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: 615/862-6784February 27, 2017
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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