MDHA launches land acquisition efforts for convention center

Monday, August 31, 2009 at 12:14am

The Metro Development and Housing Agency will slowly relinquish control of the proposed convention center in the coming months, but the department is still in charge of acquiring land in SoBro for the $635 million project.

Already one round of formal offers have been sent to some property owners, with more to get theirs in the coming days.

“It’s too preliminary to know how the negotiations are going to go,” said MDHA Director of Development Joe Cain when asked how he anticipated the land acquisition process to go.

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.

The cost of land for the proposed new convention center project was estimated to be $55 million in April of this year, but the Metro Development and Housing Agency borrowed $62 million to acquire the necessary SoBro property.

Metro officials working to make Music City Center a reality said last week the project was still on schedule and under budget.

A short estimate history:

— Original 2006 estimate for land acquisition from Music City Committee: $20-25 million

— April 2009 estimate from Metro officials and project leaders: $55 million

— Council resolution allocating funds for land acquisition: $75 million

— Actual loan agreement entered into by MDHA: $62 million

Cain cautioned against reading too much into the fact the loan amount was more than initial estimates. Some of the funds will be used to clear existing buildings and for other predevelopment activities, he said.

However, the fact remains that over the span of three years the estimated cost for SoBro property acquisition has nearly tripled.

In 2006, a committee comprised of Nashville power players turned in a report to then-Mayor Bill Purcell called “The Music City Center For Nashville’s Future.”

On page 32 of the report, the committee estimated, without substantiation, that land acquisition would cost Metro “an additional $20-25 million….” The initial estimate was dramatically lower than reality, despite the fact that Metro has generally kept to the same development timeline offered by the committee three years ago.

In April when Mayor Karl Dean and other Metro officials made a presentation to Metro Council, the cost for land acquisition was quoted as $55 million.

So far, no offers have been accepted, although MDHA had already purchased one parcel in the proposed footprint.

Earlier this month, the MDHA board approved a loan agreement for land acquisition in the amount of $62 million. When Council approved the resolution authorizing land acquisition in July, the total was actually $75 million. That means MDHA could actually borrow more for land acquisition and related activities if necessary.

Soon, Dean will appoint nine citizens to the newly formed Convention Center Authority that will oversee development of the project — which needs final approval from Metro Council. The board members will have to be confirmed by a Council vote.

District 23 Councilwoman Emily Evans said she was concerned that Metro might be tipping its hand by making public how much it was willing to spend for the land. Evans said it would have been preferable to have Council approve a lump sum for financing for the entire project, instead of approving a specific amount for land acquisition first and then considering issuing bonds later on.

“It’s really hard to keep the cost of land down when you’ve broadcast to all property owners in the SoBro area what you’re willing to spend,” Evans said.

Cain pointed out that a legal condemnation process exists, which offers protections for both Metro and for property owners.

Metro Finance Director Rich Riebeling made clear last week that, despite concerns raised by MDHA over-spending on communications for the project, Music City Center was still on budget.

Recently, MDHA amended a contract with McNeely, Pigott & Fox for public relations on Music City Center. The original contract was for $75,000, but Metro had spent $458,000 as of earlier this month.

McNeely, Pigott & Fox stepped off the project and Dean has called for an independent audit of the firm’s invoices. All predevelopment spending for the proposed project will now go through the Finance Department as well.

To date, Metro has spent about $16 million on predevelopment activities.

All of the funds for land acquisition come from tourism-related taxes and fees approved by Metro Council in 2008.

14 Comments on this post:

By: idgaf on 8/31/09 at 1:50

They are buying land for something that hasn't been approved (or legally challanged) WHY?

By: shinestx on 8/31/09 at 6:02

That's the most obvious question, id.

More probing questions include:
Why have the property acquisition estimates more than doubled in three years -- a time during which property values declined by 10-15%? What were these estimates based on? How trustworthy were the appraisers (Heaven forbid that they didn't use independent appraisers. Did they?) ?

