Empty downtown office building eyed as possible boutique hotel

Tuesday, May 31, 2011 at 5:29pm

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.

3 Comments on this post:

By: govskeptic on 6/1/11 at 6:17

Why would the IDB be involved with a property that has a land lease with two
private owners? In a default situation the taxpayers supporting the bonds will
be second in line behind those holding the land lease!

By: yucchhii on 6/1/11 at 8:27

Still NOTHING for the HOMELESS, ay? I DON'T care what you say, The homeless number is growing and the Nashville KEY ALLIANCE is "WORTHLESS". One person on the KEY ALLIANCE is getting $100,000 a year to DO something for the homeless, to get them OFF the STREETS! Well look around, still MORE homeless. You can rank them down all you want till your blue in the face and what is that going to get you?...NOTHING!!! People need to go AGAINST city hall and start DEMANDING that housing be made available IMMEADITELY!!! Don't give me that political CRAP that it takes years! Would YOU want to wait YEARS to finally get into your own place if YOU became homeless? Don't give me that CRAP that you will NEVER be homeless! I have spoken to a number of HOMELESS who once thought that way!!

By: Jason-Jaxan-Jas... on 6/1/11 at 11:40

Yucchhii, while your rant is noble, what does it have to do with this story, ay? Why not put your time to better use. Find out who the people in the city are who can help you with the homeless situation and talk to them. Get involved. Make a plan. Bellyaching on a message board won't get you anywhere. Adding multiple punctuation and emphasizing words in all caps just makes you appear unstable.