but if you can put together they can turn into some special projects.”