Board approves capital amendment and early acquisition of Cherokee Mills building

The committee approved two capital items: an FY26–27 state budget amendment request for non‑state‑funded capital projects and a resolution to pursue an early acquisition of the Cherokee Mills facility.

Austin Oaks presented the capital amendment list (five projects across the system, total value $469,000,000), noting the list includes two planned public‑private partnerships, such as an approximately 1,500‑bed addition at UT Knoxville and an energy/utility systems P3 at the Health Science Center. The committee moved to approve the amended request and voted in the affirmative.

On Cherokee Mills, Oaks said the system currently occupies about 140,000 square feet of a 192,000 square‑foot building and negotiated an early purchase option in the lease. He told trustees a bank loan structured as a 10‑year interest period with a 20‑year amortization would allow the system to acquire the building and "avoid 10 years of rent payments," producing an estimated cash savings of "$29,000,000 of avoided rent payments by moving forward with an early acquisition today." Trustees asked about appraisal and valuation; Oaks said the acquisition value is the lease‑negotiated price and no fresh appraisal had been completed. The committee adopted the resolution approving the loan and acquisition by voice vote.

Why it matters: the capital amendment enables UT to request authority to pursue large non‑state funded projects and the early acquisition of Cherokee Mills could reduce occupancy costs and secure facility control; trustees noted the financial benefits but asked for due diligence on appraisal and financing.

Next steps: staff will proceed with the loan approval process, follow state procedures for acquisition approvals and provide follow‑up documentation on appraisal and financing terms.