In this edition of the NAI Nashville Market Report podcast, I spoke with Tom Chevins the Senior Vice President for Regus Group Americas about their unique product offering, and the new location that just opened in Cool Springs.

Please be sure to listen to the entire interview because Tom has an exclusive special offer to listeners of this podcast — FREE OFFICE SPACE!  Find out how to take advantage of this offer in the interview.  This product is great for emerging businesses, and is sure worth giving it a try.

If you’re reading this through email or an RSS reader, please be sure to stop by our web site to get more information on these issues and many others affecting our marketplace in Nashville, Tennessee.  Or subscribe to these podcasts in iTunes to stay up to date

Please feel free to send us your feedback about the podcast, or inquire further about the special offer by contacting us any time by calling (615) 850-2700, or emailing me directly at podcast@nainashville.com

In this edition of the NAI Nashville Market Report podcast, I spoke with Timothy Downey the President and CEO of the Southern Land Company about their new mixed-use development in the Cool Springs area called McEwen.

If you’re reading this through email or an RSS reader, please be sure to stop by our web site to get more information on these issues and many others affecting our marketplace in Nashville, Tennessee.

Please feel free to send us your feedback about the podcast, or inquire further about this development by contacting us any time by calling (615) 850-2700, or emailing me directly at podcast@nainashville.com

In this edition of the NAI Nashville Market Report podcast, I spoke with Jim Garrett the Senior VP of Network Operations and Tom Garland the VP of Client Development with NAI Global about how our industry has become a global marketplace and the impact it has on us locally.

If you’re reading this through email or an RSS reader, please be sure to stop by our web site to get more information on these issues and many others affecting our marketplace in Nashville, Tennessee.

Please feel free to send us your feedback about the podcast, or inquire further about this development by contacting us any time by calling (615) 850-2700, or emailing me directly at podcast@nainashville.com

TG: Is Signature Tower going to go? Yes. In fact, it is going to go. The excavation for this project takes five months and we’re looking to start that work this calendar year.

(Music Up)

MK: This is the NAI Nashville report for Saturday, November the 10th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast where we feature commercial real estate trends and happenings in the Nashville, Tennessee area and beyond.

You just heard my guest on today’s podcast, Tony Giarratana. Tony has completely changed the face of Nashville with his developments from the Encore condos to the Viridian, to the upcoming Signature Tower. In today’s podcast, we talk about his developments, his career path and what’s looking forward for him.

It’s a very exciting discussion. Hopefully, you’ll have time to sit through the entire interview. If you haven’t already, please go to our website and subscribe to this podcast on iTunes by clicking on the iTunes button. There, you can also listen to past episodes of this podcast where we’ve interviewed other professionals in the commercial real estate and development industries.

So, let’s jump into our interview with Tony Giarratana.

(Music Out)

TG: My name is Tony Giarratana and I attended school at the University of South Florida in Tampa. Having grown up in Clearwater, the University of South Florida was a short drive away. I got a degree in Finance there.

While I was in my senior year, I had a chilling thought that I’d be a banker and decided that I would take matters into my own hands, looked around and saw that the real estate guys were having a great time developing in Tampa, Clearwater and along the beachfront, the bay. I said, “That’s what I want to do.” So I got into the real estate business while I was still at the University of South Florida. I tried desperately to sell homes for nearly six months unsuccessfully and I had my break when I listed and sold an office building. From that point forward, office buildings were my business.

That took me to Denver, Colorado in 1981 with a firm then known as Urban Investment and Development Company – it was the fourth largest developer at the time and handled the leasing and marketing of a 2.8 million square foot office complex in the heart of Downtown Denver. It’s in Denver that I fell in love with the city.

Growing up in Clearwater, I was much more familiar with the beachfront than I was urban areas, but living six months initially at the Fairmont Hotel in Downtown Denver and then, later living in a high-rise condominium in Larimer Square, a few short walks from my office, I just fell in love with the Downtown area.

I continued with office leasing, which brought me to New Orleans, Louisiana, where I spent a year. Following that assignment, I was brought here to Nashville, Tennessee by Aladdin Resources, which was the developer/owner of an 850-acre mix-used business park called MetroCenter.

After a couple of years with them, I started my own company, Giarratana, Inc. and I’ve been without a real job ever since.

MK: So, after being in all those different places from Florida to Denver, circling in almost it seems like, why did you settle down here in Nashville?

TG: Well, it’s an interesting question. In the mid to late 80’s, I had received a fabulous offer to take over the leasing and marketing of Koll Company’s Southern California properties. I would have taken that assignment and moved to Southern California – Orange County, but two things happened.

Number one, my then girlfriend who was from Alabama, told me that she would not move with me to California and Nashville announced that it was going to build a new airport.

Growing up in Florida, I saw what the impact of a new airport had on the Tampa Bay area when I was growing up and I looked at Nashville, Tennessee as an area that had everything going for it – all the highway access, the river, tremendous quality of life, major corporate presence, particularly in the healthcare field. A very intelligent populous with 17 colleges and universities within the geographic area of Nashville. Now, with the introduction of an airport, which I felt would really stimulate the economy, I decided this would be a great place to set down roots and pursue my dream of having my own development company.

MK: When you fell in love with Denver – Downtown and the urban environment – and brought that love here in Nashville and saw the opportunity, what is it on our national market you see as the trends towards to this urban redevelopment, coming back to downtown areas and buildings? Moving people back into the city, sort of the ebb and flow of the marketplace going out into the suburbs and back in. What is it that’s driving them back in right now?

