MDHA files suit to begin convention center condemnations

Monday, October 19, 2009 at 12:45pm
Music_City_Center.jpg

The Metropolitan Development and Housing Agency filed suit Friday to take control of several properties within the footprint of the planned downtown convention center.

Using eminent-domain powers granted to it by the Metro Council earlier this year, MDHA deposited a total of $31.3 million with Davidson County Circuit Court to cover the amounts it is offering to seven owners whose land it seeks to condemn.

The amounts offered add up to almost $6.9 million more than the cumulative value of the properties as appraised for property taxes at the beginning of 2009. On average, the city is offering a 26 percent premium over tax-appraisal value.

The proposed site for Music City Center is bordered by Demonbreun Street to the north, the proposed Korean Veterans Boulevard extension in the south, Eighth Avenue South to the east and Fifth Avenue South to the west.

MDHA began making offers to property owners in the area at the end of August. Its board last week voted to authorize litigation against owners with whom it has been unable to strike a deal.

The owners and properties affected are as follows:

• Tower Music City II LLC, an affiliate of real estate developer Tower Investments Inc. MDHA has offered $14.8 million for Tower's parking lot at 301 Fifth Ave. S., which has an appraised value of $12.6 million. At 5.66 acres, this parcel is by far the largest in the center's footprint.

• Greyhound Lines Inc. The offer for the bus station property along Eighth Ave. S. is $4.9 million; the parcels are appraised for $3.8 million.

• Joe Chambers, proprietor of the Musicians Hall of Fame and Museum, with properties at 306 Seventh Ave. S., 312 Seventh Ave. S. and 309 Sixth Ave. S. Offer: $4.8 million. Appraised value: $3 million.

• Steve C. Cooper, the Memphis-based strip-club operator who runs Christie's Cabaret at 306 Eighth Ave. S. and owns two nearby parking lots. Offer: $2.8 million. Appraised value: $2.3 million.

• Nashville Downtown Platinum LLC, owner of properties at 201 Seventh Ave. S. and 611 Demonbreun St. Offer: $1.8 million. Appraised value: $1.2 million.

• Billy D. & Beverly Pitt, who own a building at 211 Sixth Ave. S. Offer: $1.25 million. Appraised value: $926,000.

• Hugh C. Cates, A.M. Downing, Richard Downing and Donna C. Downing, who own a parcel at 208 Seventh Ave. S. Offer: $905,000. Appraised value: $637,100.

The lawsuits also name tenants, lenders and other parties whose rights may be affected by the sale.

Filing the complaints on behalf of MDHA were attorneys Renard A. Hirsch Sr. and Carolyn Piphus of Smith & Hirsch PLC as well as G. Brian Jackson and Charlnette A. Richard of Miller & Martin PLLC.

According to a deed recorded on Friday, MDHA has bought three parcels in the convention center area owned by a partnership called Taylor-Winningham-Moore. The deed does not provide the purchase price; the lots were appraised for $859,000.

The total cost of land for the proposed convention center was estimated in April of this year to be $55 million, but MDHA later borrowed $62 million to acquire the necessary SoBro property.

The United Methodist Publishing House and several other landowners in the center's footprint have yet to turn up either in deeds or in condemnation lawsuits.

The City Paper has not been able to reach MDHA officials today. This story will be updated later if further details are forthcoming from the agency.

 

26 Comments on this post:

By: Floyd2 on 10/19/09 at 2:34

The amounts offered add up to almost $6.9 million more than the cumulative value of the properties as appraised for property taxes at the beginning of 2009. On average, the city is offering a 26 percent premium over tax-appraisal value.

Twenty-six percent over appraised value sounds like a good deal to me.

By: JeffF on 10/19/09 at 3:27

Will the center even be built with concrete and steel now? The word is out, cut the prices so we can get down to a price that the revenue stream will cover. They are about $16-17 million per year short and no one buys that sales tax collections in the center and hotel will meet a fraction of that amount.

The total for this magical mystery place (hotel and garages included) will have to be cut to about $500-550 million to meet the revenue streams and operating losses. Sometime in January someone will point out that it would not do this majestic project justice to use brick instead of Italian marble and it will be shelved, putting the project in mothballs but retaining all this new found land. Of course they will fight tooth and nail to keep that revenue from being moved by the state legislature to an actual and needed governmental project.

