Construction to start soon on Velocity

Thursday, October 25, 2007 at 1:36am

Construction will begin next week on The Velocity, a condominium unit targeting mid-income homebuyers, developers said at a ground-breaking ceremony Wednesday.

About 140 of the development’s 264 units have been sold since the project was announced in May.

Lee Schaefer, a vice president of development for Bristol Development Group, said he attributes the sales to the mid-level unit price range. Units cost between $120,000 and $300,000. None of the units sold are expected to be used as investment properties, Schaefer said.

With so many condominium units catering to the upscale market — a group of buyers affected significantly by the current mortgage climate — Schaefer says the time is right to market homes to Nashvillians of moderate income levels.

“We want that demographic in The Gulch,” Schaefer said. “MarketStreet was particularly intrigued by that concept.

Bristol, headquartered in Franklin, is developing the five-story facility, with Nashville-based investment firm MarketStreet Enterprises serving as equity partner. Marketstreet is a partnership of Steve Turner, his son Jay Turner, and Joe Barker.

The Velocity will be at 11th Avenue and Pine Street in The Gulch. Floor plans range from 530 to 1,250 square feet. A total of 21,000 square feet of retail space will be part of the development. Construction is expected to be complete in about 20 months.

The project is subject to tax increment financing (TIF), and in exchange, developers have allotted 53 units for Metropolitan Development and Housing Agency’s “moderate income” pricing.

Velocity is the second joint venture between Marketstreet and Bristol. The firms also partnered in development of ICON in The Gulch, which is currently under construction. Sales of ICON units were remarkably brisk, with all 417 units selling in less than two weeks in April 2006. Schaefer on Tuesday attributed that success to “a perfect storm” of economic conditions locally.

“It’s a pretty tough sales time,” he said.

Doster Construction Co. of Birmingham is lead builder for the project.

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By: goose1768 on 12/31/69 at 7:00

Let me see... $120,000 sounds affordable. Oh wait it's only 530 sq feet. But that's $225 / sq foot. That's just crazy, maybe I should move to Donelson and buy a house with more than double the square footage on at least a 1/2 acre lot for about $110 or less / sq foot. Oh wait, I already did.I love Nashville, and I am all for the downtown rejuvination, but I don't see how this kind of pricing can sustain itself here. We are pricing ourselves like Atlanta and Chicago where there is actually shopping and retail within walking distance (which isn't that supposed to be the point).

By: bradleau on 12/31/69 at 7:00

The lowest price I might be able to afford. Now those other fees for "condo" living. OUCH. I have 1450 SF and nearly one acre less than 5 miles from this site. Mine is paid in full. It is a better idea than some of the luxury units, but until the pay scale matches the cost of purchase....I will stay here.

By: xataran on 12/31/69 at 7:00

Amen!! Anyway, those $120,000 units are the MDHA units, for which a person must earn < $26,500 a year, gross!!! (Disclaimer: I'm not sure what the actual figure is, I only know that I don't qualify at 26.5k)Personal Finance 101:$120,000 @ 7% over 30 years = $798.36 per month EXCLUSIVE of taxes, insurance, and Community Area Maintenance (CAM), which is an integral part of any condo. After you add in everything else, it is probably over $900 a month. I can't figure out how anyone who qualifies for MDHA housing would qualify for a loan on income grounds, unless they had the 20% downpayment ($24,000) in cash/savings. But even then, $26,500 gross = $1842/month after taxes = 43% of your paycheck goes to housing related expenses, assuming a 96k loan. This is what one of my favorite authors refers to as "A Bad Idea." There are a couple of ways to do this, other than to lie about your income. If one member of an unmarried couple were to report their income and manage, somehow, to qualify for a loan, then the resulting payment would actually be affordable to the two of them. Otherwise, a person lucky enough to have wealthy parents could qualify on their own income and get help with the payments from mom and dad. And after all, rich peoples kids are the ones we want to help with this idea, right?

By: JeffF on 12/31/69 at 7:00

We are moving toward what EVERY other city has experienced. 20- and 30-somethings buying into a red hot downtown condo market followed by a miserable failure of that market. The play book is very transparent. Salespeople sit in an open sales office with young adults encouraging them to "buy" multiple units with $1000+ check for each. "They are great 'investments', look how fast they are going." Other salespeople are yelling out that "unit ___ has been sold." Eventually the building is completed and all these "owners" now have to pony up and purchase their completed units or forfeit their deposits. Meanwhile the young person is trying to "score" by reselling the unit they never paid for to begin with. Bankruptcies always follow. Now with the mortgage crisis it becomes even more difficult to find people willing the pay outrageous amounts for an unlivable amount of floor space. The very fact that these units (and most of the units at the other buildings) are inexplicably undersized for any sort of life should cause you to at least examine whether these are investments or real "homes".Condos all over downtown will either be sitting vacant and unsold in a couple of years or they will be turned to rentals. We are experiencing the normal boom and bust of downtown condo snake oil salesmen that other cities have experienced. Downtown living is a fallacy in most every American city.

By: JeffF on 12/31/69 at 7:00

I forgot to mention that developers of these buildings ALWAYS file for bankruptcy in order to walk away from construction debt. In every city where this scam has been pulled the banks are the ones who end up trying to sell the unsold units (after the deposits was taken by the original developer). Then a pension plan (like a state teachers plan) will buy the building at a substantial discount and start renting the units for monthly cash flow. These buildings have to become worthless before anyone can make money on them.

By: producer2 on 12/31/69 at 7:00

JeffF,I am 49 and live downtown with my wife very comfortably in a 800 square ft. unit. I am really intrigued by your EVERY city and ALWAYS files for bankruptcy statements. Do you do ANY research or are you ALWAYS this clarvoyant?