March 27, 2015
Details Outlined For Long-Planned Redevelopment of Convention Site
The future reinvention of the 1980s-era Nashville Convention Center took a major step forward today when officials announced developer OliverMcMillan Spectrum Emery Inc. will pay the city $5 million for the property.
The agreement notes that work can begin no earlier than six months after the transaction closes (an estimated date for which has not been announced), with the deal contingent upon OliverMcMillan Spectrum Emery meeting the redevelopment agreement conditions. The developer will have the option (though fees would be assessed) to extend the closing date into 2016.
Per agreement terms, Metro could be paid an additional $250,000 a year, starting five years after the developer obtains a certificate of occupancy and lasting 25 years. The developer also could have the option of paying Metro a lump sum of $6.25 million.
Metro will put the $5 million generated from the sale into the Barnes Fund for Affordable Housing, Mayor Karl Dean said, adding that OliverMcMillan Spectrum Emery will finance 90 percent of the project and assume "almost all of the risk."
The project is expected to generate $13 million in annual revenue via sales and property taxes. Currently the 6.2-acre site generates no revenue, given it is Metro owned.
The Nashville Convention Center Authority also has agreed in principal (a final vote is still needed) to fund construction of a 781-space two-level underground public parking garage. The authority would own the garage, according to the redevelopment agreement filed Wednesday with the Metro Planning Department.
The planning department filing is related to the Metro Planning Commission's required approval for the sale of any city-owned property. In addition, the Convention Center Authority is expected to consider next Tuesday to recommend approval of the redevelopment agreement to the Metro Council, which also must approve the sale.
The project — which eventually could carry an approximately $400 million price tag — will include retail, residential and office uses. In addition, the plan calls for a home for the long-planned National Museum of African American Music.
"We are missing a high-quality retail center [downtown],” Dean said. “This will make our downtown more complete."
"Including the National Museum of African American Music was a requirement and a top priority," the mayor added.
Pat Emery, who leads the development team, said that 20 percent of the construction work will go to minority-owned businesses.
The authority would have the option to build an additional 400-space third level to the garage and would finance via tax increment financing the estimated cost of $32 million to $44 million.
OliverMcMillan Spectrum Emery will incur the cost of razing the existing convention center, which is estimated to be $7 million. The developer will also finance construction of the 45,000-square-foot space for the National Museum of African American Music, which recently reached a fund-raising milestone (read here). That effort could cost up to $12 million.
In addition to the museum, the project could include on office tower with up to 250,000 square feet of space, 150,000 square feet of retail and entertainment space and a 20-plus-story residential tower accommodating up to 250 units.
The undertaking is about 15 months in the making and has involved extensive and detailed talks between Metro and the development team.
Recently, OliverMcMillan Spectrum Emery and Renaissance Nashville Hotel officials agreed upon a deal related to the effort. Renaissance leases meeting space from Metro.
OliverMcMillan is based in San Diego and is known for developing spaces for high-end retailers.
Link to original article here.