Wed
Aug 23 2006
12:42 pm
New Sunsphere plan announced
By: R. Neal

The KNS reports that a new and improved plan for the Sunsphere has been submitted by the developers and will be presented at a City Council workshop tomorrow afternoon. The new plan calls for a restaurant (but for some reason it won't involve the Wests as originally proposed), and office space for a local PR firm.

One of the developers is quoted in the article as saying that the high utility costs are an "urban myth." Bill Lyons said recently:

Reaching an agreement has become much more problematic for all parties following construction cost and energy cost increases of the past couple of years. What we had was a proposal, which we have hoped could lead to a successful contractual arrangement. Many specifics have had to be worked out to the mutual satisfaction of both parties. KPH did not commit to paying the utilities for the structure in their proposal and the city did not commit to paying them in our RFP.

At any rate, it's good to hear the Sunsphere might be one step closer to being rescued and opened to the public again.

UPDATE: The article says the new lease proposal is for $57,000 per year, which is $3000 per month plus $2 per square foot [per year, approx. $21,000] for utilities, for a total of $4750 per month or $1.14 million over 20 years if my math is correct. If I'm not mistaken, the original proposal was for $1.44 million over 20 years, which is $72,000 per year, or $6000 per month.

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Socialist With A Gold Card's picture

So where's the wig factory

Submitted by Socialist With ... on Wed, 2006/08/23 - 1:03pm.

So where's the wig factory going to be located?

What?! No wig factory in the RFP?! This will ruin downtown ...

--Socialist With A Gold Card

"I'm a socialist with a gold card. I firmly believe we need a revolution; I'm just concerned that I won't be able to get good moisturizer afterwards." --Brett Butler

 

Michael's picture

Interesting stats on the

Submitted by Michael on Wed, 2006/08/23 - 4:30pm.

Interesting stats on the Sunsphere can be found in this .pdf.

"...In comparison, the Knoxville Sunsphere’s restaurant got very poor reviews during the World’s Fair, closed in 1984, and no restaurant or other industry has been willing to occupy the space. Some critics have suggested that the reason is because the interior of the Sunsphere offers so little space. (The Space Needle has approximately 10,000 ft2 of restaurant space, whereas the Sunsphere only has 6000 ft2) If a restaurant were to be successful it would have no room to spread out. Also, in 1986 the Sunsphere cost $3 per square foot per day just to pay utilities.[10] ..."

Probably an urban myth.
~m. 

Bill Lyons's picture

Sunsphere utilities, etc.

Submitted by Bill Lyons on Wed, 2006/08/23 - 5:11pm.

There are a couple of items to clarify here. Our goal was to get the Sunsphere open and accessible to the public in a fiscally prudent manner. The study Michael refers to is part of the reason that this proposal no longer contains a full service restaurant with an operating kitchen. It simply is not feasible. There will be more of a sandwich and salad lunch place with soft drinks, etc. In the evenings it will change to a bar and catered special events. The full kitchen created tremendous uncertainty regarding utilities. Without that the expenses are much more predictable based on experience with PBA offices during the construction of Worlds Fair Park and the Conv. Center.  The figure cited in the study has to be wrong. With apprx 10k sq ft that would be $30,000 a day or over $10,000,000 a year (figured 10yrs ago). Based on figures from four or five years ago for PBA, (without a restaurant) the rent plus the utility costs should put the city at or at least near a break even point for operating the structure. It cost a good bit now just keeping it mothballed.  One of the things we worked on during the negotiations was an escalation clause in the rent to match the CPI or some like number and one for the utility payment geared to a comparable number. The city thus has some inflation protection.

Another item that we need to clarify is the $2 per sq. foot utility cost. That is for the year, not monthly. This would apply to a bit over 10,000 sq ft of useable space.

Another change from the proposal was for the scope of the contract. KPH proposed 40 yrs with a build out of the interior. We have moved that to 20 yrs with KPH responsible for the complete interior build out, including that of the observation deck to be operated by the city. The city is responsible for the exterior of the structure, HVAC, bird proofing. etc.  Finally, sorry, no taxes and therefore no TIF. This is a lease and not a sale. The City will continue to own the Sunsphere

Thanks... There will be a workshop tomorrow at 5pm at the CCB.

 

 

 

 

 

 

 

 

 

R. Neal's picture

Thanks for that

Submitted by R. Neal on Wed, 2006/08/23 - 5:20pm.

Thanks for that clarification, Bill. So, you are saying they are going to pay approx. $20,000 per year for utilities, plus the $36,000 per year lease. That makes more sense. It was a little confusing in the newspaper report.

What if the utilities cost more than that? Who pays the difference?

Also, is this deal less than the original proposal because it was determined that the original restaurant operation as envisioned wasn't feasible, or the developers are going to do more work than they originally proposed, or...?

Bill Lyons's picture

Randy, The city will pay

Submitted by Bill Lyons on Wed, 2006/08/23 - 5:47pm.

