UTC will not be purchasing the Renaissance Square building on M.L. King Boulevard because private funding for the project has dried up due to the recession, officials said.
"The funds just didn't come," said Dr. Richard Brown, vice chancellor of finance and operations at the University of Tennessee at Chattanooga.
In November, the UT board of trustees agreed to provide $1 million to fund the purchase if UTC officials could secure another $2.2 million in private funds from the University of Chattanooga Foundation, the Lyndhurst Foundation and the Benwood Foundation.
While initial talks seemed successful, the deal fell through a few weeks ago, Dr. Brown said. With the recession worsening, the foundations could not afford to support the project, he said.
"When you look at the economy, everyone is suffering," he said.
Dr. Brown said there was concern about the Renaissance Square asking price being too high, but the price did not kill the deal. UTC was trying to set aside about $3 million for the purchase.
The property, owned by the 28th Legislative District Community Development Corp., would have been used to expand the UTC SimCenter.
The SimCenter opened five years ago at 701 East M.L. King Blvd., with the UC Foundation paying to renovate the 31,000-square-foot building, which was donated by the city.
The $2.7 million Renaissance Square development has only one tenant, according to Chattanooga Times Free Press archives. Efforts to sell condos at the property have been unsuccessful, even though the 28th CDC reduced prices and offered incentives.
Jerry Adams, chairman of the UC Foundation, said UTC, the UC Foundation, the Benwood Foundation and the Lyndhurst Foundation formalized an expansion of the SimCenter a few weeks ago to increase programs, support faculty hiring and help the center monetize its research. The agreement will provide $6 million over a two-year period, UTC Chancellor Roger Brown said.
During talks, UTC officials discussed buying the Renaissance Square building and including it in the SimCenter expansion plan, Mr. Adams said. However, the property was not included in a final proposal, he said.
"That part of the proposal just went away," Mr. Adams said. "It wasn't that we turned that down."
Chancellor Brown said UTC officials also considered getting money to buy Renaissance Square only from the UC Foundation. However, falling returns on investments due to the stock market decline made officials realize that any funding from the UC Foundation was better spent on classrooms and faculty, Chancellor Brown said.
Sarah Morgan, program officer at the Lyndhurst Foundation, said she believed purchasing a new location for the SimCenter was premature. Officials didn't know what staff would be required to run the building or what it would mean for existing operations, she said.
"There was not a need for a new building," she said.