JOHNSON CITY, Tenn. (WJHL) — The effort to get John Sevier Center (JSC) residents into new housing passed a crucial checkpoint Wednesday when Johnson City Development Authority (JCDA) learned the building had passed an important inspection.

Inspectors for HUD’s Real Estate Assessment Center (REAC) conducted the JSC’s first REAC inspection in more than five years Monday and Tuesday. Without a passing score of 60 or higher, JCDA, which has owned the 11-story building since 2019, might have been prevented from transferring the rental assistance contract — a necessity for the company planning to build new apartments along South Roan Street.

JCDA Executive Director Tish Oldham learned Wednesday that inspectors had given the nearly century-old high-rise a 69. She said that passing score, which is far higher than the 46 the building earned in its last inspection in early 2017, gives the new housing developer, LHP, a level of assurance it didn’t have before.

“In order for them to be able to take the housing assistance program credits and move those and utilize this financially, in order to make the project work, this had to pass,” Oldham told News Channel 11.

That’s because JSC’s owner receives “fair market rent” for the 150 apartments in the JSC when they’re occupied, which is usually a much higher amount than residents pay out of pocket. Assisted housing residents typically pay 30% of monthly income. If that’s $250, for instance, and the fair market rent is $600, HUD supplies the other $350.

Oldham said inspectors visited random apartment units on the building’s interior Monday, then conducted an exterior inspection Tuesday.

The carpet at the entrance to the John Sevier Center’s one working elevator was in poor condition the week before the inspection. (WJHL Photo)

“If this hadn’t happened, it would have been a considerable delay, and having to go back and redo,” she said. “Everything would have had to have been reassessed.”

While the passing score was a relief in terms of LHP’s ability to continue moving forward on the new project, which it hopes to complete by the end of 2025, Oldham said she had other reasons to want a passing score.

“My initial reaction really is for those who are residents of the building,” she said. “That is my first thought, in having some of that assurance that someone else besides LHP, someone else besides JCDA, has come to observe that based upon a set of standards, and I think that’s really important.”

The publicly funded JCDA has plowed more than $500,000 into repairs and upkeep at the building since borrowing $4.6 million to purchase it nearly three years ago. And just last week, city commissioners approved a $400,000 emergency request for money to completely overhaul the building’s two elevators, one of which has not been working for months.

JCDA has also requested more than $300,000 for additional capital projects for the building. Added up, it’s more than $1 million total, all representing public money that adds to the expense of a massive undertaking meant to improve the residents’ living conditions long term and free up the iconic former hotel for sale to and redevelopment by a private buyer.

Oldham said it’s important that everyone involved, from LHP and the JCDA to the Johnson City government and the residents themselves, recognize the end goal is the same.

“The whole essence is to give an opportunity for quality affordable housing in Johnson City,” she said. “I think you can go back and see what Mayor (Joe) Wise said, what commissioner (Aaron) Murphy said, is that we have a certain expectation for how we care for our people in our community, and do that and want to have a place where someone can be proud to call home.

“In doing that, the John Sevier was not the best opportunity to meet that goal, and where they’re living and what they’re doing at the time.”