Head north on Interstate 24 toward downtown Nashville, and a blemished view of a modern, Southern city comes into focus. At the doorstep to tall skyscrapers, a downtown buoyed by billions in new investment, are mounds of metal — crushed automobiles, appliances and unidentifiable scraps — that rise high, dot dozens of acres and border the east bank of Nashville’s Cumberland River.
Piles of rubbish surround industrial warehouses and machinery. At night, lights shine brightly over the landscape. From just the right angle, a massive scrap yard joins the illuminated big city, and becomes part of the Nashville skyline.
“It’s sort of like somebody got a black eye in the middle of a pretty face,” said Tom Hardin, a 17-year resident of the nearby Edgefield neighborhood in East Nashville, who comes across the view daily. “You’re driving down the expressway, you come around the corner there, and there’s this pile of rubble, cranes and warehouses.”
That image is arguably Nashville’s biggest eyesore: PSC Metals Inc., a 55-acre scrap plant that accepts, processes and ships out metal to steel mills. PSC, an Ohio-based company, oversees 49 similar plants across nine states, with the Nashville location said to be among its most profitable. Its proximity on the east bank is the relic of a Nashville of the 1950s, when the waterfront was a dumping ground for industrial operations. Urban revitalization hadn’t entered the lexicon back then.
Today, Nashvillians don’t just see a blotted landscape when they look at PSC. They see unrealized potential, prime real estate next to LP Field and an evolving riverfront. So do mayors of Nashville, past and present, who for years have sought to relocate the PSC plant to a different point on the Cumberland to pave the way for private economic development. The decades-old relocation effort has never advanced, however, as those attempting it have found a project too complex to engineer, made doubly challenging because of an enormous price tag.
Like his predecessors, Mayor Karl Dean has said PSC is on his “radar,” though progress on its relocation hasn’t taken off. Yet in recent months, those in his inner circle have started to call the scrapyard’s relocation an actual second-term “priority.” Evidence of a PSC relocation perhaps taking larger precedence includes polling on the matter, along with communication with a PSC investor key in making the project a reality. Still, mayor’s office officials aren’t out to create false hope. After all, with three and half years left in office, the clock is ticking. The task is monumental.
“The mayor recognizes that parcel of land is probably not currently being put to its highest and best use,” Matt Wiltshire, the director of the mayor’s Office of Community and Development, told The City Paper. Wiltshire called the acreage “a major scenic bend in the river that has got a scrap-metal yard in it that has historically barged construction.”
“I don’t want to overstate things, and I don’t want to set unreasonable expectations, but it’s a priority,” Wiltshire said before providing one more caveat: “The mayor has lot of priorities. Chief among them is protecting the taxpayers of Davidson County.”
Despite that caution, signs are out there that solving the PSC challenge is occupying more discussion inside the mayor’s office than in the past.
Dean’s campaign committee in January undertook a phone survey that polled Nashvillians’ mood on a property tax increase, which would be Metro’s first since 2005. Among the first questions: “If it [a tax increase] turned out to be used to provide funding to support regional economic development initiatives such as relocating the metals scrapyard on the east bank of the river next to LP Field, would you be more likely to support it, less likely or would it not make a difference?”
A month before the poll, Dean’s office released a study that recommended three potential locations for a new Nashville Sounds ballpark, which included the east bank near PSC. Sounds management immediately rallied behind this site. Though Dean has said a new minor league ballpark isn’t a “necessity,” he called the east bank location a potential “game changer.” An east bank ballpark could perhaps fit on city-owned land surrounding LP Field, but it’s hard to imagine its construction realistic if the
adjacent metals scrap yard were to remain standing.
The most significant break on a possible PSC relocation is communication: The mayor’s office in recent months made contact with an instrumental player on the PSC end — not company officials in Ohio but rather billionaire business magnate Carl Icahn, whose New York-based Icahn Enterprises owns PSC.
