Downtown's most valuable piece of undeveloped land continues to sit vacant

Sunday, March 6, 2011 at 8:05pm
ThermalMain.jpg
Image courtesy of Aerial Innovations of Tennessee

“Go online, look at a satellite map of downtown Phoenix, and there you’ll see it: a checkerboard of dirt lots among the buildings. The city estimates that about 11 percent of the urban core is vacant.”

So begins a recent report, “Phoenix Officials Face Development Dilemma,” by National Public Radio. According to Carol Johnson, the planning manager for the city whom The City Paper contacted to verify the statistic and clarify the meaning of some vague wording, “urban core” represents the Arizona capital city’s 250-acre Central Business District, plus another 120 acres tacked on outside of downtown.

In downtown proper, Johnson said, “Around 20 acres of that is either vacant or surface parking, which is roughly 8 percent. This is mostly concentrated in the northwest corner of the downtown area.”

Add to that another 20 acres of vacancy in the 120-acre area between Roosevelt and Fillmore Streets, and you have in total about 40 acres vacant out of 375. This represents Phoenix’s “dilemma.”

Compared with Nashville, by all accounts another late-blooming boomtown, 11 percent vacancy is almost paltry.

Metro Planning Commission spokesman Craig Owensby told The City Paper that of the 668 acres in Nashville’s Central Business Improvement District, 131 — nearly 20 percent — are now vacant. (Of the total number of property parcels in downtown, a number Owensby didn’t have readily available, 37 percent are unfilled.) That doesn’t include parks or open public spaces, both considered non-vacant by the commission, Owensby said. 

Which naturally brings us to the former site of the Nashville Thermal Transfer Plant, the vacant lot on the west bank of the Cumberland River at First Avenue between the Shelby Street Bridge and the Korean War Veterans Memorial Bridge. At 12 acres, the site represents about 9 percent of the total vacant lots downtown.

At a total appraised value of $17.7 million, the eight property parcels that make up the thermal site may very well be the city’s most expensive empty field. 

Since the 2002 fire that destroyed the plant, Nashville has seen its population increase by tens of thousands as major industrial cities in the Northeast and Midwest experienced declines in similar or even greater numbers. It has begun construction on a $585 million convention center and it has courted a $250 million, 1-million-square-foot “medical mart,” slated to take the place of its old convention center. It’s on its second mayoral administration. And yet, the seemingly desirable property has lingered unused. 

In 2004, the city convened a 19-member task force to study the site and recommend a use for it. Their recommendation was overwhelming: In a 15-1 vote, the task force — largely made up of property developers and Metro Council members — voted for a proposal from the Nashville Sounds minor league baseball team to locate a $43 million stadium (to be financed by the developers) on the property.  

What followed was a 2005 memorandum of understanding between the city and the team, during which the property was committed to the plan. That document even kept the site out of Metro’s 2006 Riverfront Master Plan, according to Julie Oaks, spokeswoman for the Metro Development and Housing Authority.

But all that expired in April 2007, five months before then-Mayor Bill Purcell left office. In the summer of 2007, council members Mike Jameson and Rip Ryman sponsored a bill that would have transferred full ownership of the eight parcels to MDHA, who would then issue a request for proposals to redevelop it as a “public amphitheater, green space, and mixed use residential development.” But that proposal was voted down.

“At the time of the 2007 proposal, it was late in former Mayor Purcell’s term, and the fate of the thermal plant site had become a significant issue in the mayoral race,” Jameson, who was also on the Thermal Site Task Force, wrote in an email. “Each of the candidates was being asked about possible uses for the site at nearly every debate. So when Mayor Purcell proposed the redevelopment of the site through MDHA, it was unfortunately perceived by many on the council as an overreach by an outgoing administration, and they voted against it.” 

He added that due to Metro’s current bond obligations, it was unlikely that the legislation would come up again. “Now, the problem is money,” Jameson said. “We have limits to our bonding capacity; we probably can’t develop it ourselves.”

Debt service payments had gone from $1,551 to $2,450 per capita from 2000 to June 2009 and represent 9.5 percent of total government expenditures, according to a 2010-2011 finance report. From 2009 until 2030, Metro will have paid $2.3 billion in debt service, and that doesn’t take the debt on Music City Center into account. 

Since then, no one has developed a concrete plan. Though Metro government recently announced an in-the-works feasibility study for the Sounds stadium proposal, the Dean administration has not thrown its weight behind the thermal property, and a site recommendation could just as easily be elsewhere (like the Sulphur Dell property north of downtown, home to a minor league park from 1870 to 1963, and now some parking lots), or for that matter, even a no-build recommendation. 