By: govskeptic on 10/19/09 at 4:33

Floydon2 and I agree on this. Sounds like a pretty good deal
for the landowners. If the entire projects just runs 26% over
estimate it will beat the Sommet Center and the existing
convention centers which ran about 40% over estimate.
Deal for the taxpayers/owners not so much!

By: idgaf on 10/19/09 at 7:33

Shouldn't there be a vote on this before they start condeming property?

I am thinking they have a nice lawsuit if the CC never gets built.

I anticipate if necessary a FORCED public vote.

By: govskeptic on 10/20/09 at 4:53

The Register of Deeds needs to have immediately upon filing
of the new deeds the price instead of trying to hold back from
the public and media what the city paid for each parcel. Corporate
titles should also have to name a couple of principals.

By: nvestnbna on 10/20/09 at 6:37

The Register of Deeds needs to have immediately upon filing
of the new deeds the price instead of trying to hold back from
the public and media what the city paid for each parcel. Corporate
titles should also have to name a couple of principals.

I think MDHA is trying to get owners to sign confidentiality agreements with, I suppose, the purpose being to prevent the public and possibly other owners from knowing the prices.

Maybe this is the City's version of 'transparency'.

By: pandabear on 10/20/09 at 6:40

What's the point ?

It's going to come to a vote or the public is going to raise the roof.
Deano knows the power of a lawsuit, and there will be many.
These same idiots who want to pay a huge premium for property
and disturb taxpayers businesses prematurely are the same ones
who are telling us "financially sound" their "plan" is.

Truth is, it's not their money, the people who benefit are the land
dealers, developers and builders, and the people who pay are
you and me.

It's time for a vote !

By: pandabear on 10/20/09 at 6:46

Oh, and people build and nurture their dreams, they don't
think it's "a good deal" to sell them at "26% over appraised value".

By: idgaf on 10/20/09 at 8:02

Beside losing taxes on these propertys how many jobs will be lost?

When you are trying to spend over a billion dollars of our money we should have a vote on it. (most likely closer to a billion and a half)

CC's are in trouble all of the country and one is in forclosure. There is an oversupply.

Anyone have that dedicated website for them?

By: airvols on 10/20/09 at 8:24

Here we go again, let's vote, let's not, the time of action is now this has been studied and studied for years. Same people oppose this that opposed everything else in Nashville. The Crafton crowd needs to move on and let Nashville become what it has potiential to become, the greatest city in the South!

By: JeffF on 10/20/09 at 9:42

I am still waiting to hear from a study or see a debate. The only opposition allowed on the subject has happened away from the council. The "study" was performed by a group that has freely admitted that they would not be in the business very long if they did not come back with the results expected by the fans of these centers. The "community meetings" were put on by proponents and left zero room for information from the dark side of the industry. Outrageous claims as to the validity of the industry (30,000 new jobs, 2nd biggest industry, 1 million new visitors, etc) are still coming out of the mouths and pens of the more gullible elected officials and proponents.

Than only thing done to death on this subject is the ra-ra. Cheerleaders have pushed debate off with their harping to the point where there suddenly is no time for discourse due to some phantom meetings being sold in 2013.

By: producer2 on 10/20/09 at 9:53

Really, they "admitted" this? What does that mean? Could you just lay off the BS for one minute or is everything you say just a crock? The community meetings were a conspiracy? What, did they lock you out? If you have an issue either run for office or vote for who you want to represent you. IF neither of those things happen to work out then sorry, you live in a Republic and that is how it works. If you have studies that show that the MCC in Nashville will fail then publish them. (here comes all the Des Moines, Albany, Niagara Falls info you could possibly handle)

By: producer2 on 10/20/09 at 10:33

I'm waiting........

By: govskeptic on 10/20/09 at 10:37

PR to the rescue. Billing hours continue to climb!

By: producer2 on 10/20/09 at 11:45

C'mon you can do better than that. I am just one of thousands who are proponents of this facility. Thinking everyone is an opponent is pretty short sided on your part.

And I am still waiting......

By: nvestnbna on 10/20/09 at 12:26

from Producer2 The community meetings were a conspiracy? What, did they lock you out?