TG: I love listening to you. Just to talk about it is very exciting for me. There are so many dynamics at work. There’s no one thing.

First, Downtown Denver, Colorado was so exciting because it has so many spectacular buildings. While I was there during the early 80’s, there were three towers over 50 stories tall, built simultaneously. Now, the oil and gas market collapsed soon there after, so it was not a very happy time to be in the office business in Denver, Colorado, but it was just an exciting place to be. You cannot underestimate the power and excitement that a skyscraper holds for a community.

So, the dynamic of the tall building is very much at work here. You think of Chicago, you immediately think of John Hancock or Sears. You think of New York, many, many other buildings, but the first words out of your mouth would be Chrysler and Empire State Building. Then, you’d go to Rockefeller, Citicorp and all those other great buildings. So, having a city that has great architecture is very, very important.

Downtown Nashville…it’s at risk of losing this honor, but has had the highest concentration of office space in the entire region right here in this small eight block-by-eight block area called Downtown Nashville, Tennessee.

MK: You’re talking about density?

TG: Yes, density of office concentration. It has over 60% of the cultural venues in the Davidson County area, with Tennessee Performing Arts Center and the new Schermerhorn Symphony Hall, the First Visual Arts Center – all of the different opera and ballet. All the other cultural venues – the Ryman Auditorium and the live music that occurs at Sommet. This is very much a magnet for the arts and culture. The Tennessee Art League has offices right here on Broadway and Downtown Nashville.

It has the Riverfront, which historically has been ignored for 100+ years, but only last year, then Mayor Purcell decided to make a huge investment, a $40 million investment that would be funded over a five-year period of time. He seeded that investment with $8 million with the hopes that $8 million a year will be invested in this reclamation of the Riverfront verse what has occurred where the city has turned its back to the river and now, embraced the river. It’s very, very exciting. I personally am not active in that, but it doesn’t matter that I’m not involved directly in it. I can get very excited about it. I think what’s good for Downtown Nashville is good for me and what’s good for me is good for Downtown Nashville. So, all of those dynamics are at work.

Additionally and speaking specifically about Downtown Nashville, $1.325 billion of public and private investment has been made in Downtown Nashville just since the year 2000. That’s a phenomenal investment, but add to that $1.8 billion worth of investment that’s currently on the drawing boards. As you know, if I had my materials with me, I could show you all those projects and you’d immediately say, “Hey, I think the Convention Center’s going to cost a little bit more than the $455 million.”

Putting that aside, just assuming the $1.8 billion is correct. That’s $3.1 billion invested in a small land area that already had a lot going for it. That’s a phenomenal amount of investment and will have a phenomenal impact on the attractiveness of Downtown as a place to live, work, play and invest.

All this sets the stage now for residential development. We started back in 1993 with the notion of building residential in Downtown Nashville. The first thing we had to do was to amend the zoning code, which since 1963 had prohibited residential in the CC zone district and is the historic Downtown. We petitioned the Metro Council to change that zone code. They were quite frankly, surprised to learn that I was there asking them to do something that they didn’t even know had been a prohibition. They said, “Why can’t you build residential in Downtown Nashville?” Nobody had any perspective whatsoever on this, so it was an easy approval.

We built the Cumberland. It opened in 1998 with not a single resident. We were able to do no pre-leasing. It was very, very difficult to lease. By the time I got that building leased, I swore I’d never do another residential building in Downtown Nashville, but an interesting phenomenon happened as these initial leases, as I said no sooner had I leased it up, one-year leases were beginning to expire and these people were leaving the building. I’d go to them and say, “My goodness. Why are you leaving the building? Have I done something inappropriate? Do you not like the building? Do you not like the city?” Eighty plus percent of them told me that they loved the Downtown experience, loved the building, but they wanted to build equity in something that they could own, to take advantage of the historically low interest rates, the mortgage interest deduction. They wanted to own something and would tell me, “Tony, why don’t you build something that we can own?”

Frankly, not knowing what that would be I did the only natural thing, which is to ask, “What would you like me to build you?” What they designed was the Viridian, so we very boldly pursued the development of this 31-story $80 million high-rise residential condominium tower in Downtown Nashville with absolutely nothing to point to in Downtown Nashville to suggest this would be successful, except for the fact that our consumers said, “If you build this, we will buy it.”

It was just a natural – by all measures, it’s an out-of-the-park homerun. It’s a complete success from every possible measurement you can imagine. Economic of course, societal, the impact it’s had on stimulating the rebirth of residential in Downtown Nashville, the first urban grocery since 1967…that grocery would not work…it’s working beautifully at the base of Viridian.

The building has won the Urban Land Institute Award from the Atlanta Regional Council and most recently, the national award by Multi-Family Executives as Project of the Year in the United States – Multi-Family Project of the Year right here in Nashville, Tennessee.

So, we started introducing residential. We were very pioneering in the venture. Even our Encore project is very pioneering in that it’s the first high-rise residential in SoBro. But, all the dynamics were at work here. The final piece of the puzzle was the Boomer population. Only recently has Nashville media picked up on this.

There’s a young lady named Linda Bryant that is currently doing a story on this and she called me to ask me questions I said, “Linda, bless you. I’m so excited that Nashville finally gets it.”

By 2009, the Boomers will be the most important demographic anywhere in the United States in terms of urban housing. The Boomers, when they came on the scene in 1946, dominated the US economy. Now, as the Boomers turn 60 years old, the Boomers will again dominate the marketplace.