“The mayor has said before that Sulphur Dell intrigues him — the history of the site, as well as the opportunity to make a major investment on the north side of downtown,” Dean’s spokeswoman Janel Lacy wrote in an email. 

Selling the property to private developers is likely a politically untenable option, despite its high value and the approximately $180,000 (residential) to $290,000 (commercial) it could create in annual tax revenues, at current rates, if it were sold at its appraised value.

Hypotheses abound as to why the site is still empty: The national real estate market took a nosedive, development priorities for Metro shifted to the Music City Center and, more recently, the fairgrounds, among others. 

“I could hazard a few guesses, but this is probably a question more appropriately directed to the Mayor. (‘The Mayor proposes. The council disposes.’),” Jameson wrote. “But I would note that the vacancy rate downtown results at least in part from the nature of previous development. A large proportion of surplus parking and older difficult-to-rehab structures contribute to that occasional feeling of ‘emptiness.’ ”

Should the stadium feasibility study not recommend the thermal site, Oaks said there are no contingency plans in the works, and she wouldn’t speculate on what they might be. For his part, Jameson said he would “caution against turning to one of the few remaining green spaces as the solution” to downtown’s vacancy issue. 

The City Paper spoke with the Nashville Civic Design Center’s Gary Gaston, who proposed an idea that could ostensibly put the site into use almost immediately, keeping it concrete-free and open to the river: a temporary green space. 

“We’ve talked about an amphitheater there, but the question is, how long will something like that take, and is it worth leaving it fenced up for the next two years or four years or however long that takes, or can it be turned into a very basic open space right now, fairly quickly, without a lot of infrastructure improvements or anything like that,” Gaston said. “Like a passive space, a passive park-like space for downtown in the interim between now and a real bricks-and-mortar decision on whether it’s a new development of mixed-use stuff or whether it’s going to be a really redesigned park.” 

But according to the mayor’s office, that could be more difficult than it sounds. Over the course of the 2005-2007 memorandum of understanding, Metro’s plan for environmental remediation on the site was reviewed and approved by the Tennessee Department of Environment and Conservation, but the site never received a final clearance from TDEC to indicate that no further action was required. According to Lacy, complete cleanup would require financial resources that the city would like to see used elsewhere. 

Lacy said that Dean, while supportive of a river amphitheater in general, is not “wedded to the thermal site” as its location and is officially neutral on a location for the stadium. 

“The mayor sees the thermal site as a valuable piece of property and feels whatever is there should be an iconic statement about Nashville,” Lacy said.  

15 Comments on this post:

By: shinestx on 3/7/11 at 6:03

Bill Purcell was not a leader. He was a bureaucrat with no vision for Nashville. It still astonishes me that citizens of this town continue to vote for do-nothing backbenchers to "lead" them. Seeing the response to the Sounds ballpark and the Fairgrounds proposals, I see a pervasive "small town" mentality that holds back this city. Look at Jim "Stupor" Cooper, who has done nothing to fund a new federal building to replace the 60-year-old Kefauver Building, which has been on the GSA replacement list for more than 15 years. But I guess because he's the son of a Dem-wit governor from 50 years ago, he's the choice of someone who has actual experience in business and the "real word". Meanwhile, Atlanta and Charlotte have surged way ahead of Nashville in the past 30 years. In Atlanta for example... after getting the funding for mass transit to expand MARTA, GA Congressman John Lewis recently landed $70 million to start a downtown trolley system to run between popular downtown tourist sites on the east and west sides of the CBD. That same Rep. Lewis has brought home a combined $500 million in the past 18 years solely to build and upgrade Atlanta's federal courthouse complex. "Stupor" Cooper can't even get a replacement for an obsolete building in Nashville. And just this past weekend, Gov. Bev Purdue of NC announced that Charlotte's two congressional representatives have secured $400 million to expand its Interstate system and its downtown light rail system. Funding for its new federal building is in the upcoming federal budget. Furthermore, the city of Charlotte's mayor and council recently won the high-profile Democrat National Convention in 2012. Just do a little comparison Nashville... when your guys cannot even get a large, prominent parcel of vacant downtown land developed! With no mass transit, clogged highways leading into the core and development languishing downtown, it's no wonder then when expanding businesses need space, they are forced to head to Williamson County. Drip... drip... drip!

