News Room
Purchase boosts family's holdings in Midstate area
By Chas Sisk - The Tennessean
October 15, 2006
It wasn't exactly love at first site, but it's fair to say that the big, wide parking lot behind the Gaylord Entertainment Center caught the eye of David Marks and his family of real estate investors not long after they arrived in Nashville.
"This property is only going to be appreciating as things develop around there," he said. "It's in the path of development, and it's a large piece of property. A large piece of real estate in the downtown is difficult to find."
With their acquisition of that 5.7-acre lot and another across the street, the 2.3-acre Chilton Industrial Machine and Tool Co., the Markses have more than doubled their investment in downtown Nashville, adding to a portfolio that already in cludes three buildings on Lower Broadway.
The investment is one of more than 100 that the Markses have made across the country and Canada through Tower Investments LLC, their family firm based in Woodland, Calif. They have amassed their portfolio without much fanfare, occasionally drawing praise from local officials without causing controversy.
But this deal is an unusual commitment for the company, run by five Marks siblings and their father, a cattle rancher who founded Tower to manage his holdings in the late 1980s. For the most part, the company has focused on offices, industrial buildings and residential subdivisions.
The firm's holdings include a 150-acre office and training facility in Rochester, N.Y., once owned by Eastman Kodak; 1,350 acres of residential land in southeastern Minnesota; and 12,000 acres of commercial land in northeastern Nevada.
It was that business that brought the Markses to Nashville in the first place. While looking at residential sites in Jamestown, Tenn., the family learned about Leiper's Fork, the upscale enclave in southwestern Williamson County.
They began buying land there three years ago, so far accumulating about 1,700 acres. The family has been subdividing that land into homesteads for horse enthusiasts.
Late last year, the Markses started buying property downtown: first the former Heilig-Meyers furniture store at 411 Broadway, then the Merchants restaurant building at 401 Broadway and finally the Big River Grille building at 111 Broadway. So far, their downtown investment has totaled nearly $9.4 million.
Small-city redevelopment
In some ways, the Markses' investment in downtown Nashville most closely resembles their investments in Sioux City, Iowa, and Little Rock, Ark. But even those investments were on a smaller scale than their commitment in Nashville.
In Sioux City, the company purchased a derelict hotel next to the city's convention center, gutting it and signing a deal with Clarion hotels. But the firm has not taken part in broader efforts to redesign the convention center.
In Little Rock, the Markses bought five downtown office buildings, including four on a single block. The Markses plan to turn that block into an interconnected development, but so far, they have started work on only one of those buildings.
Still, officials in both cities said they had received no bad reports about the Markses. Unlike some previous developers, they have followed through on promises to make their cities better.
"I think they're people of their word," said Sharon Priest, executive director of the Little Rock Downtown Partnership. "They're in it to make money, but they're also in it to help cities restore their downtowns."
The Markses' latest deal, to purchase the GEC parking lot and the Chilton site, would take those efforts further. Based on a price of $60 a square foot - roughly what sellers say the land sold for - it appears that the Markses have paid at least $20 million for the two properties. (David Marks declined to disclose the exact purchase price.)
Long-term commitment
Their commitment is also more than financial.
The Markses say they want to work with the city to develop a master plan for the area, one that would address many of the big questions in SoBro: How to extend Gateway Boulevard; How to bring in more business; How to design the Music City Center, a 15-acre convention hall proposed for the area, so that it doesn't become an obstacle to future development?
The Markses already are committing to build a hotel next to the convention center, a key part of that project. But they also have not ruled out getting involved in residential or retail development around the center. "There's a potential," Marks said.
As their investment in Nashville has grown, so has their presence.
Their roots remain in Northern California, where the family owns two ranches with more than 1,600 head of cattle.
But one of the Marks children, Alex, a former computer executive, has relocated to the Nashville area, while David, a former doctor, plans to become a frequent visitor, as manager of the family's investments here.
"We feel Nashville still has a great amount of potential," David Marks said.
"We're going to be long-term players."