Downtown Nashville – all the residential, all of our product, everything that everybody else is building – all geared towards the same demographic. The young, as I affectionately refer to them – hip-and-cool, the twenty-something’s and thirty-something’s that want the product that we’re building. We’re going to build more product for it because we’ve not satisfied that demand.

But, we feel that the Boomers…we anticipated this back in 2003…will be looking for something different. They’re mature professionals, sophisticated empty-nesters. They’re not going to be satisfied with the same thing that the hip-and-cool were looking for. They want more and that “more” is what we’re building today.

MK: We haven’t even alluded to the name of it, yet, but we’re referring to the Signature Tower…

TG: Yes, sir.

MK: Before I get to the question on the Signature, Downtown Nashville, in comparison to other cities and other markets, is still grossly underserved in its residential square footage. You were responsible for more square footage in the residential marketplace Downtown than anybody else.

TG: Well, we’re very pleased to have a part in this. There’re many, many smart developers here in this town doing some wonderful projects. Our focus has been the urban core, the CC zone district, the historic Downtown of Nashville in all of the high-rise product we have done. In SoBro, we’re the only developer of new, high-rise product.

So, these are our two areas of concentration and we are very proud about the buildings that we’ve added in those two markets. We have essentially dominated that scene.

On the adaptive reuse front in Downtown Nashville, Aaron White of Core Development has done a magnificent job. He’s one of my favourite developers. I tour his projects and love what I see. He’s very, very creative. But, our focus has been new construction.

The statistics in Downtown Nashville don’t match-up with the headlines you read. Unfortunately, the sensational headlines that really talk about national phenomenon like Vegas and Florida where there’s been massive overbuilding and just meteoric rises in interest in housing prices. That simply didn’t happen in Nashville, Tennessee, so while certain areas that overbuilt and had just spectacular price increases experience a correction, most other markets in the country are doing very, very well. Prices are actually rising. You’re going to see some statistics on that released by the Board of Realtors as early as this week.

In Downtown Nashville, there are roughly 1,100 existing condominium homes – that’s it! That’s the entire market. Under construction, there’s another 1,000 units. Those will all be completed in the spring and summer of 2008. Once those are all completed, 2,100 units will be the entirety of the market. Everything on the drawing board represents about 1,500 units. If all of that could be completed by 2009, that would be 3,600 units.

Certainly, all of that won’t be completed by 2009. It simply can’t be done. But, all of the experts like Robert Charles Lesser, ERA, consultants, they all predict the need for housing in Downtown Nashville of 5,200 units.

Well, we can’t get there. We may be halfway there in 2009, but even if we could have 5,200, that would put us 50% or less than any of our peer cities, which includes Charlotte, Memphis, Indianapolis and St. Louis. We are grossly behind ½-⅓ of what our peer cities have.

It’s interesting to talk about a city like Denver where I spent time. I lived in one of the high-rises. I bought it cheap, I sold it cheap when I left. Right across the street from me was Writer Square. They couldn’t sell these units. Today, there is an absolute explosion of condominium residences in Downtown Denver. It’s unbelievable – all the Downtown residents.

I don’t have that number on the tip of my tongue, but I will tell you about the same timeframe in the early 80’s, there were two condominium towers in Downtown San Diego – two of them. Both of them were in receivership. Today, there are nearly 30,000 people living in Downtown San Diego and I think 29% of them are over 55 years old.

That number in Nashville hovers around 10% of the total number of people that live Downtown, so we’re definitely in out infancy. We are by no means, a mature market. We have a long way to go. It will be another decade before we are at a position where we’ll be stabilized.

MK: Let’s talk about that generation – the Baby Boomers and the product you’re building for the Signature Tower. It’s slated to be currently, I guess, the third tallest building in the US.

TG: The numbers that I’ve heard would make it the seventh tallest and the tallest building outside of Chicago and New York.

MK: The question everybody wants to know, of course, you’re asked every week is how far along you are in your pre-selling and when are you breaking ground.

TG: I am asked that question…you said every week…I think it’s…

MK: …everyday, twice a day.

TG: …breakfast, lunch, dinner and everything in between.

Let me tell you the path that we’re on in Signature Tower. We launched the project in 2003 and we set five goals for ourselves with the project.

Number one – the project, we wanted to get all of the drawings done, all of the construction documents for this building. Number two – we wanted to buy the land.
Number three – we wanted to get all of the entitlements for this project. This is a very complex skyscraper of a building. It’s the first building to be designed pursuant to the 2006 building code in the state of Tennessee. The code was just adopted two months ago.

I’m happy to report that we have in fact, bought the land, we have in fact, completed the drawings and we have in fact, received all the entitlements.

On the presale front, point number four – we wanted to presell half the units. Well, we got to a quarter of the units and then, the market slowed and that’s where we are right now. We need to sell another 100 condos. We’re doing them two and three units at a time. We’re working very, very aggressively to get that done as soon as possible. So, we’re about half way, maybe about 55% of our way through our presale goal.

The last issue was a guaranteed max price contract from our general contractor. We had selected a general contractor 15 months ago. For whatever reason, we weren’t able to get there. In August, we had to let that contractor go. No hard feelings. We wish them the best. They wish us the best. We just need to identify a new general contractor that can provide the quality product, the scope of the product that we have at the budget we’ve established for this project. That’s very fundamental, but very, very important.

So, three of the five goals that we set for ourselves have been achieved. We’re working aggressively on the remaining two.

