Construction Starts on $70M North Knoxville Housing

Dominion Group is renovating the historic St. Mary's hospital building into 109 apartments as part of a 160-unit development.

Updated on Nov. 4, 2026 in Construction

Weathered red-brick former hospital building partly wrapped in scaffolding, with a yellow construction crane and new timber townhome frames beside an oak tree under a clear sky. — Construction has started on a $70 million redevelopment of the former St. Mary's Hospital site in North Knoxville, which will add about 160 housing units, including 109 apartments in the historic hospital building. AI Illustration. Upload story photo >

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Construction has begun on a $70-million housing development on the former St. Mary's Hospital site in North Knoxville. The project will add approximately 160 new housing units, including renovated apartments and new townhomes.

Why it matters

The project adds housing on a site previously used for medical and public purposes, and it includes accessible units for seniors. Its financing relies on affordable housing tax credits and a $2 million contribution from Knoxville's Affordable Rental Development Fund.

The $70-million project will add about 160 units, including 109 apartments in the renovated hospital and 21 townhomes, with a $2 million contribution from Knoxville's Affordable Rental Development Fund. Rent levels and the final cost breakdown have not been detailed in the available information.

The players

Dominion Group

Dominion Group is a Knoxville-area developer overseeing the renovation of the historic St. Mary's hospital building into apartments.

Lincoln Memorial University

Lincoln Memorial University is a private university whose College of Dental Medicine previously operated on the former hospital site.

The details

Local developer Dominion Group is preserving the historic St. Mary's hospital building rather than demolishing it, converting it into apartments ranging from one to three bedrooms. The city purchased the property from Tennova in 2019, and the site previously hosted a Lincoln Memorial University dental medicine college and a city public safety complex.

2019: The city purchased the property from Tennova.
2022: Lincoln Memorial University opened its College of Dental Medicine on the site.
2023: The city opened a $70-million Public Safety Complex on the site.
2024: The McNabb Center opened a mental health facility on the site.
Fall 2028: Construction is expected to be completed.

Market Landscape

The project's use of affordable housing tax credits follows a federal financing model that developers use to fund rental housing with income-restricted units. It repurposes a former hospital site rather than building on undeveloped land, reflecting a pattern of adaptive reuse in urban infill development.

For Knoxville residents, the project adds about 160 housing units, including 40 accessible apartments for seniors and affordable units supported by tax credits. Renters and prospective buyers in the area may see more housing options once construction is completed in Fall 2028.

The takeaway

Adaptive reuse of historic institutional buildings can add housing without new land development, though completion timelines extend several years. Residents tracking the project can watch for the Fall 2028 completion date.