Nashville can now move forward with the city’s plan to purchase Antioch’s derelict Hickory Hollow Mall and transform the property into a community hub and medical center.
Metro Council voted 28-3 with four abstentions Tuesday to approve agreements allowing the city to buy two portions of the site for a combined $44 million. The council also approved up to $46 million in general obligation bonds to cover the purchase and a $2 million contingency.
But support for the deal was far from unanimous.
Several council members who abstained or voted against the deal cited incomplete cost estimates for the project’s full build and the absence of a legally binding agreement with Vanderbilt University Medical Center, which has committed to rent a portion of the site under a lease that has yet to be negotiated.
Mayor John Cooper announced the project alongside Council member Joy Styles on March 23. Cooper has said he hopes with VUMC’s lease, the deal will be “essentially self-financing for the city,” but recently released documents show this may only cover the debt service for space VUMC leases.
Styles said the mall purchase would provide much-needed investment in southeast Nashville, bringing additional access to healthcare, jobs and food sources in addition to an Antioch Performing Arts Center. Metro’s ownership would also give the city and its residents authority over the property’s use.
MORE:Metro Nashville to buy derelict Hickory Hollow Mall, lease to Vanderbilt Medical Center
The mall was renamed the Global Mall in 2013, but the space languished for years after a series of private investments fizzled. Current tenants on the property include Nashville State Community College, the Nashville Predators’ Ford Ice Center, the Southeast Community Center and Nashville Public Library’s Southeast Branch.
At-large Council member Bob Mendes said he voted against the project because it was “not fully baked.”
“Councilman Cooper, when he was here, there’s not a snowball’s chance in hell that he would have voted for this, because it is loaded with unknown cost,” Mendes said Tuesday.
Cooper’s State of Metro address will be held at the Southeast Community Center on April 27.
“Mayor Cooper and a vast majority of the council have the vision to recognize the enormous benefits and significant upside this project will bring to one of the fastest growing parts of the city in Southeast Nashville,” Cooper’s Communications Director TJ Ducklo said Wednesday.
Tuesday’s approvals allow Metro to assume purchase-agreement options for two components of the mall site: the 650,000-square-foot mall and the 160,000-square-foot former Bridgestone building.
Under the first agreement with Public Square LLC, Metro can assume Public Square’s option to purchase the core portion of the mall for $24 million.
Under the second agreement, Metro will pay up to $150,000 to the Joe C. Davis Foundation for the option to purchase the Bridgestone building, in addition to $19.9 million for the property itself.
Several council members bristled at the deal’s expedited timeline and unanswered questions about the project’s true costs and risks.
Officials from Cooper’s administration pointed toward provisions in Public Square’s mall purchase agreement: that deal’s closing date can be extended twice, but it would cost $250,000 per extension, and the deal as written would expire after June 28. The Bridgestone building deal is valid through June 20.
Metro documents confirm the purchase price for both pieces of property will be around $44 million, but related costs are unclear.
VUMC has signed a non-binding letter of intent with the city indicating its desire to lease the mall’s core building and cover renovation costs.
Documents provided to council members indicate the Bridgestone building — which would not be leased to VUMC — could cost between $6 million and $13 million to “stabilize” and build out. Its annual operating costs could total around $7.6 million.
Though VUMC’s lease payments would cover debt service for its space, that may not extend to Metro’s former Bridgestone building, leaving the city responsible for the building’s debt service.
Metro is also responsible for site parking, which is estimated to cost $5 million. Cooper’s most recent capital spending plan included $5.025 million under “Global Mall master plan and implementation” for parking, in addition to $1 million for “infrastructure coordination” at the site.
This does not include cost estimates for additional surrounding infrastructure.
At-large Council member Zulfat Suara was initially against the deal but ultimately voted in favor because she sees borrowing money to obtain assets with lasting use and value as “good debt.” Though the deal’s specifics are unfinished, she said it came down to whether Metro trusts VUMC.
“If we don’t own this property … we would have to rent from whoever the owner is, or we may not even have the opportunity to use any part of it,” Suara said.
Reach reporter Cassandra Stephenson at ck**********@te********.com or at (731) 694-7261. Follow Cassandra on Twitter at @CStephenson731.
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