To say the mayor’s office is in even preliminary negotiations with Icahn isn’t accurate. But they’ve at least told him about their relocation and development hopes. Of course, one of the challenges of moving PSC could be Icahn himself, an investor known as a corporate raider who is listed among the top of Forbes’ Magazine’s richest people in America. His $13 billion net worth ranks him 25th nationwide. The 1980s film Wall Street was based partially on his career.
In short, Icahn might not easily turn his attention to an appeal by a mayoral administration in Nashville.
Joe King, vice president, general counsel and secretary of PSC, declined an interview request for this story. Jason Avery, general manager of the Nashville PSC location, did not return a call.
Metro Finance Director Rich Riebeling said he has looked across at the “spectacular” downtown views from the PSC grounds, situated south of LP Field, catty-corner to Nashville’s central business district and a stone’s throw from the soon-to-open Cumberland Park, a $9 million “adventure play-park.” Set to open in April, the park is the first installment of Nashville’s bold long-term riverfront redevelopment plan.
“You think about what could be there, and you could have a whole new major development — residential, commercial, mixed-use,” Riebeling said of the PSC site. “You could take an area and turn it into something that people would really find attractive and walkable near everything downtown. It has incredible upside.”
Add it up, and some development experts say PSC sits on one of the most valuable, underutilized pieces of real estate in Nashville — and perhaps the entire state. But, as Riebeling puts its, the site has “a whole host of challenges that make it complicated.”
“It’s not something we can just arbitrarily decide to do,” he said. “It’s got to have willing parties, and I think that makes it difficult. That’s why we have to gauge everything, sort of in the perspective of, ‘What’s realistic?’
“We’ve got a business that’s been operating there for many, many years,” Riebeling said. “It’s got some requirements.”
Indeed, PSC has no reason to readily vacate its spot on the east bank outside of a major financial incentive, a factor that’s created one of the greatest impediments to relocation. Its current location provides the three components the company needs to function: access to the interstate, the railroad and barges along the river.
That combination has made it tricky to find another location in Nashville where PSC could thrive. Acquiring the land via eminent domain, many say, is simply not an option. First, the company, as a metals scrap plant, is a necessity for the city. In addition, the Metro Development and Housing Agency is in the midst of a public relations fiasco after a judge ruled Tower Investments, a development group, deserved more for its Music City Center land than the city paid through condemnation. Metro has appealed that decision.
Those involved in relocation talks over the years — The City Paper spoke to more than a dozen for this story — say a number of potential relocation sites have been identified in recent years. One of these is north of downtown, along the Cumberland at Cowan Street in East Nashville. Property owners there, however, have expressed interest in developing their land, not selling it to a metals processing plant.
While PSC officials are unwilling to speak publicly on a potential relocation in Nashville, even those most eager to move the company recognize that the company provides an important function. The company shreds unwanted metals before delivering it to partner steel mills. It’s a form of recycling. Moreover, the company employs hundreds in Nashville and pays property taxes. The challenge is identifying a place where the business could carry out the same function.
“It’s just a complicated transaction, but it’s worth an effort,” Riebeling said. “That’s why the mayor’s charged us to see if there’s a way to get it done.”
A huge obstacle is cost. Some observers say just relocating the metals plant could require between $40 million and $50 million. More dollars would be required for environmental remediation of the property. A private entity, likely a developer, would presumably need to step up and offer a vision for the land.
With Dean’s administration currently weighing a tax hike, such a large-scale endeavor isn’t likely on the table immediately. Whether the city can afford a PSC relocation by the end of his term in 2015 is another question. Dominating Dean’s first term was the financing of a $585 million convention center. The Sounds would like help in constructing a new stadium. Dean has said he hopes to begin the process of building a new bus rapid transit line along a so-called east-west connector from East Nashville through downtown, all the way to West End Avenue. That project carries a projected $136 million price tag.
Even if money weren’t an issue, there’s also the matter of PSC’s multiple property owners. PSC, which falls under Icahn Enterprises, owns one-third of the entire 90-acre footprint from LP Field to the interstate to the river. A combination of other investors owns another third. The remaining tracts belong to Nashville’s Liff and Steiner families, whose history there goes back 60 years. They’ve leased their land long term with PSC through 2024.
