$300M Donelson development stalled by oversight dispute

Sandy Mazza | The Tennessean

Nashville city and state leaders are at an impasse with redevelopment officials over a first-of-its-kind development worth an estimated $300 million around the Music City Star train stop in Donelson.

The plan, known as a transit-oriented development, is seen as a template for alternative regional transit goals after a proposed transit tax referendum failed in May.

But Nashville and state elected officials who support it say a Metropolitan Development and Housing Agency vote needed to begin work was wrongfully tabled earlier this month.

The move came after MDHA Executive Director James Harbison opposed an amendment to the plan council members added in May. That addition would allow two Donelson residents to join the agency's design review committee so they can have a say in final design plans for the development.

"The design review committee that exists in Nashville has been in place for 30 years," Harbison told council members. "I've had one appeal on the 400 actions by that committee in four years. So I think it's working pretty well."

Donelson Station Donelson to create new town center near the Donelson Station regional transit line

State Rep. Darren Jernigan, D-Old Hickory, attended MDHA's July 10 meeting and was disappointed the item did not come up.

"I would hope it shows up on a future agenda," Jernigan said. "The amendment meets the spirit and intent of what we wanted to do. The design review committee would act no differently than a Metro board or commission."

Nashville council already started the process of approving the plan. But before it can take a final vote, council must get MDHA's blessing.

Right now, there are no plans for the MDHA board to hear the matter. An MDHA official said the agency continues to speak with Councilman Jeff Syracuse, the sponsor of city legislation creating the potential development.

"I fully expected it to be on the agenda" for the board's July 10 meeting, Syracuse said. "I look forward to this happening as soon as possible. This plan is true community building that goes to support some of the biggest challenges our city has – transit and affordable housing."

Jernigan submitted a letter to MDHA co-signed by Sen. Steven Dickerson, R-Nashville, advocating for the amendment.

The state lawmakers together worked to pass legislation last year that opened the door for transit-oriented developments for the first time.

The board of the Regional Transportation Authority of Middle Tennessee chose Philadelphia-based Pennrose Properties to build the core development of 300 apartments and shops next to the train station. Ten percent of those units would be preserved for low-income residents.

MDHA would administer $30 million in tax-increment loans for affordable housing and other public benefits included in the plans.

Public money would be used to enhance infrastructure, erect a new public library, improve the train, and add sidewalks and a walkable plaza.

At-large Metro Councilman Bob Mendes issued an open letter in June opposing the project, saying it will stress city resources and won't generate enough property tax revenue to repay the loan.

"I don’t think Metro can afford to take on new operating expenses with no revenue in return," Mendes said. "The area is currently relatively affordable. This just isn’t the right time for this district."