Knoxville’s Community Development Corporation was joined by city and business leaders on Wednesday to break ground on the second phase of the Western Heights Transformation Plan in Northwest Knoxville. The plan is aimed at revitalizing KCDC’s largest public housing property, which opened in 1939.
Phase 2, located at the intersection of McSpadden Street and Virginia Avenue, will include two mixed-income residential buildings. Together, they will provide a total of 52 housing units, ranging from one to four bedrooms. The ground floor of one of the buildings will house a health clinic operated by the University of Tennessee Medical Center. The clinic will be staffed by a physician, two nurse practitioners and four medical staff.
Dr. Keith Gray, president and CEO of UT Medical Center, said that in addition to primary care, the new health clinic will offer OB-GYN and prenatal services.
“We know that in a lot of these underserved areas, infant and maternal mortality is among the highest in the state and among the highest in the country,” he said. “If we can interact and partner and educate patients on the front end, then the maternal outcomes will be better, and also the infant outcomes will be better.”
This follows a December report from the Tennessee Department of Health that found East Tennessee had the highest rate of pregnancy-related mortality from 2020 to 2022, with substance abuse identified as a leading contributor.

The Knoxville Police Department will also have a substation in one of the buildings. Western Heights is one of three zones monitored by the city’s Project Tender Loving Care, or TLC, which implements place-based policing in areas with high crime rates.
Knoxville Police Deputy Chief Brian Evans said the substation is intended to foster long-term relationships with the community.
“Community Policing is about forming partnerships, being accessible and being a part of a neighborhood to address crime,” he said.
The new housing development will also include an art center. Phase 2 is scheduled for completion by fall of 2026.

The multi-phase project is funded in part by a $40 million Choice Neighborhood grant from the U.S. Department of Housing and Urban Development, awarded to the city in 2022. Nearly $27 million in city funds across several budget cycles has been invested in the plan.
The Western Heights transformation plan is expected to be fully completed by 2029 with 479 new mixed-income units.