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A metals processing site with a complicated ownership structure and a California family bullish on Middle Tennessee are just two players in a riverfront development puzzle

Talk to anyone involved in Nashville city planning efforts about the city's future, and chances are they'll mention redeveloping the downtown Cumberland Riverfront. Former mayor Bill Purcell allocated $8 million in the 2007-2008 fiscal year budget for Metro to begin a $40 million, five-year project that will create 120 acres of parkland and about 20 public riverfront features along both sides of the river between the Woodland Street Bridge and the Korean War Veterans Memorial Bridge. A longer term, 15- to 20-year plan includes the bolder prospect of carving a channel along the interstate loop in the Cumberland's East bank to create an island encompassing LP Field.

 

It's a project that generates a great deal of excitement for the city, and with it comes that oft-discussed matter of the PSC Metals site-a metal recycling facility on the East bank of the Cumberland that's a coveted piece in the riverfront development puzzle.

 

"Many people agree that's not the highest and best use of that property, and as we build out the public and recreational features downtown [in phase one of the project], we'll be building right up to the metals site," says Chris Koster, the city's special project manager for the riverfront redevelopment project. "That transformation will increase opportunities available on that site."

 

And although Tower Investments-a California-based real estate investment and development company that's becoming an industry giant in Middle Tennessee-secured an option on about 25 acres of the approximate 50-acre site where PSC operates, don't count on a groundbreaking any time soon.

 

First, there's the obvious-PSC, an Ohio-based scrap metal processor with recycling facilities around the country, runs a successful operation on that property that relies on its proximity to the river, interstate and railroad. The company, which has entertained several proposals regarding other uses for the property through the years, has not indicated that it's moving or even willing to move. And if and when the company does decide to abandon its operation, there's the not-so-small task of cleaning up the site.

 

Perhaps even more problematic, though, is the fact that, due to the scrap yard's history, several parties own the land that PSC occupies. Before it was PSC, it was Steiner Liff Iron and Metal, an operation that the Liff family launched in the 1950s and sold to Philip Services Corp. in 1997. (Philips Services filed bankruptcy a couple years later and emerged in 2000 as PSC Metals.) Today, PSC owns half of the site on which it operates and leases the other half from three trusts controlled by descendants of the Steiner-Liffs. To make matters more complicated, the lease agreement extends through 2024.

 

"If you're trying to entice [PSC], you have to find a location with the same amenities and figure out a way where Phillips is able to exit the lease to its satisfaction and to the three trusts' satisfaction," says Tom White, a Nashville attorney with Tune, Entrekin and White who represents PSC. "So, if you offer Philips enough money where it will make sense for, you also have to offer enough where the other owners are going to be satisfied as well."

 

Tower made the 25-acre option agreement with Adam Liff, who says that the company has about three years to determine whether the property is appropriate for the development it would like to pursue.

 

"They needed to make certain that they could purchase the property they were looking at before spending the money to do the research," says Liff, adding that his family agreed to the option because they were impressed with the Marks, the family behind Tower, and that Nashville is lucky to have people with such vision, rolex resources and experience.

 

If Tower ultimately purchases the property, Liff says, the property is still subject to the lease, so PSC would then pay rent to Tower. And Tower would then have to negotiate with PSC. In the past, though, negotiations between landlord and tenant have proved challenging. In 2002, when TDOT paid $5.4 million for a sliver of the property as part of the Gateway Bridge project, the Liff family and PSC metals went to court to determine how to divide the money. Not that such complications bother the Marks family; for although senior vice president Alex Marks declined to comment on the option details, he did say: "The more complex, the better," referencing a California "mess" involving defaulted bonds and about 10 lawyers several years ago. "We like it that way."

 

Often described as a California ranching family because Alex Marks' grandfather and father were ranchers until the late 1980s, the Marks's are full-fledged developers these days. Their investment portfolio extends well beyond California into 17 states, and they're bullish on Tennessee and the region. They opened an office in the Music City in August, own a few commercial buildings downtown, are building three equestrian-themed residential projects in Williamson County and hold a majority stake in the $250 million Cumberland Yacht Harbor project at Mill Creek.

 

About 10 minutes from the heart of Nashville, the Cumberland Yacht Harbor includes condos, shops, restaurants and a marina. It's not difficult to imagine something similar on that PSC metals site some day.

 

"We only do projects that we feel make a difference and satisfy the highest and best use of the property," says Marks, adding that Tower does not embark on projects without taking into account what the city and the people would like to see on each piece of property. "Sometimes, it takes a long time to do that."

 

Most agree, however, that the value of developing that land will ultimately be (or already is) worth more than its use as a scrap metal site. And whether it takes two years or 10 years, a private development sure to pay dividends for Nashville is in the cards.