By: shinestx on 3/7/11 at 6:04

Should have been written as: "But I guess because he's the son of a Dem-wit governor from 50 years ago, he's the choice over someone else who has actual experience in business and the "real world". "

By: shinestx on 3/7/11 at 6:11

From the article: "In 2004, the city convened a 19-member task force to study the site and recommend a use for it. Their recommendation was overwhelming: In a 15-1 vote, the task force — largely made up of property developers and Metro Council members — voted for a proposal from the Nashville Sounds minor league baseball team to locate a $43 million stadium (to be financed by the developers) on the property."

A 19-member task force? 19-member task force? 19-members? Ugh! That was obviously a move by the Purcell administration to sweep the matter under the rug. It's even believable that they knew the Sounds were incapable of developing the land. Just more examples of your Dem-wit "leadership" Nashville.

By: richgoose on 3/7/11 at 7:15

I am sure that the council and the mayor will find some use for this property that will be a tax burden for the productive citizens of Davidson County. Whatever the use and tax burden creates will be used by the underclass population.

By: Captain Nemo on 3/7/11 at 11:08

When I hear someone calling themselves rich and complaining about taxes. I think that maybe there is someone hiding money in an offshore bank or cheating on their taxes.

By: BigPapa on 3/7/11 at 11:41

Well it wasn't mean ol' Mayor Dean or Mayor Purcell that caused the Sounds deal to fall apart, it was the greed and mismanagment of the Sounds. They looked the gift horse in the mouf, hell stuck their head down to his tonsils.
I like the idea of an ampitheater there.. we're supposed to be Music City, why not feature that in one of the most desireable areas of downtown?

By: Captain Nemo on 3/7/11 at 11:51

That is about how I remember it taking place, BigPapa.

By: JeffF on 3/7/11 at 1:20

Personally I would think it would be nice to have something in downtown "on the tax roll" instead of "on the Metro bonding capacity". We have a downtown with little actual private development. This means we have a neighborhood that is receiving city services paid for by all the other actual neighborhoods in Nashville. Even the few private developments have been controlled by MDHA and have received TIF financing that ensures the growth in city services need is unmet by increased property taxes. Then to make it worse, any sales tax growth in this area, it now goes to the convention center debt whether the growth was created by it or not.

My ideal solution, wait 15 more months or until the real estate market is recovered, sell the property without the strings put upon it my MDHA, and send the first property tax bill as soon as possible. No private developer is going to waste valuable land with something that does not fit the real character of our downtown so the "we must keep development control" arguement for a silly public/private partnership is foolish.

Beware the developer who wants to partner with the city. This is code for "keeping the land off the tax roles" while using tax money to fund their project. Publicize the property nationally and internationally and let suitors know this is a purchase-only opportunity.

By: Captain Nemo on 3/7/11 at 1:54

That remains me of the HUSTON OILERS deal.

By: BigPapa on 3/7/11 at 3:06

Wait and try to get gaming here in TN and build a massive casino on the site. As far as the bball stadium, I think the sounds and fhe fairgrounds can both go and will be missed for all of 10 min. by less than 10 people.

By: CrimesDown on 3/7/11 at 3:21

Metro is tapped out. No money to spend toward large projects, where money can be directed to friends and partners. They can't get excited about any kind of project that they can't have their money grubbing fingers in. If Rich and Karl could figure out a way to benefit themselves, they would try to sell the Parthenon. When private developers are in charge, they tend to be more wise spending their funds. The one exception would be when they are having to pay back, for a previous favor.

By: JeffF on 3/7/11 at 5:16

I'm sorry, but I do not see private developers as the problem with the Deaniacs. Just about every boondoggle supported by this administration have been public development projects where nothing gets added to the needed tax base. The Omni deal is probably the only example private developer getting a good deal out of this administration.

I would be happy if the developers would be in charge. At least there would be a greater likelihood of some additional money coming into the funding of necessary and needed government services.

Too many people blame evil developers for community problems, but in every case there is a private landowner selling to the greedy developer and a whole lot of customers in line to buy what the evil developer is selling. Most people who hate developers would prefer that everyone live in downtown misery or just want no else to find the door out that they found for themselves.

By: NewYorker1 on 3/8/11 at 9:03

This site is the perfect opportunity to build a shopping venue like Atlantic Station in Atlanta. Parking underneath because of the sites potential to flood and shopping and restaurants above. All the stores that were in Opry Mills can relocate their businesses there and it will add a shopping venue for the people that come to the city for conventions. There, problem solved. Next issue please.

By: localboy on 3/9/11 at 9:19

BigPapa shoots...and SCORES!

By: localboy on 3/9/11 at 9:22

Let Carnival Kia relocate to the site and address arguments from both sides...a private enterprise-shopping development that puts the property on the tax rolls, combined with an entertainment venue!