Yes, that's kinda how it worked. If it was something they, the touristas, agreed with, it got top billing, if it was contrarian, then if got mentioned at all, it was on page 13 of an addendum.

Example? How many times did the promotors state the Civic Design Center "chose" the location, yet this never happened. They listed and rated locations and this particular location was only rated "strong" with specific conditions, all of which were cast off early in the design process, hence according to the Civic Design Center's report this location can no longer be considered "strong".

This is the problem with the touristas, they are on their own track, spending millions to push this thing through and pushing anyone aside that offers any alternate vewpoint.

By: producer2 on 10/20/09 at 12:54

Man you are working overtime today. Still don't have a rational argument though. People from MDHA and the CVB were made available to ANYONE who wanted a community meeting. they are probably still available if you want to set one up. You are right though, they will be pro MCC. Hope that does not come as too much of a shock to you.

By: sidneyames on 10/20/09 at 1:21

By: idgaf on 10/19/09 at 8:33
Shouldn't there be a vote on this before they start condeming property?

Idgaf, they already voted in their own minds. You can bet this is a done deal and we're not gonna get to vote on it or the higher taxes we're facing.

By: JeffF on 10/20/09 at 3:17

Isn't that nice, proponents were made available to sell their project while council committee chairmen threw temper tantrums when opponents staged a debate with learned opposition and a whole lot of statistics and historically backed data.

Here goes the industry news, unfortunately for the industry this marks the 13th straight year of only bad news. The closest thing to good news was their getting new buildings and the successful spinning of bad news. No one seems to print these types of stories in cities still debating new facilities. Having the newspaper publishers on the convetion board usually helps this happen.

The Industry as a whole (hole)
Cities Chase Ghost Conventioneers in Space Race: Chart of Day
http://www.bloomberg.com/apps/news?pid=20601109&sid=anJNcvHOHRiU
Government Finance Officers Association Paper
http://www.gfoa.org/downloads/RiskandReality.pdf

Atlanta
Georgia World Congress Center reports $1.3 million loss
http://www.ajc.com/business/georgia-world-congress-center-102746.html
"It also is expected to be followed by a bigger loss in fiscal 2010, which began July 1."
"In addition, he said hotels, which have hundreds of vacant rooms, are finding ways to lure small meetings away from convention centers by offering packages with rooms and meeting space.
That could hurt the GWCC, which projects a loss of $5.7 million for fiscal 2010."

Indianapolis
http://www.indystar.com/article/20091010/BUSINESS/910100315/CIB+lays+off+9+at+Conseco++convention+center

Orlando
Officials seek solutions as debt mounts at Orange County Convention Center
http://www.orlandosentinel.com/business/tourism/orl-subsidy-convention-record-090509,0,5214443.story

Honolulu
http://www.honoluluadvertiser.com/article/20090920/NEWS01/909200361/Hawaii+convention+center+falls+far+short+of+economic+goals
http://kgmb9.com/howard/2009/09/20/costs-and-benefits-of-monuments-to-our-civic-pride/

Austin
http://www.statesman.com/business/content/business/stories/other/2009/09/18/0918cbriefs.html
http://www.kvue.com/news/top/stories/091709kvue_convention_business-cb.18d6eeee0.html

Portland
http://www.oregonlive.com/gresham/index.ssf/2009/09/portland_convention_center_hot.html
http://www.kgw.com/news-local/stories/kgw_091909_new_convention_center_hotel.1960498f5.html

Raleigh
http://www.wral.com/news/local/story/5923312/

New Orleans
Convention Center anticipates fourth straight deficit
http://www.neworleanscitybusiness.com/viewStory.cfm?recID=33980

I can do the smaller cities if you want Producer. Those are even darker but you seem to think of Nashville as big time so I will leave those out.

By: EThomasWood on 10/20/09 at 6:29

By: govskeptic on 10/20/09 at 5:53

The Register of Deeds needs to have immediately upon filing
of the new deeds the price instead of trying to hold back from
the public and media what the city paid for each parcel. Corporate
titles should also have to name a couple of principals.

I wrote this article and am sorry I could not respond to this concern more promptly. Late yesterday, MDHA told me the price of the parcel whose sale was recorded at the Register of Deeds on Friday (the Taylor-Winningham-Moore property). It sold for $1.5 million; it was appraised for $859,000.