The excavation for this project, the permits are already in hand. The excavation for this project takes five months. It’s approximately $5 million in five months and we’re looking to start that work this calendar year, so we’re very committed to the project.

If you’re too polite to ask me the question, is Signature Tower going to go, I’ll just go ahead and give you the answer to that. Yes in fact, it is going to go. We’ve got $22 million invested in this property. If it takes us a little longer to get the presales, so be it. We’re not going to be happy about it, but we’re committed to the project long-term. Signature Tower is not like anything else that we’ve ever done.

Typically in our development projects, we have well over $150 million worth of development going on right now. All the projects follow the same path: identify a financial partner; then launch-off on preliminary drawings; secure basic entitlements; and move on from there.

Signature Tower – we took a different path. It’s a skyscraper. It’s a very significant building. It’s a historic event in Downtown Nashville. We didn’t take the path of identifying a financial partner because it’s too grand for that. How are you going to show a picture to somebody and say, “Hey, would you like to be a part of a historic building in Downtown Nashville?” It’s just too outrageous by Nashville standards.

So, we made it and we have all the investment today, all the progress we’ve made, we’ve done without a third party financial partner. Only today, this physical day, we sent out a memorandum to a select group of possible investors, saying, “Listen, we’re now ready to accept some third-party capital with which to get the excavation of this project underway while we work to complete the presales, while we work to complete the guaranteed maximum price contract for this building.”

So, I’ve got an entire team here, dozens of professionals that are under contract – architects, engineers and others out in the field. We’re committed to making this project a magnificent addition to Downtown skyline.

MK: Now, this is purely speculation, but you just put a property up for sale in the North Gulch area. Are you planning to use the proceeds of that to help push this along a little further or is that completely separate altogether?

TG: What’s funny, in a recent newspaper article, they linked the sale of that to the fact that we’re working on a new tower in the SoBro area. They’re really unrelated, but the Gulch property, I originally started pursuing in 2001. I contracted for this Polar Cold Storage building that sits on approximately six acres, worked on a plan to convert that building to 80 loft-style residence. Completed the drawings, a local architectural firm did it. Took it to the development agency – they weren’t interested in creating a new development district. Took it to the historic preservationist – they didn’t think the building had any historic significance, so there were no tax credits available for that. Took it to the state, looking to see if there might be some interest in some tax credits for some housing for the state – there was no interest there. So, I let my contract go at the time.

During the time I was working on this, I contracted to buy the adjoining acreage from CSX. Well, one thing led to another – it took about two years for that closing to occur. When it was about ready to close on that portion of the land, it was almost nine acres there, I called the Polar Cold Storage people and I said, “Hey, would you like to sell that building. They said, “Yes.” So, I bought the entire nine acres, not really having a specific plan for development.

Since that time, my partners and I have gotten very active in the SoBro area with Encore, very active in preparation for the development of a second tower in SoBro. So, the decision was made not to pursue development of a new area for us in the Gulch, but rather to liquidate that asset, and yes, divert those funds into whatever we might want to divert them to, including SoBro and our urban developments.

So, Signature Tower has significant cash requirements, as I mentioned $5 million worth of excavation, that’s $1 million a month. So, Signature Tower is a very large-scale project, requires a lot of capital. Sure, I’ll use a portion of that capital in Signature Tower but other portions of it will go somewhere else. The property in the Gulch is much more valuable today because of the success of the Gulch, Capital G that Steve Turner, Bristol and Joe Barker have done there on the other side of Broadway. So, the announcement that Magic Johnson’s involved out there came on the same day we put our property up for sale – we’re pretty happy campers.

MK: Let’s talk more about what you just mentioned, about some of your interest in SoBro and you have a development there now called Encore. You just mentioned another tower you’re working on. What are your long-term visions for that area in SoBro besides this tower or whatever else you see happening down there.

TG: Well, it’s interesting. I think you’ll see a reoccurring theme. We like to do projects that 80-90% of the population thinks we’re a little bit crazy. When we introduced apartments at the corner of 6th and Church, I’ll tell you that 99% of Nashvillians didn’t think the project would ever be built or certainly, if it got built, it wouldn’t be successful. It got built, it was successful. The folks that we sold it to, at a profit, are enjoying record rents. It’s a wonderful success story.

At the conclusion of that transaction, they asked us to convert the top four floors to condominiums and we sold those top four floors as high as $458 per square foot, absolutely phenomenal. The Viridian was pioneering, likewise the Encore building, was viewed as a little bit ahead of it’s time.

I first brought my partners out there and said, “This is where we need to build our next tower.” They looked to the left and looked to the right and they said, “My goodness gracious! You can get by a golf cart here, you can get a new engine for your car. You can get your bumpers chromed but what you can’t do is live and you can’t shop. Why would you want to be here?” I said, “Oh, but there’s something coming called the Schermerhorn Symphony Hall.”

So, we bought that land before SoBro got cool and we bought it very, very attractively. We were able to get that project underway, no presales whatsoever. We broke ground in May, waited until after September when the Schermerhorn Symphony Hall introduced the world to SoBro, the area south of Broadway. We opened our Sales Center in late October and we’re almost 85% pre-sold on that unit. We won’t be completed to provide occupancy to the first resident until sometime in February or March of 2008.

MK: What about the other tower you mentioned briefly?

TG: The second tower would be largely residential – predominantly residential with at least 300 units.

MK: Is that just near it or behind it?

