JOHNSON CITY, Tenn. (WJHL) — Johnson City Development Authority (JCDA) commissioners got several bits of welcome news Friday, including the fact that rent revenues for the John Sevier Center (JSC) will increase by 70%, retroactive to August.

The U.S. Department of Housing and Urban Development has approved a rental subsidy increase for the John Sevier Center that will greatly increase revenues for the Johnson City Development Authority. (WJHL photo)

That will bring about $750,000 in additional annual revenue for the 150-unit apartment complex JCDA bought in 2019 and allow the agency to rebuild its finances, which have been taxed by hundreds of thousands of dollars in repairs at the 97-year-old high rise that serves elderly and disabled residents.

“We’ve gotten verification from the HUD office that the approval has been granted,” LHP Capital’s Alvin Nance told commissioners. LHP manages the JSC and is also set to build a 145-unit project on South Roan Street to replace the JSC.

The rental news came on a day that commissioners also approved signing a letter asking the U.S. Department of Housing and Urban Development (HUD) to transfer its assisted housing contract from JCDA and the JSC to LHP Capital and a new development, “Tapestry at Roan Hill,” that LHP will build on South Roan Street.

Nance said the company was closing Friday on purchase of the land just south of Food City where it hopes to complete the new apartments by late 2025. LHP is paying $1.2 million for the 20-acre parcel.

Nance said the so-called “HAP” transfer will take up to a year to complete, but is essentially a formality. It will give LHP the right to transfer rights to the rental assistance on the JSC’s apartments to the 145 one-bedroom units that will comprise the Tapestry building.

JCDA vice chair Shannon Castillo said the spate of news was very welcome.

“It feels great,” Castillo said. “This isn’t step one, this is about step 25 of 50, but our major milestones are starting to become accomplished and that has got to make everybody feel good.”

The latest approved plan for new apartments to replace those at John Sevier Center. (Johnson City Planning Commission)

While the brand-new housing for residents remains, Castillo said the main hurdles have been overcome for what she called the end results.

“The one fork is taking care of the citizens of Johnson City that live in the John Sevier and then the other one is, ‘what happens to this building in the end,'” she said.

The JCDA borrowed just over $4 million to purchase the iconic former hotel at South Roan and Market streets partly because of its perceived potential to be redeveloped and become an anchor for downtown growth.

“We can dream all we want to about that second part,” she said. “We need to take care of this first part first, and that’s what we’re doing now is making sure that those people, our citizens of Johnson City, have a better place to live at the end of the day.”

The estimated $754,560 of additional rent revenue, Castillo said, “means we might not staying up in the middle of the night worrying about (JCDA’s budget) and we might have, now, a very good plan.

“All this money that we have injected into this project knowing that we have this outstanding bill that needs to come back to the JCDA, now we have a plan for us to be financially solvent, and that’s a good thing, too,” she said.

Cash influx could help fund improvements, security at current building

JSC residents won’t see their rents increase due to HUD’s approval of the so-called “mark up to market” rent increase, and Nance said one thing the funds will do is help LHP pay for improvements at the current location.

A resident of the John Sevier Center in Johnson City, Tenn. points to the site where one of 14 security cameras was stolen in June. Cameras have since been reinstalled. (WJHL Photo)

“We’ve got to begin that process for also getting in the free laundry for the residents and the cable,” Nance said. LHP pledged those changes back in the spring pending that rent change.

LHP will meet with residents Oct. 6 to share the new information, including renderings showing the new building and details about the improvements the rent increase will mean for them. All that additional money, which is projected to increase JCDA’s annual rental income from $1.07 million to $1.83 million, comes from federal subsidies and not from residents.

Those new amenities will include vouchers for the JSC’s existing laundry facilities and free cable. Nance also said LHP is very open to the possibility of JCDA funding increased security at the building, which some residents have said is sorely needed.

“We’ve had some conversations about, with the additional cash flow do we then bring a security guard in say for weekends, or some off hour periods of time that could be of some benefit,” Nance said.

LHP leaders have also told JCDA Executive Director Tish Oldham they’re interested in speaking with the Johnson City Police Department about how to collaborate regarding the JSC.

“We would love to be able to have a conversation about developing a neighborhood watch program within the building and getting engaged in that,” Nance said.

“We’re still committed to saying, ‘hey, how do we improve things here to make it safer for the residents.'”