April 21, 2015
Few Opponents Surfacing as $400M Project Faces Key Test
Nashville Business Journal
A majority of Nashville's Metro Council appears poised to back a $400 million overhaul of the city's original convention center site.
The council is set to vote tonight on a measure detailing the deal between Metro, which owns the 6.7 acres at 500 Broadway, and co-developers Spectrum | Emery Inc., of Cool Springs, and OliverMcMillan, of San Diego.
The site offers the rare chance to dramatically redevelop a sizable, prominent property in the epicenter of the nation's fastest-growing metro areas. Emery and OliverMcMillan are pitching a project featuring a 27-story apartment tower, a 24-story office tower and 205,000 square feet of retail, restaurants and entertainment space — a one-time, 60 percent boost to the retail space already downtown.
The project has received a comparable amount of attention and scrutiny over the protracted and arduous path to get to this point, and questions about whether Metro is selling valuable real estate at a steep discount.
"It's been one-and-a-half years. There aren't that many questions left to be asked," said Pat Emery, president of Spectrum | Emery.
Still, council members had some at the ready on April 20, at a joint meeting of three Metro Council committees. There, the developers and Metro's finance chief, Rich Riebeling, fielded about 45 minutes worth of questions.
It was a prelude to the first and only full council debate on the matter, which will occur at tonight's session. By all indications, a majority will approve of the deal with Emery and OliverMcMillan.
Even still, come this fall, the developers likely will face many of these same questions anew. There will be huge turnover within Metro Council in the August elections: 24 of the 40 members are term-limited, and another three are not running again. Mayor Karl Dean also is term-limited and will be out of office after the elections.
It was a fate council members were aware of.
"For this administration, and for this council, this is the 11th hour and this is a big deal," said councilmanRonnie Steine.
"It seems to me this addresses several different kinds of dreams for downtown: Living, retail, the National Museum of African American Music," Steine said.
Councilman Fabian Bedne voiced concerns that the buildings would be too close to the street, at a height and density that he felt deviated from Nashville's roots. The developers tried to reassure Bedne that more involved designs, to be done at a later date, would take that into account.
"Towers going up does change the skyline, for a long time," said Dene Oliver, CEO of OliverMcMillan. "It's all part of the evolution of a city."
Most questions centered on money, and how Metro would be protected in case the worst-case struck.
Could the developers pull together financing? (They said they could, with the help of mutual financier JP Morgan. They won't be able to buy the land until Metro is reassured that the financing is committed, per the terms of the agreement.) Could the Nashville Convention Center Authority afford to build a public parking garage for the project, costing as much as $44 million? (Riebeling noted that the authority's rainy-day fund is a robust $45 million, and that the authority is successfully operating a much larger garage at Music City Center. "Frankly, they're in pretty good financial shape," he said.)
"There's always the risk, in any transaction, that the developers can't secure financing. If so, we'd be out time. ... But other than that, all the risk is on the developers," Riebeling said.
"These guys are putting up a lot of their worth and value, shouldering a big risk. They're confident this has a bright future," Riebeling added.
Typically, items before Metro Council go through three votes. The first and third are usually formalities. The second is the pivotal vote because it's the fullest airing and debate of the subject at hand.
For the convention center deal, tonight is the second of those three votes. If approved again, the matter would come up for a final decision on May 5.
The original convention center was rendered obsolete by the opening, two years ago, of Music City Center.
Link to original article here.