Mayor Briley is banking on land sales, parking overhaul to make up $38M in budget

Navigating a budget shortfall in a hot real estate market, Nashville Mayor David Briley's administration is banking on generating $38 million in new revenue by selling three city properties and outsourcing Metro's on-street parking services.

Briley last week proposed a "status quo" $2.23 billion operating budget for the 2018-19 fiscal year that would be just a $22 million increase over the current year, meaning most departments would stay budget-neutral and the school system would get just a $5 million bump.

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But even these modest enhancements are contingent on the property sales and a major overhaul of the city's on-street parking operations. Each transaction is assumed in budget estimations, even though they lack Metro Council approval.

Surplus properties wold go to 'highest bidder'

Metro Finance Director Talia Lomax-O'dneal identified the three properties in a memo to the Metro Council on Monday. The properties each involve abandoned Metro facilities in rapidly developing areas and are considered surplus. They are:

The old Green Hills fire station at 2025 Richard Jones Road.

Property at 3800 Charlotte Avenue that has an old Metro Public Works building.

The old Murrell School building at 1450 14th Ave S. in Edgehill. The school was most recently used as a special-needs facility.

"The proposed budget is based on the assumption that the three properties will be sold at market value to the highest bidder through a competitive process, after any appropriate zoning changes," Lomax-O'dneal wrote in the memo.

The fire station is expected to be sold for $3 million and the Charlotte Avenue property for $7 million, according to the finance department. Briley's budget proposal to inject $10 million into the Barnes Fund for Affordable Housing is contingent on both sales.

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The city estimates the Murrell School would fetch $13 million for the school district's operating fund. The Metro school board must sign off for the sale to go through.

Michelle Michaud, Metro Nashville Public Schools spokeswoman, said the district was unaware of the recommendation to sell the Murrell property in advance. She said the board would discuss the matter further.

The mayor's budget has also accounted for expected revenue of $15 million from an on-street parking initiative. Metro would lease operations of its roughly 1,950 curb spaces and parking meters to a company that would collect at least a share of the parking revenue.

Council member questions 'fire sale' of properties

Briley appeared before the Metro Council on Monday to kick off the council's budget hearings with department heads. He made clear that budget constraints have prevented addressing more city needs that he would have liked.

"That is all we can do this year without raising taxes," he said.

The Metro Fire Department abandoned the old Green Hills fire station in 2015 to move into a new Station 20 facility at 1626 Harding Place.

Nashville Director of Schools Shawn Joseph last fall led the relocation of the Murrell School, used for special-needs students, to the Glenn Elementary School building. Under the consolidation, Glenn students moved to nearby Caldwell Elementary School.

"As has been done in other years, the proposed operating budget incorporates the sale of surplus properties," mayor's office Press Secretary Judith Byrd said in a statement. "The parking proposal follows stakeholder input and would upgrade and modernize the system to make it more efficient, customer friendly and sustainable."

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Councilwoman Kathleen Murphy, who represents the neighborhood around the Charlotte Avenue property, said she's had preliminary meetings with constituents and planning officials about the sale of the land and possible future uses.

"I think at the end of the day, there could be a variety of uses there, but we're still in the early stages of community visiting," Murphy said. "It's definitely an underused property right now, and so I'd like to see it something that benefits the community, benefits Metro and continues to the upward growth of the Charlotte corridor."

But At-large Councilman John Cooper, who has criticized past deals under former Mayor Megan Barry where the city unloaded public property, suggested the proposals raise questions.

"It remains to be seen if this is a good business decision for Metro and not a 'fire sale,'" Cooper said. "The new fiscal year starts July 1, and this proposal is only in a draft (request for qualifications) stage. You have to worry that we will be rushed into a poor long-term business decision because of the current financial emergency."

Cooper also questioned the parking proposal, noting the city could lose a revenue stream in exchange for a payment from the vendor.

"You have to be concerned when we are down to having to pre-sell our parking meter revenue," he said.

Mayoral candidate Carol Swain, a conservative former Vanderbilt University professor running against Briley in the May 24 special election, slammed the proposed property sales as a sign of fiscal mismanagement.

"The Dean, Barry and now Briley administrations have mismanaged the city’s funds in times of plenty," the Swain campaign tweeted. "Our reserve fund is almost empty, we have a ballooning balance sheet, and next year’s budget is dependent on property sales that don’t have council approval."

The campaign finished the Tweet with the hashtag "#budgetonaprayer."

Mayor's office: Parking overhaul would modernize system

Metro hired an outside consulting firm, Faegre Baker Daniels Consulting, to study a public-private partnership for on-street parking in Nashville last fall.

The study projects two-year revenue of between $25 million and $30 million in upfront payment for Nashville based on a similar program in Indianapolis.

►More: Indianapolis: Parking meter revenues falling far short of expectations

In a separate memo Monday to the council, Lomax-O'dneal called the current parking system "underperforming because of outdated technology, operational inefficiencies, lack of real-time data and other factors."

"Metro's parking management process is highly manual in some areas, for example, with citations being process by hand," she wrote. "In addition, the current system is missing many of the leading-edge customer service features found in other cities such as text alerts and mobile payment.

"Updating and modernizing the system will improve the overall parking experience in Nashville, help reduce Metro's environmental footprint and achieve our sustainability goal, improve access to retailers and other local businesses, and ensure that spaces set aside for those with disabilities are available to them."

The study recommended that Nashville pursue a concession agreement of 30 years — with an option to terminate a deal after each five years — where Metro would retain full ownership of the system and control over policy and pricing, with the option of receiving an upfront cash payment.

The mayor's office could not immediately provide how much the city currently collects in parking revenue.

Reach Joey Garrison at 615-259-8236, jgarrison@tennessean.com and on Twitter @joeygarrison.