TG: It’s in close proximity to it. We have a site, a Phase II site, but the site that we’ve identified for our second tower is not the site that we already own. That’s going to surprise people that I think everybody certainly expects us to build our second tower in the site that we already control. But there’s another site that came available to us that was very exciting to us and we’re very enthused. I think that when we announce our plans for it, I think people will get very, very excited.

But the second tower will be largely residential. Like the first tower, it will have retail at the base. Encore has 20,000 square feet of retail. The second tower may actually have more retail at the base and this time we’d like to do something a little differently. If possible is work with the city. Rather than just build a parching garage that serves our building, like we do with every one of our buildings, work with the city so it could be shared not only with our homeowners and retailers but also with the Downtown dynamic of SoBro. Parking for the Symphony, the Country Music Hall of Fame, overflow parking for the Pinnacle building, parking for events at the Sommet Center, there’s lot of exciting things that a large scale-parking garage can help stimulate and facilitate.

I think that’s a more appropriate development model if we can pull it off. It’s going to take the cooperation of a number of different apartments but I think we can get it done.

MK: To close out, let’s go back to the Signature Tower.

TG: It’s my favourite thing to talk about.

MK: It’s your favourite. Everybody is talking about Signature Tower. Who do you consider your competition for that building? Is it here in this market or is it somewhere else? When people are looking to buy a unit there – maybe you see it that they’re Baby Boomers, maybe retiring just looking for a place to settle down. Are they looking between Atlanta/ Nashville or are they looking between Signature or some other project?

TG: Let me answer it this way. I make a practice of never saying anything negative about anybody else’s projects. I believe that a rising tide lifts all ships and I want everybody to be successful.

So, whenever I’m doing a comparison, I always talk about my own buildings. I talk about the Cumberland, the Viridian, the Encore, the Bennie Dillon, our Belle Meade projects, etc. I can tell you that none of those projects are in the same category as the Signature Tower. From ground up, Signature Tower is meant to be a statement for Nashville, Tennessee.

From the structure, from the glass and glazing, the ornamental crown at the top, the elevators at 1,200 feet per minute. The amenities of a fine boutique hotel, the services such as 24-hour a day room service, concierge service and maid service. Valet parking, an on-site restaurant, spa, two pools, essentially an urban resort on a 15,000 square foot activity deck in the back, this building is not like anything else in the market.

If I toured you through our existing product and then I took you over to the Sales Center for Signature Tower, you will immediately see the differences in the bathrooms. You’ll immediately see the difference in the kitchens. You’d see the quality of this building would just be absolutely and immediately evident to you.

Things like powder rooms and pantries that are just not part of the vocabulary of the hip and cool. They’re not important elements for that particular demographic. All of our buyers of this particular product demand powder rooms, demand pantries.

The cabinetry is custom cabinetry by Wood-Mode, which is voted year after year in all of the surveys last year, 20,000 architects, engineers and interior planners, voted Wood-Mode Cabinetry the finest custom cabinetry in America today. That’s standard within our building.

All the appliances are Sub Zero, Wolf, top of the line cooler fixtures. Wood flooring and top of the line floor coverings, tiles, granites, marbles. It’s just the finishes are all extraordinary. The bathrooms, almost all of them have both garden tubs and large showers, water closets with pocket doors. These are just things that you don’t see in these other projects and that’s the beginning.

The building is built squarely to accommodate the discerning buyer, the mature professional, the sophisticated empty nester. When the building is completed in 2010, those in Nashville that don’t get it when I sit here and talk about it, they will understand completely. Those lucky few that step up and pre-purchase the first 200 of these units will look like geniuses in 2010, I assure you.

ML: Well, Tony, we could go on and on talking about all these different developments. I appreciate you taking the time and I’ll spare my listeners going on any longer.

TG: Great. Thank you so much and please visit our website at www.signaturetowernashville.com for more information.

MK: Great. Thanks, Tony.

TG: Thank you.

(Music Up)

MK: I want to thank you all for turning in to another episode of the NAI Nashville Market Report. We want to hear from you, please be sure to stop by our website at www.nainashville.com. There you’ll find all of our contact info or you can e-mail me directly at podcast@nainashville.com.

If you have any ideas for future programs or guest interviews, please be sure to drop me a line to let me know and we’ll do our best to arrange that. We’re certainly open to suggestions.

I just want to thank all of you for giving us some excellent feedback on the daily e-mails that we sent out covering commercial real estate items, we’ll continue to offer that. You can also subscribe to those updates at our website as well.

So that does it for today, please be sure to tune in again in the future for another NAI Nashville Market Report podcast. Again, I’m your host, Mark Krejci, and we’ll see you again next time.

(Music Out)

©2007 NAI Nashville
300 Broadway, Nashville, TN 37201
(615) 850-2700, www.nainashville.com

For this episode of the NAI Nashville Market Report podcast, I sat down with Nashville’s premier developer Tony Giarratana, president of Giarratana Development. When residents of Nashville think of housing in the downtown area, the name Tony Giarratana is the first to come to mind. In fact, Giarratana and his partners are responsible for the majority of the housing in the Central Business District. Giarratana’s focus on the downtown market has been constant since he formed his development company in 1986.

In this interview we discuss Tony’s background and experience, what brought him to Nashville and his various developments including the much anticipated Signature Tower.

If you are reading this through email or an RSS reader, please be sure to stop by our web site at NAInashville.com to listen or download this episode and subscribe for free to future updates.

In this episode of the NAI Nashville Market Report, Richard Lawson of the Nashville City Paper joined us as we sat down with John L. Knott, the President and CEO of the Noisette company.  John was recently in town to speak at a local Urban Land Institute Event entitled “Regenerating Healthy Urban Communities for the 21st Century“.

