Bert Mathews, a principal and broker with NAI Nashville, helped establish a district council of the Urban Land Institute here in Nashville.
The council became official in January. So far, the council has established a financial base with corporate commitments locally and its young leaders group has been meeting with government officials and others involved in the development process to better understand that process.
One of the organization’s goals is to improve developments by sharing the successes and failures in the development. By improving development, the community as a whole benefits as a result.
Nashville had 105 ULI members before forming the council. Now membership is about 200.
Mathews sat downtown with staff writer Richard Lawson to discuss ULI and the cost of land downtown.
Why have a district council?
The No. 1 principle of ULI that they are working on this year is increasing its effectiveness locally. While they have all these classes you can go to, and that they have two annual meetings a year, being able to have try to have the same quality of programming in Nashville, Tennessee is what we are about. There are three steps you go through – viable, visible and valuable.
The organization’s name suggests it’s all about urban. What about the suburbs?
The mission of ULI is to “provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.” I’ve been to a couple of different meetings where they’ve been talking about suburban development, actually exurban development, agricultural communities, what’s the best practice there from a land development standpoint.
And 70 percent or 80 percent of development takes place in the suburbs. We’ve got to model that at ULI in order to be able to provide best practices so urban in the sense of city building and communities but land covering the full spectrum.
So is this about how to do better suburban development that makes it more urban or that creating density makes it more urban-like?
No, it’s about making sure you are using best practices in land development.
But what are best practices? You scrap it and build.
Some of it is going to be about making it more dense. It’s going to vary from site to site. So maybe it’s putting mixed uses together. Some of it may be preserving substantial amounts of open space. Some may be not building in environmentally sensitive areas. But it’s working in trying to make sure developers know and understand what all the issues are so that they can do what is best out there.
What are the primary issues the ULI is dealing with at the moment?
Locally, the issues we are beginning to explore from a young leaders group, they are exploring the development process itself. They are working through how that works. One of things that I hope we are going to be working on over the next year is the issue of regionalism. That is something ULI has been very helpful in studying kind of how that works and what the processes are.
One of the central issues that’s really been important for ULI nationally recently has been workforce housing. Ron Terwilliger (chairman of Trammell Crow Residential) gave ULI $5 million to set up the Terwilliger Center to try and figure out how to deliver good quality workforce housing. It’s a difficult, difficult issue for how you make a return to encourage people to do it.
Land costs help complicate that and along with construction prices push up total costs.
So yeah, where do you want it happen? What does the cost of the land need to be? What tools are out there from an economic development standpoint to make them work? One of the things (former Mayor Purcell) did that was great was to really require 20 percent affordable housing as a part of any residential (tax-increment financing) deal.
If the developers wouldn’t push up the price of the land, then you wouldn’t have to worry about it that much.
Developers aren’t necessarily the ones with the land.
You have the landowner, then the developer overpays for the property and that creates problems and you’re seeing it downtown.
In SoBro, you’re exactly right. It’s one of those interesting questions. What is the value of land in downtown today? It’s a very fluid decision. Land has two values. One of those values is the value in use. If you are getting ready to go build a 20-story condo tower and you are going to start work tomorrow, you’ve got everything in place, that land is worth X. If you were going to buy that same piece of property and speculate on it by owning it for five or 10 years and waiting for the value to come to you, that is a much lower value.
I think what you are seeing downtown with these widely divergent land values is some people are ready to buy, close and make something happen today. And there are other people who are out there who are saying, ‘I think I can buy it and put it to use in two years.’ Those are two very different values of a piece of property.