For a deal to materialize, the mayor’s office would presumably have to coordinate an agreement with all parties. For now, they appear to have the ear primarily of the Liffs.
“Obviously, it’s a very valuable piece of property given its proximity to downtown,” said Adam Liff, managing partner of The Shelby Land Co. “It’s the gateway visually from many areas into downtown. And at some point, a higher and better use will come forth and liberate that property to be something greater than what it is today.
“With the right partners or at the right price — everything’s always for sale at the right price,” Liff said, adding that it’s still important that PSC find somewhere to continue to succeed and employ workers. He said he “roots” for the company. “If it’s going to happen, it’s going to take a public-private partnership of some kind.”
The PSC land has a long history as a place for refuse.
During the early 20th century the area was known as Hardison Lake, essentially a city dump. In 1954, the property became Steiner-Liff Iron and Metal. It remained so for four decades until the company was sold to Philip Service Corp. in 1997, which later became PSC in 2000.
The history of Metro officials trying to relocate the scrapyard is a shorter chronology. Phil Bredesen, mayor from 1991 to 1999, began the process of acquiring private east bank land via eminent domain in the mid-1990s for the construction of a new stadium to lure the then-Houston Oilers to Nashville. Acquisitions were limited, however, to the size of the stadium and adjacent parking, and never reached all the way south to PSC.
More recently, Bill Purcell’s administration, 1999-2007, had preliminary discussions on two separate occasions on relocating the property to the Cockrill Bend in West Nashville. But near the end of Purcell’s tenure, the investment group managed by Icahn — the famous billionaire magnate — purchased the company. Talks ceased.
Slowing the process to remove PSC from the east bank is that Nashville only recently started getting serious about cleaning up the riverfront. In 2002, a thermal plant on the west bank burned down, clearing 10 acres of open, still undeveloped city-owned real estate. The creation of the Nashville Riverfront Master Plan followed, which Dean’s administration has slowly started to fund.
“The riverfront is a great asset for Nashville,” said David Manning, finance director under Purcell. “But until the thermal plant was closed, and relocated off of it, there really wasn’t much of an opportunity there. Now that that has been closed, I think Nashville is catching up with what other cities have done with their riverfronts. Sooner or later, this piece of land has to be part of that.”
Newly elected Metro Councilman Peter Westerholm, whose District 6 includes the PSC site, said he heard PSC come up “fairly consistently” from voters while campaigning.
Some thought an opportunity had arrived in May 2010, when the PSC plant experienced significant flooding along with the entire city. At the time, former Metro Councilman Mike Jameson, Westerholm’s predecessor, called the PSC situation a possible “silver lining” to an otherwise horrific flood. Because of PSC’s damage, his logic went, the company would have to apply for new building permits. New industrial uses are no longer permitted in the waterfront, and PSC would be unable to operate there. Jameson’s pipe dream never played out.
In the months prior to Nashville’s historic flood, state officials under Bredesen’s gubernatorial administration had engaged in discussions with Dean’s office about the PSC property.
And in the final days of the 2010 legislative session, the General Assembly approved a Bredesen-engineered amendment to the state tax code that would enable the state to get involved in a future PSC relocation. Without directly naming PSC, the change authorizes the Tennessee revenue commissioner to “allow a relocation expense credit to any scrap metal processing facility relocating from a central business district or an area adjacent to the central business district and separated only by a waterway.”
That “expense credit” is still Tennessee law, but nothing has resulted from it. And today, under Gov. Bill Haslam’s administration, PSC isn’t even on the radar.
Clint Brewer, assistant commissioner of communications and creative services at the Tennessee Department of Economic and Community Development, said PSC is “not something we’ve dealt with so far.”
“That’s not to say we wouldn’t,” he said. “Certainly, Metro’s a good partner, and we’d have a conversation with them. If there’s some way we could help, we’d certainly have that discussion.”