An empty downtown office building anchoring a prominent site and in which the Metro Industrial Development Board has a lease-hold interest is for sale, with the board hopeful a prospective buyer who wants to convert the structure to a small-scale hotel can navigate some challenges to close the deal.
The nine-member IDB met Tuesday to discuss the future of the property, a modernist 12-story mid-rise bathed in travertine (a light limestone), opened in 1973 and located at the southwest corner of the Union Street and Fourth Avenue intersection.
Nick Bailey, IDB chair, said the sale of the 70,000-square-foot building faces two key challenges: 1. it lacks on-site parking; and 2. the property involves a land lease, with two entities — the Lytle Brown Family Trust and JP-Nashville, LLC. The latter is involved in a lawsuit with Regions Bank.
“It’s highly unusual that we would find ourselves in possession of a building like this,” said Bailey, noting the Industrial Development Board’s involvement with 401 Union Building is the result of a bond issue dating from the 1970s.
Bailey said within the past approximately 18 months, the IDB approached Metro government officials to gauge their interest in the building. Metro passed, as its attention was focused on the Music City Center convention facility.
Now would-be buyer Philip Welker of BNA Associates has stepped forward to consider a purchase. Welker could not be reached for comment.
“We’re anxious to get this building back on the property tax roll and have a positive economic impact on the city,” Bailey said.
Bob Tuke, the Industrial Development Board’s attorney, said Regions Bank is the “successor in interest” to Union Planters Bank (which previously had operated from the building). Regions merged with UP in 2004.
Stephen A. Lund, an attorney with Nashville-based Tune Entrekin and White PC, is representing JP-Nashville. He could not be reached for comment.
“The building is in pretty good shape,” Tuke said. “There are no structural issues.”
The IDB is negotiating with Regions over the money it has spent maintaining the building the past two years, plus a $360,000 payment specified in the lease to be paid to the board at the conclusion of the lease, Tuke said. It has deferred filing a lawsuit against Regions while the financial company resolves its matter with JP-Nashville.