Noisette is a 3,000-acre, sustainable urban redevelopment effort in North Charleston, South Carolina, which includes 350 acres that were once part of the Charleston Naval Complex, that are being transformed into a new mixed-use urban community called the Navy Yard at Noisette.

While here in Nashville, we have great resources like The Plan of Nashville and a very healthy development environment, its always good to step back and look at the sustainability of these communities we’re creating.  In this episode we adress this issue from a macro viewpoint and also look at how Nashville is doing from John’s viewpoint.

If you’re reading this through email or an RSS reader, please be sure to stop by our web site to get more information on these issues and many others affecting our marketplace in Nashville, Tennessee.

JK: Unfortunatly the way we’ve been planning our developments and planning our cities, it’s been more about the physical infrastructure or the physical buildings. It’s not organized around the concept of social health.

(Music Up)

MK: This is the NAI Nashville report for Monday, November 5th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast where we feature commercial real estate news and events happening in the Middle Tennessee area.

On today’s podcast, we have a very special guest. We have John Knott from the Noisette Company in South Carolina. The Noisette Project is one of the largest sustainable developments in our country. We have a special guest interviewer today, Richard Lawson from the Nashville City Paper who came on to interview John for us. John was in town for a local Urban Land Institute event and he took some time out from his day to speak with us about his project going on in South Carolina and how it may relate to some of the projects we have here in Nashville.

So, I hope you enjoy the podcast. Please be sure to stop by our website at anytime, at www.nainashville.com where you can see archives of past shows. You can also see daily news items relating to our commercial market place. So, please be sure to log on there and subscribe to updates using either e-mail, iTunes or the RSS feed.

So, without further ado, let’s get into the interview and I’ll come back afterwards.

(Music Out)

RL: We’re here with John Knott, co-founder and CEO of the Noisette Company, who has been spending the past 20 years of his life doing urban redevelopment, sustainable development In Charleston, South Carolina, a city that is quite often considered a model for urban redevelopment and historic preservation.

Welcome, John.

JK: Thank you.

RL: Let’s start with your latest project, the Naval Shipyard project down there. That’s got to be an interesting project considering it is formerly a nuclear shipyard.

JK: Yes. What we have, it’s about a 1,600-acre naval facility. We have 350 acres of that facility. The shipyard is controlled by a private user, then the Port Authority and federal enclave has the southern 800 acres of the facility. The 3,000 Noisette area is 2,600 acres of the existing city, which is the original founding city. This 3,000 acres is 90% of the founding city of the City of North Charleston when it was incorporated in 1972. So, it’s a pretty massive project.

RL: What all are they doing in there? What type of residential, what type of commercial, what type of retail, that kind of stuff?

JK: The 3,000-acre area has, within the 2,600-acre area, there are 13,000 who live there. There was an existing over about 5,400 housing units and about 4 million square feet of existing commercial and industrial facilities very much in an economic and social depressed area.

So, you had housing trading at $54 a square foot. Vacancies at 50%, commercial vacancies in the 70% range, commercial property trading at the $40,000-50,000 an acre range. So, the crime rates were extensive in the area and in the closed shipyards. We actually did a master plan for the 3,000-acre area as a sustainable rebuilding of that original core city.

On our navy yard property, we’re developing 6-10 million square feet of commercial and retail, 5,000-7,000 housing units in that range. So, it’s a very urban mixed-use, kind of old Boston scales, if you want to think in terms of an image. We’ve re-developed about a million square feet of foot warehouse and flex space, about another 2,050 square feet of office.

RL: For those who don’t really know what sustainable development means, give us kind of a brief definition of sustainable development.

JK: There are a lot of definitions out there. For us, it really means triple-bottom line. It means that we’re looking to serve the social, economic and environmental health of the entire community, not just our group long term. So, every decision we’re making is a long term decision, balanced in those three sectors, and across every economic level.

The Brundtland Commission definition was basically, conducting your affairs in such a way that what you consume today does not jeopardize the quality of life or the ability of future generations to live better than you live today.

RL: In that vein, you talk about the environmental side of it, obviously, being there with the naval shipyard and it being closed, what kind of environmental issues did you guys have to work through to get it ready for any kind of development?

JK: Well, actually, this is the first property that the military closed where they…we’re actually doing this to clean up in advance and had it insured. They used private contractors, so the shipyard was primarily cleaned up. The residential standards, through navy contracts, it was about a $70 million on the land. They did not clean up the buildings.

So, most of our work in clean up has to do with asbestos, lead and all types of other things that you find in buildings. If we happen to find other things in the land itself, then the navy is required, by law and by contract, to come back and clean it up, of course, and compensate us if we have to do the clean up. Of course, nobody gives you the person whoever signs the check and the treasury to do that so we actually have a $20 million insurance liability policy that’s an environmental policy that will actually bridge that funding gap, if we have to get into a more extensive clean up on the land.

RL: In terms of selling the houses, do you have to worry about convincing people, “No, you won’t glow after a while.” Anything like that?

JK: No. We have spent so much time focused on the ecosystem restoration around the area. We’ve built public parks already. We’ve got 10 ½ acres of Riverfront Park open. I think we’ve really integrated people into the place in such a way and finally made it accessible after 105 years. We just have thousands of people in there every week, in activities and different efforts.

So, people are getting used to being in this base and seeing that it’s a fairly healthy place, and it’s not a big problem with the environmental conditions.

RL: Have you started selling houses to residents or move anybody in?