Will Mr. Riebeling provide the public with an itemized budget? Has he?

Why did Metro sell property just five years ago, only to have to turn around and buy it back now? Who was responsible for that "boneheaded" move? Was that person removed from his/her job as a result of that multi-million dollar blunder? If it was one of our past "esteemed" mayors, then why aren't bobble-heads in the local media making that known to the public?

Will McNeeley, Piggot & Fox be banned from any future work on this project, in any capacity?

Just a few more questions to get the ball rolling.

By: producer2 on 8/31/09 at 6:33

"Why did Metro sell property just five years ago, only to have to turn around and buy it back now? Who was responsible for that "boneheaded" move?"

That would be the Purcell administration. The media figures you can count...

By: JohnBirch on 8/31/09 at 7:08

Once again Producer you do not have your facts right. The property was sold when Bredesen was Mayor and Gerry Nicely was head of MDHA. Bill Purcell was not elected until 1999 and by then the property was in the hands of Arena Properties. See entry below from

Parcel ID 09310047300
Date Acquired 12/10/1996
Mailing Address 111 4TH AV S
Mailing City NASHVILLE
Mailing State TN
Mailing Zip 37201
Mailing Country
Document DB-00010292 0000157
Sale Price $4,040,000

Parcel ID 09310047300
Owner M. D. H. A.
Date Acquired 3/29/1995
Mailing Address 701 S 6TH ST
Mailing City NASHVILLE
Mailing State TN
Mailing Zip 37206
Mailing Country
Document DB-00009630 0000922
Sale Price $0

Now, please admit you were wrong. It is the first step to recovery.

By: producer2 on 9/1/09 at 5:02

I was simply replying to the person who stated that the properties were sold 5 years ago. That would be Purcell if his info is correct. I could care less who sold them and when.....

By: JohnBirch on 9/1/09 at 6:27

Oh. Sorry. I thought you were just repeating the mantra of the brainwashed CVB crowd; "Purcell bad; Dean ('cause he does what we want) good.

By: producer2 on 9/1/09 at 8:21

nope but the Purcell bad, Dean good thing is fine by me without any brainwashing. I think it was called winning the election.....

By: Dragon on 9/1/09 at 8:51

How can the council spend $80 million on something that hasn't been approved? Looks like the Metro council is to be ignored.

By: pandabear on 9/1/09 at 10:46

It's not $635 million dollars, it's 2 Billion dollars.

It looks like this: $2,000,000,000.00

The convention center will be at least 2 times the estimate,
and then there's the "hotel", estimated at $300,000,000, which
will also be double that.

Let's see...that's about $4,000.00 per person in Nashville.
It'll end up being paid for by raising property taxes, but don't
worry 'cause they'll come up with another reason for raising them.

...the important thing here is that producer gets his 30 pieces of silver...right ?!?

By: MusicCity615 on 9/1/09 at 10:59


HAHA. Seriously. NO ONE is going to believe that bs

By: pandabear on 9/1/09 at 11:07

Everyone who pays taxes and who isn't dead believes it,
and thanks for showing us who else is on the payroll.

By: Magnum on 9/1/09 at 11:19

Yeah, if I were a betting man, I would have to say that I expect they'll get closer to $2B than $1B. I would say doubling their budget would be a good starting guess. Also, even if they come in say only 50% higher than budget, they've probably just played with the numbers..."well you can't include the land acquisition or changes to NES into the project costs as these were not interpreted in the original budget". I can see it now!

By: producer2 on 9/1/09 at 11:59


All people against new center gooood

All people for it ........baaaad

I wish I had your calculator dude, I would be making some serious coin.... (or 30 pieces of silver)

By: pandabear on 9/1/09 at 12:56

Now you got it.

The calculator is called a brain.
It's a gift from God that some use and some don't.

Your choice.