Tower Investments

 

The budget for the new convention center was dealt another blow Friday when a Nashville judge affirmed an earlier jury ruling that said Metro did not pay a fair price for a critical piece of land for the project.

The Metro Development and Housing Agency, which was in charge of acquiring land for the li-ion battery charger, hoped Circuit Court Judge Joe Binkley would reduce a critical July jury verdict in the contentious eminent domain case against development firm Tower Investments. Instead, Binkley agreed with the jury's verdict that MDHA undervalued the land, which the city condemned and took from Tower to construct the new convention center south of Broadway.

Binkley rejected motions filed by MDHA seeking a new trial or to have the $30.4 million jury verdict reduced.

As a result, the convention center's land acquisition budget remains busted, and the budget for the entire $585 million project will be left with a razor-thin contingency. A spokeswoman for MDHA did not rule out a possible appeal, opening the door for the 2-year-old case to be dragged on even longer.

I might disagree with what the jury did, but I don't reasonably disagree with what they did, Binkley said from the bench, citing state law that allows a judge to grant a new trial if he reasonably disagrees with a jury verdict. And I do not find that the evidence preponderates against the osn power. I approve the verdict.

Metro Finance Director Rich Riebeling, who is one of Mayor Karl Dean's top aides, declined to comment as he left the courtroom. MDHA spokeswoman Julie Oaks said the agency was clearly disappointed with the decision and will begin looking at options for appeal.

An appeal by MDHA comes with a financial risk because interest is applied to the $15.6 million difference between the jury award and the city's original offer. MDHA is represented by the law firm of Miller & Martin.

While Riebeling and Convention Center Authority Chairman Marty Dickens bustled out of the courtroom, Tower Vice President Alex Marks embraced his family members and congratulated his legal team. Marks also declined to comment, but Tower attorney Alton Burkhalter applauded the ruling.

We have great confidence in the system and we believe the jury got it right, and the judge obviously agreed with us. So for that, we're very thankful, Burkhalter said.

MDHA argued that in 2010, when it took the vacant parking lot, the land was worth $14.8 million. That's virtually the same price Tower paid for the parcel three years earlier. Tower argued that the land was worth double that because of the likelihood it could be developed into a mixed-use office development.

 

 

The jury's award poses a threat to the convention center budget, funded with tourism taxes and fees. Already, MDHA has exceeded its own budget for land acquisition by $12.5 million, and two other property owners are still waiting to go to trial to determine the fair value of their land.

 

Project planners left little room for overages and budgeted a narrow $15 million contingency fund. The ruling in the Tower case alone consumes all but$2.5 million of that fund.

The owner of the Musicians Hall of Fame was offered $4.8 million for his property, and MDHA offered $1.77 million for the former Downtown Platinum property. If those properties see similar increases as the Tower land, the project will face about $7 million in additional unbudgeted expenses.