JK: We have no residents living there except for places that we’re renting or leasing that are already existing in the officers housing area. Our first new residential development will break ground in the second quarter of ’08. We have 500 housing units under contract for land sales with other developers. Remember, these are all vertical, so we’re not selling lots, we’re selling parcels, we’re vertical development. It’s mixed-use are going on those properties.

We have about 700,000-800,000 square feet of commercial, institutional and retail development that has already been contracted. We have, as I said, about a million square feet to a million one that we’ve already leased on the base. We have 61 new businesses, 800 employees in the navy yard now. In the Noisette area, in the 3,000-acre area, there are 2,200 housing units under development now. Probably about 300-400 of those are now occupied. That’s in an area where nothing was being developed for 20 plus years.

RL: So this slowing housing sales nationally hasn’t seem to hit Charleston just yet.

JK: No, it’s hit Charleston in certain areas but it has not hit us. We’re in a very central location. We’re five minutes from the airport, we have the best access off 26 and 526. We have better access than the City of Charleston itself. We also have a very strong affordability factor. If you look at the peninsula, which is at the south of us, you’re looking at a mean of probably $700 a square foot. If you look at Mt. Pleasant, Old Village and those areas to the east of us, you’re looking at an average of probably 600,000 or 700,000. As you go further out it’s 500,000, Daniel Island it’s 600,000, Summerville it’s 300,000. We were starting at a mean of $54 a square foot, which is sensitive at 60,000 mean in 2001. Today, we’re probably at a mean of about 180,000.

So, the properties in that area are trading so substantially bellow even the mean of the overall market no matter where you go, with this financial crisis and everything else, everything is falling to us. So, we’re in the right position. We’re not in the upper end of the market.

RL: So, you guys are kind of the cradle?

JK: Yes, and we’re so well located. The fact that we have such stringent environmental standards for even our single-family residential, with the Noisette Quality Home Standard, every property that’s being developed, we’re doing in an exoteric reserve, every single house. We’ve got 108 builders, 100 lots already sold. We’ve got 20 up, another 20 under construction. Everything is pre-sold. We just don’t have enough supply.

RL: That’s good to have sort of that problem, I think, especially when there’s a market that’s not a good market. Tell us, what was the biggest hurdle in sort of working through all this and doing the master planning and getting them moving forward.

JK: I think that the biggest hurdle in the master planning was probably, initially, having the confidence of the community. Just remember, here we are as a developer, master planning 3,000 acres of a city that we don’t own and we’re not under contract to the city. We actually invested that money ourselves. So, the first question by anybody in the community is, “What are you doing here?”

RL: …and, “Why do you care?”

JK: “Why do you care?” “What are all these standards?” “I’ve never seen a developer like this,” and “Do you expect us to trust you?” My first answer to that question is, “Absolutely not. I don’t expect you to trust us. I expect you to listen to what we say. I expect you to see if we do what we say, that we do what we say or exceed what we say, then you can start to consider whether you’ll trust us.”

So, we’ve engaged over 4,000 people in these communities over 2 ½ years to build this master plan. So, it’s their plan, it’s not our plan. Once that conversion was made, went for our approvals, our next problem was, as the turnaround of the area, this area was not as upchuck an area as…

RL: Well, it was in the shadow of the naval shipyard, so it had to be very depressed when the shipyard just closed.

JK: It was, and it had declined over time, but it was also very blue collar. It had always been blue collar. It was on an area that was very kind of Wild West, rough-and-tumble kind of place versus the rest of the area of Charleston. Charleston is well known for its attitude so you kind of look down your nose. Then, when the decline happened a lot of other problems set in as well. Of course, the stuff that you see around any shipyard, with all that transiency in a shipyard, all the associated professions that find themselves around a shipyard, doesn’t add to the economic…it adds a certain economic health but not to the overall health of the city.

RL: So they had interesting entertainment options.

JK: Yes, they did. They had very interesting entertainment options. That’s a good way of putting it.

So, I think that once this thing started to turn around, which everybody thought was impossible, what started happening was business interest that didn’t really want to be in it, didn’t see any value, all of a sudden started to see value there. But that wasn’t being controlled by them, it was being controlled by us. We weren’t from there so that created its own problems. Then, the Redevelopment Authority was supposed to be transferring the land to the city, all of a sudden, delayed the transfer for three years, because they really didn’t seem to have much interest in transferring the land. That was the state authority that have been created that was one of the few bases in the country that have been closed to sit entirely in one city, and the city had no control over what was going on the base.

RL: Your lobbyist must have been really busy.

JK: I had no lobbyist.

RL: So, you must have been really busy.

JK: Yes.

RL: What could Nashville learn from some of the stuff you’ve done there? That’s a big project. I don’t think we have anything quite that large going on here. It’s more in pocket. I guess, probably, the biggest would be Rolling Mill Hill perhaps.

JK: Well, I think you have to think about this in a different way. I mean we’re effectively leveraging 350 acres of direct development to influence and assist the transformation over 3,000 urban-acre area that we don’t own. So, you certainly have projects like the Gulch and others that could leverage themselves beyond their property.

What we’ve done is several things. One is we’ve really taken the leadership to create a true community based planning process that isn’t a charrette that you come in for a week, puts some drawings up, then say, “What do you think?” and then come back. It’s a very iterate process. It engages people in a conversation about what they like, what they don’t like and what they think is missing in the neighbourhood, by neighbourhood, by neighbourhood, meeting by meeting, by meeting to reform. It’s basically, applying strategic planning, business strategic planning, that you would run in your corporation, to strategic planning for a city. So, it’s a very different master planning process.

