News Room
California ranchers stake claim south of Broadway
By Chas Sisk - The Tennessean
October 15, 2006
A California ranching family with property interests in 13 states and Canada is buying into plans to build a new convention center in downtown Nashville.
The Marks family, which owns Woodland, Calif.-based Tower Investments LLC, has signed contracts to buy eight acres south of Broadway, including part of the site selected by a study committee as the best location for a new convention center and hotel.
"We're supporting the convention center and that plan," said David Marks, a senior vice president at the family firm. "We like the opportunity."
The deals appear to establish a price of more than $60 a square foot for land in the neighborhood known as SoBro - double the asking prices a decade ago.
The transactions also introduce a new party to the potential convention center project, a family who says it wants to play a role in shaping the center's future.
The Markses already own three Lower Broadway buildings and 1,700 acres in Leiper's Fork, which they acquired three years ago and are dividing into homesteads for horse enthusiasts.
Marty Dickens, chairman of the Music City Center Coalition, which recommended the convention center site to Metro government in February and is now pushing for its construction, said the Marks family's involvement is bound to help the convention center efforts.
"I think it's great that they will be at the table," he said. "They are really knowledgeable and experienced at what they do."
The Markses are buying two sites. The bigger of the two and the one that's earmarked for the convention center is a blockwide parking lot south of Gaylord Entertainment Center. The other 2.4-acre parcel is just south of the Country Music Hall of Fame and Museum, and has been suggested as a site for a convention center hotel. It now has a machine shop on it and has been owned by the Chilton family.
The sellers include two partnerships, both associated with Mark Bloom, a bond trader who has been investing in downtown real estate for more than a decade.
Bloom said the price on the parking-lot site was more than the $60 per square foot that he had earlier said the land was worth, but he would not be more specific. Marks declined to reveal the value of the purchase.
The price of land brings into question how much the city would eventually have to pay if it were to buy it for the convention center. At $60 per square foot, the 5.7-acre parking lot would be valued at $15 million.
Yet in February, the Music City Center Coalition, then known as the Music City Center Committee, estimated that it would cost $20 million to $25 million to acquire 15 acres of land for the proposed convention center - which equates to about $30 to $40 per square foot.
Dickens said their purchase does not change the coalition's basic assumption about the project or its costs.
"It could very well be that the land has a higher price on it, but you should remember that there's a fairly significant contingency number," he said. The committee's estimates call for a contingency fund of $54 million to cover cost overruns.
The Marks family itself is betting that the proposed 1.2 million-square-foot Music City Center will jump-start development throughout SoBro. The Markses want to work with the city on a master plan for the convention center, and say they would be interested in pursuing ideas for the addition of retail and residential development to the convention center's plan to help it reach "full potential and economic feasibility."
It plans to work with the city to facilitate the extension of Gateway Boulevard, the landscaped corridor that comes across Gateway Bridge and ends at Fourth Avenue South. The city has envisioned that road creating another major artery in downtown and linking the downtown more directly with Music Row.
Right now, Gateway Boulevard ends at the Chilton property that the Marks family is buying. The family said that it would be interested in "facilitating the extension of Gateway Boulevard" and "temporarily providing public parking once structures are removed and any necessary environmental work has occurred."
The family also plans to work with a major hotel operator to develop a convention center hotel, probably on the Chilton parcel.
The Chilton property technically is still owned by Robert Chilton III. But earlier this year, Chilton agreed to sell the land to an investment group led by Corner Realty, a partnership that includes Bloom. That group had intended to build condos on the site, but scrapped those plans when the convention center committee earmarked it for a hotel.
"That's not what I do," said Ray Hensler, Corner Realty's president. "So, it made sense to let that land go into the hands of somebody that is a little more inclined to let that play out."
For Bloom, the sale is a profitable end to an investment.
"The days when 10, 11 years ago, a local family could buy some dirt for $10 or $15 a square foot and hold it for future development are over," Bloom said.
Bloom and his partners bought the 5.7-acre parcel in 1996, paying slightly more than $4 million. The group purchased that land from the Metro Development and Housing Agency, buying the land at a price per square foot that was 36 percent less than land on the same block that had been sold to the Metro Transit Authority just one month before.