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METROPOLITAN COUNCIL Member of Council John Cooper Councilmember At-Large 3925 Woodlawn Drive Nashville, TN 37205 615 969-4444 Mr. Jim Harbison Metro Development & Housing Agency 701 South Sixth Street Nashville, Tennessee 37206 Dear Jim, This letter is to request a report to the Budget and Finance Committee of the Council on the proposed terms of MDHA’s sale of its Rolling Mill Hill site. Proceeds from the sale of this site were earmarked by the Council for the funding of Envision Cayce, an important city project. Please provide clarification and comment for the following aspects of the transaction. 1. As reported, MDHA has entered into an agreement to sell 2.7 acres fronting Hermitage Avenue for $9.4 million at a value of $80 per square foot. On request, the Davidson County Tax Assessors’ office has provided a list of five comparable property sales which indicate an average value of $140 per square foot for comparable property. The Assessors’ data implies a property value for the Rolling Mill Hill site of $16.5 million — or $7.1 million more that what MDHA is selling the site for. The apparent discount on the sales price requires explanation 2. MDHA has also offered a $7.9 million TIF payment to the buyer. Please outline the community benefits being provided by the recipient of the TIF money. TIF payments are funded by future tax collections to the City and their use should require an explanation of their benefits to the public, not just their benefits to the developer. 3. Itis our understanding that any basis for a discounted sales price and the TIF award should be legally set out in a Memorandum of Understanding -- which has not yet been written, However, it is also our understanding that this ‘still unwritten’ Memorandum was approved by both the Development Committee on February 2 and at MDHA’S full Board on February 14 when the sale was approved. Please explain. 4. Itis also our understanding that the sale of the Rolling Mill Hill site was entered into without an appraisal. Please describe the process where a valuable piece of City property can be sold without an appraisel and what role value had in MDHA making its award of the sale and TIF payment. One Public Square, Suite 204 Nashville, Tennessee 37219 Office: 615/862-6780 Fax: 615/862-6784 February 27, 2017 Page 2 5. The net price to the developer of $1.5 million for the 2.7 acres at Rolling Mill Hill seems out of line with what developers are paying in private transactions in downtown Nashville, as the developer is paying $9.4 million for the tract, but receiving $7.9 million back in cash. The TIF award might have been used to increase the sales price to the developer above the assessed value -- producing additional funds for Envision Cayce but has been used to lower the effective price to the developer at the cost of future tax collections to the city. What additional funds to Envision Cayce might Metro be expected to provide beyond the proceeds from this sale? 6. Recently, MDHA purchased the ‘ground ‘ights’ to .79 acres for a downtown parking garage at $185 per square foot or $6.4 million. But, MDHA agreed to sell this 2.7 acre downtown tract (with remarkable frontage and proximity to KWV) at $80 per square foot and then give a TIF award of $67.50 per square foot. Why do we pay so much more for what we buy than we get when we sell? What internal process does MDHA use to evaluate value in both purchase and sale agreements? Was there an appraisal for the purchase of the parking site on Fifth? If there wasn’t an appraisal, how was a fair price established? Thank you for your time and response to these questions. The Budget and Finance Committee meets next on Monday, March 5. This $15 million change in value to the City from a discounted sales price and future tax payments going to TIF and not the General Fund ~ is an appropriate inquiry for the Budget Committee and the City Council Sincerely, Chairman, Budget and Finance Council member At-Large

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