Council Approves Affordable Housing at St. Mary's Site

City Council tonight (July 21, 2026) voted unanimously to renovate the historic St. Mary's Hospital building as affordable senior housing and build 130 additional affordable townhomes and apartments on the North Knoxville site.

The votes on this and two additional items support Mayor Indya Kincannon's goals of investing in the creation and preservation of affordable housing and keeping residents stably housed.

Council approved $2 million from the City's Affordable Rental Development Fund to support the development of affordable apartments on the former St. Mary's Hospital site. Local developer Dominion Group (DGA) has worked with Knoxville's Community Development Corporation (KCDC) and Oakwood Lincoln Park neighbors to develop a proposal responsive to the neighborhood's' needs and concerns.

The $70 million Riella at Oakwood project includes:

o Preservation and renovation of the historic St. Mary's hospital building to create 40 accessible apartments for seniors
o 21 new townhomes
o 109 new apartments with 1-, 2- and 3-bedroom units

This vote represents a landmark advancement in the redevelopment process of the St. Mary's Hospital site which began when the City purchased the property from Tennova in 2019. Since that time, the site has been reactivated. Lincoln Memorial University opened its College of Dental Medicine in 2022, the City open its Public Safety Complex in October 2023, and McNabb Center open its EmPATH Facility in May 2024.

"This collaborative plan meets two major goals for the St. Mary's site: preserving the historic hospital building and adding much needed housing options," said Housing and Neighborhood Development Director Kevin DuBose.

Discussions between City leaders and neighbors began in earnest on Feb. 9, 2023, at the North Knoxville Community Open House held at Fulton High School. At the event, KCDC and the City gathered public input about the future of the site; this feedback has been crucial in developing a thoughtful conceptual master plan.

KCDC representatives have had regular meetings and conversations with the Oakwood Lincoln Park Neighborhood Association to discuss the project, including the site's rezoning (from Institutional to Residential) and DGA's site concept and renderings, which were positively received.

Investments in emergency repairs, accessibility improvements

Also on Tuesday, Council approved an agreement with Knoxville-Knox County Community Action Committee (CAC) for $450,000 in federal Community Development Block Grant (CDBG) funding to support the Emergency and Minor Home Repair program. Approximately 43 owner-occupied single-family homes will receive improvements that address immediate health and safety concerns as well as energy efficiency.

In addition, Council approved the allocation of $350,000 in federal CDBG funding to support minor home repair program through Neighborhood Housing Inc's Operation Backyard program. This funding aims to deliver minor home repairs and exterior accessibility modifications to approximately 68 homes occupied by low- and moderate-income homeowners and tenants in rental properties.