Randy, The city will pay anything over the $2 amount. The full service restaurant turned out not to be a good idea from anybody's viewpoint. The scaled back version just made more sense, and did not have the utility cost risk that would largely put the city at risk. It is hard to know what the utilities will be but we have a much better handle on it with the proposed uses.

Our main concern has been to avoid having the Sunsphere become a private office building with no way for the public to enjoy it other than though the observation deck. Getting two floors (5 and 6) for food and catering and two for office use seemed like a good outcome.

R. Neal's picture

Thanks again, Bill.

Submitted by R. Neal on Wed, 2006/08/23 - 5:51pm.

Thanks again, Bill. Abandoning the full-service restaurant sounds like smart business. Not so sure about the city guaranteeing the utility costs. But as I said in the original post, glad to see movement towards rescuing it and making it open to the public again.

Tiny Tim's picture

How Much Will This Cost City Taxpayers

Submitted by Tiny Tim (not verified) on Wed, 2006/08/23 - 7:32pm.

There would have to be some substantial up front costs to make the building close to current codes and commercially usable and I would expect it to go in excess of a million. Why the city feels the need to throw that kind of money around so a developer can come in and run a few studies and then ask the city for more money to do the project is beyond me. Who's the developer? The City of Knoxville is footing the real money on the front end and who knows whether or not anything will happen there, but the City will justify its existence by throwing a million around so they have a need to go collect a tax again next year.

S Carpenter's picture

Bill Lyons said: "We have

Submitted by S Carpenter on Wed, 2006/08/23 - 8:59pm.

Bill Lyons said: "We have moved that to 20 yrs with KPH responsible for the complete interior build out, including that of the observation deck to be operated by the city. The city is responsible for the exterior of the structure, HVAC, bird proofing. etc. "

Teeny Tim replied: "Why the city feels the need to throw that kind ofmoney around so a develoer can come in..." 

Looks like the kind of lease split that one should expect from a landlord/tenant relationship to me. In this case the city is justified in acting like a landlord because it is a city icon (thus the observation area).

Teeny, you need to have another run at explaining that. 

I'm glad the Sunsphere will be open for business. I admit I was skeptical when it got separated from the Candy Factory/Victorian Houses.  

w/ regards,

Scott  

CBT's picture

I think weekday lunch in the

Submitted by CBT (not verified) on Wed, 2006/08/23 - 9:39pm.

I think weekday lunch in the Sunsphere (absent some special menu you can't get elsewhere) is a tough sell. With the number of students in the Fort, a late-afternoon/evening bar would seem attractive. Some after work crowd might also make the trip accross Henley. A must-see for tourists and conventioneers. And, maybe most of all, downtown residents. I'm glad there's some possibility the Sunsphere actually gets used for something.

S Carpenter's picture

Maybe if they sell enough

Submitted by S Carpenter on Wed, 2006/08/23 - 9:50pm.

 

Maybe if they sell enough sammies and salad, they can support a liquor license w/ appetizers in the evening.  The real deal for them will be the catered on site functions, I would hope. 

Michael's picture

I'll agree that the utility

Submitted by Michael on Thu, 2006/08/24 - 8:26am.

I'll agree that the utility numbers from the study don't make sense.  My guess is that the costs were more like $3 per square foot per year.  The thing is a glass ball, with no insulation, stuck up in the sky.  It's not altogether different than a greenhouse.

But I'm not sure using the PBA numbers is a good comparison.  They weren't utilizing the entire thing.  And they weren't using it for as many hours a day as is anticipated.

As fond as I am of the Sunsphere, it's got a whole host of shortcomings as a building. It's likely that any plan that keeps it open is going to have to be heavily subsidzed by the city.  The thing is totally impractical.
~m. 

F-Stop's picture

This is great! I had my 7th

Submitted by F-Stop on Wed, 2006/08/23 - 1:12pm.

This is great!

I had my 7th or 8th birthday party in the Sunsphere, I can't remember which.

Les Jones's picture

And no visitor center?

Submitted by Les Jones on Wed, 2006/08/23 - 3:09pm.

What's a Knoxville re-development project without a pointless visitor's center? 

Hey, Les, why don't we just call each other assholes and get it over with. - Somebody on the old Southknoxbubba.net (if that was you, claim your quote and win net.fame!)

R. Neal's picture

No discovery center, either!

Submitted by R. Neal on Wed, 2006/08/23 - 3:12pm.

No discovery center, either!

Justin's picture

Maybe they can stick a

Submitted by Justin on Wed, 2006/08/23 - 4:28pm.

Maybe they can stick a gigantic telescope on top and call it Universe Sunsphere (after a $100M TIF of course).

Lansing's picture

Bird Proofing?

Submitted by Lansing (not verified) on Thu, 2006/08/24 - 2:49pm.

Oh Lord. Bird Proofing?
How about Homer Simpson proofing?

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