April 20, 2015
Old Convention Center Sale Clears Committee Votes
Mayor Karl Dean's ambitious plan to transform the old Nashville Convention Center into a massive mixed-use development anchored by retail took a key step forward Monday.
Three Metro Council committees voted unanimously to recommend approval of the sale of the center's prime 6.7-acre property on Commerce Street to a development team led by Franklin-based Pat Emery. The team's plan: demolish the 28-year-old structure to make way for a new $400 million private development.
The proposal, billed as a "gateway to Lower Broadway," calls for 205,000 square feet of retail, restaurant and entertainment uses; 300,000 square feet of class A office space; 350 apartment units; and space for a long-awaited new National Museum for African-American Music.
Monday's committee votes set up a critical second of three votes before the full Metro Council on Tuesday night. Approval is expected.
Calling it one of the most important projects the mayor has undertaken, Metro Finance Director Rich Riebeling told council members it would convert a non-performing asset into a new destination that would produce around $8 million in total local property and sales tax revenue.
He described the risk as minimal to the city. Metro's Convention Center Authority would oversee construction of a new $32 million 781-space parking garage, paid off by parking revenue. The Metro Development and Housing Agency has agreed to $25 million in tax-increment financing — all which would come from revenue the new development produces.
"You always have the risk in any transaction that the developer is unable to secure the financing on a project," Riebeling said. But he stressed that Metro would not officially turn over the property to the developers until financial satisfaction is met.
Developer Spectrum | Emery has partnered with Oliver McMillan, a San Diego-based commercial real estate firm, whose recent work includes Buckhead Atlanta, which is comprised of upscale retail, restaurant and residential.
Developers have agreed to pay $11 million to Metro — $5 million of which would occur at closing of the land — for property that was appraised at $27 million. Closing is to take place by the end of this year, but developers would have four opportunities to extend the deadline by three months by paying $250,000 for each quarterly extension.
"It's structured that way as a worst-case scenario," Riebeling said. "I have full confidence that they fully intend and want to and will close on this property."
In addition to the land payment, developers have agreed to pay $7 million for the center's demolition, $11 million to build the museum and $7 million to build new meeting space for the adjoining Renaissance Hotel
The council's Budget and Finance, Planning Zoning and Historical as well as its Convention, Tourism and Public Entertainment Facilities committees each took actions to approve on Monday.
There were few questions on particulars of the financing. Most inquired about details on the retail and state of the National African-American Music Museum — a project private philanthropists have discussed for years, but one that still hasn't materialized.
"This project is addressing several different types of dreams for downtown — clearly living, clearly retail and the dream of the African-American Music Museum is one that has been hoped and promoted for a long time," At-large Councilman Ronnie Steine said. "Bringing that to life is hugely important."
Henry Beecher Hicks III, president and CEO of the museum, said that landing such a prominent location will improve private fundraising for the museum. However, if the museum's financing doesn't come together, Riebeling said that its new space would be used for additional retail instead.
Oliver McMillan has planned a retail component that would line a new road that would connect to both Broadway and Fifth Avenue. A park would face Ryman Auditorium, the project's office tower would front Fifth and Commerce Street and the residential tower would be at the southwest corner of the property.
An economic analysis conducted on behalf of the development team by Mark Burton, an economics professor at the University of Tennessee, found that the project would have an annual economic impact of $82 million and directly or indirectly employ 2,753 people.
Link to original article here.