"Both of these projects are important to our community," said Mayor Bill Haslam.

"By separating these projects we can move forward with each at the earliest possible time, and we can move forward to make each successful on its own terms," the mayor noted.

The transit center will serve as a centralized facility that can accommodate multiple modes of transportation.

The Haslam administration has concluded that the 500 block of Gay Street, which includes the former S&W Cafeteria building, does not have sufficient capacity to allow the transit center to expand in the future as needs arise.

"We are committed to a transit center that can expand as demand for buses and other modes of transit grow," the mayor stated. "We must build a center that can accommodate growth."

The city will begin immediately evaluating alternative sites within downtown for the transit center. A mixed-use development will be considered, but the driving force in designing the center will be to accommodate transit options.

The cost of the transit center, estimated roughly at $17 million, will be funded primarily through federal grant dollars. City officials have met with the Federal Transit Authority's regional office and received approval to use funding already appropriated to proceed at a new site downtown.

Locating a cinema within the 500 block of Gay Street was the preferred alternative of the Kinsey Probasco development team, which participated in an extensive public process when creating the Market Square design plan. The cinema will serve as an anchor tenant that will complement private investments and public improvements that have already occurred on the square and within the downtown district.

Crandall Arambula, which developed an urban design framework for downtown through the public visioning process, Nine Counties. One Vision, also pinpointed Gay Street as desirable for retail development.

"Separating these two important developments allows each to proceed on the earliest possible timetable," Haslam stated. "My administration will be focused on leveraging the dollars and talent necessary to develop each into successful projects that will serve the citizens of Knoxville for years to come."