The deed did not provide the purchase price because the transaction was exempt from the usual recording tax, which is normally based on the purchase price.

By: govskeptic on 10/20/09 at 6:52

EThomas: Thanks for the update, on the Register of Deeds. Hopefully this will continue throughout the
process. As named I'm just a "skeptic".

By: Time for Truth on 10/22/09 at 9:45

I rarely watch Fox News, local or national, but baseball is on the local channel. They did a short piece on the land aquisition. I don't remember the exact numbers but it was reported that 'money is available' to increase land offers if needed. Joe Chambers, for one, has little interest in selling.

I imagine the billable hours generated by two big law firms for this nonsense, at taxpayer expense, will eat up another chunk of money. Greyhound will likely be a tough opponent if it goes to court.

This project has already been one heavy-handed, over-budget, blunder after another and we haven't even seen Deano's smoke-and-mirrors finance plan yet. All for a facility designed for an industry business model headed for obsolescence. If we don't get a vote on this directly, we need to clean house at Metro Council in 2010.

Airvols, Atlanta set out to become the 'the greatest city in the South!' and now they have gridlocked traffic, a diminishing water supply, and, yes, a debt-ridden convention center. You should be careful what you wish for.

By: producer2 on 10/22/09 at 12:45

JeffF

Here is the part you don't want to talk about. This is from the Raleigh post above:

"The facility hosted 273 events in its first year, with a combined attendance of 353,041. The number of events was 6 percent above projections made last year by a New York-based consultant hired by the city, while the attendance figure was 56 percent above projections.
"The facility was not designed to make a profit. The facility was built to put heads in beds," Okun said. "We delivered on the hype."
Seventeen conventions that were held at the convention center during the year have already decided to return to Raleigh in future years, she said.
"We work very, very hard to back-fill what will make us money," she said.
Mayor Charles Meeker agreed that the convention center was an unqualified success at bringing people to Raleigh for conventions and trade shows last year. He added that area taxpayers aren't subsidizing the losses because the facility is funded through hotel and restaurant taxes.
"What it's designed to do is bring people here, in part to have meetings, but also to bring their money here to Wake County, where it's spent," Meeker said. "The county gets the return of that money by (having) people employed as well as (having the money) bouncing around the community."

This is what people like Heywood Sanders won't tell you. Yes the actual building ran at a small deficit which was more than made up by the millions of dollars collected in hotel motel taxes. If the building breaks even AND you make millions in taxes you are really doing well. Most people get it and your little scare tactics won't sway them. You posted the link, I just copied the portions you don't talk about.

By: producer2 on 10/22/09 at 12:54

From the Austin article:

"Benear is focusing on 2012. He says it will be a record year for Austin. He says there will be more rooms on the books now than they've ever had."

When would the MCC open... 2013. Really I couldn't ask for a better set of info being posted. Did you actually read these first?

By: producer2 on 10/22/09 at 12:58

The hits just keep on coming, here a little ditty from the Big Easy...

"Cities generally accept that convention centers will operate at a loss provided they stimulate the overall economy, Johnson said, but the Morial Convention Center’s track record before Hurricane Katrina was solid.
“Historically, we did break even before 2005,” he said. “But after Katrina struck, the building was closed and under renovation for the rest of 2005 and part of 2006.”

"Convention visitors to New Orleans typically spend a third more than regular tourists, and nearly half of them add a couple of vacation days to their business trips, according to the Convention and Visitors Bureau.
Hemphill said attendance at Morial Convention Center events this year is projected to hit 684,355, just 0.22 percent less than last year’s 685,861.
As for the future, Johnson is optimistic but at the same time realistic that competition has altered the landscape.
“My crystal ball is no better than most these days, but I do see some glimmers of hope that the economy is bottoming out,” he said. “It may be another 12 to 18 months, however, before we begin to get back to pre-Katrina attendance levels."

By: producer2 on 10/22/09 at 1:00

Couldn't get many of the others to open. Why would I be directed to the Chicago Times for an article regarding Orlando. Oh well, I am sure it was more of the same. Not good today (shocking!) but looking good tomorrow....