Second component is whole community involvement process. We’ve been building a model for 35 years of how to engage communities in this conversation.

The third is, for the first time we were able to get to the system. We can’t fix our cities unless we start getting to the systems level. That means you’ve got to get to scale, because you can’t design sustainable infrastructure, you can’t fix your social problems and you can’t get that resolved unless you get to that large scale level.

So, we, in the first time in this country, have really moved to that level and created a model for that. So, I think that it’s totally transferable, even if the city were to conduct it, you could conduct an entire urban initiative within a city conducted it. We actually talked about that at the meeting we had at the Chamber today.

So, I think there are a lot of lessons but I also think the lesson here is that we believe that the social health of everybody in the community, from conception to death, is at the core of how you plan. Unfortunately, the way we’ve been planning our developments and planning our cities, it’s been more about the physical infrastructure or the physical buildings. It’s not organized around the concept of social health.

RL: Have you had a chance to look at the Plan of Nashville?

JK: I have not seen the Plan of Nashville, I’ve seen the book. I want to get the Plan of Nashville when I go to the Design Forum tonight. I’ve been hearing a lot about it. I’m actually blown away by what I’ve seen here physically. What I’ve see is really good thinking. You could see it physically in the forms here. You could see it in the kind of investment in buildings. You could see it in some of your public infrastructures. But what you can’t see is the social side of this thing. So, I asked the key question today at this meeting, where are you in this holistic thinking process about seeing how all these systems that are physical systems are connected to all the social systems that in an integrated way, serve the health for everybody in the region equally.

RL: I don’t know that the city or I don’t think that folks have really thought about it at that level. That would be a very interesting exercise to go with it.

JK: That’s what everybody in the room said, they hadn’t thought of it. One of the things that we talked about today with the research person at the Chamber was in our work around the country – if you go to chapter 2 or 3 in our master planning you’ll see these charts. But what we’re finding over the last 30 years in this country is that the average density per square mile has reduced by at least half. That means a number people per square mile has reduced.

What that means is you’re having to deploy infrastructure and social service systems. When I say social service systems, I’m not talking about welfare. Social service systems are things like police, schools, fire; all those are social service systems. Those systems are having to be deployed against a much wider area for less and less people per square mile. A lot of areas of this country, and I bet you Nashville isn’t all that different, if you look at it’s sprawl equation over the last 30 years, what you’re going to find is…let’s say in 20 or 30 years your population growth has been 50% or 100%, whatever it is. I almost assure you that your land use has more than doubled, if not 300% or 400%.

That’s a non-fundable equation. It has no economic sense to it. Yet, at the same time, all that we’re doing is running around and saying, “Let’s cut taxes.” So, if we were in business, what that’s saying is I can increase the cost to my product but I don’t have to charge my customer what the cost is. I then actually give them the product for below cost. I don’t have to be efficient about it.

RL: So, your idea and the ideas that you’ve developed, and this is an idea that’s been brought up here and everywhere really, is if you create dense nodes, if you can create that density, bring people back in that you can actually reduce the cost to your services?

JK: Yes, and you can afford to make really strategic, well thought through investments that actually make some sense long term.

RL: Now, how do you convince the population to do that? The population goes out, they want that property, they want that land. They want to have that front yard that backyard, they want the schools, they want all of that. How do you work through and convince them? That’s really what you have to do. The government would certainly like to do it but how do you convince…?

JK: I’m not so sure about that. Number one, you say the people, who are the people? What are the people now? What is everybody now?

RL: The people who are sprawling out.

JK: Do they know it’s costing to provide that service to them? We were talking today that we’re having problems with people getting downtown because you charge for parking. You charge so much a square foot for the support services on a tax base. While out in the suburban market where you have all this “free parking” and you have all these roads to deploy all these people, to get them all over the place, is anybody being charged for that? Well, no. Why is one being charged and one not? That’s a public decision.

RL: Sure. You could see the directness, you come downtown, you’ve got to pay to park. You move out to the suburbs, you get free parking. Getting from that point to understanding what the bigger cost is, is it probably a little too esoteric for folks to understand. That’s where government comes in and tries to explain that. But it’s a matter whether people actually care to hear it.

JK: I think it’s where the private sector comes in because the private sector has to start being honest about this conversation. We in the private sector have to start taking the leadership to solve this problem. Ineffectively, the private sector in this country, even the public sector, have been focused in the last 40 or 50 years, on short term economic decision making and so are we as individuals in our own consumerism. We don’t really think about the impact beyond us and we don’t think about what’s causing things to be long term.

I’ll give you just a simple example. If you do surveys, and this have been done a great deal, just do a survey of kids in school and survey of most of the people in your community, find out – inventory – what they want to save in their community. You will not find much in the buildings, you’ll find parks in different areas, you’ll find statues but you won’t find public utility buildings. Yet, if I look at a public utility building built before 1920 lots of people want to save them. They’re beautiful buildings. What did we build waterworks buildings, sewer works buildings and power facilities look beautiful then when we didn’t have as much money and we build them now and they look ugly as sin, we put them in the back room.

It’s all the short term decision making that’s going on and we’re doing it out of the context of what the impact of those decisions are. We don’t know the results. But I do think we’re seeing a tipping point that has arrived all over the country everywhere. If you simply look in imprisonment rates, if you look at failing public schools, if you look at closed libraries, if you look at teen obesity, if you look at teen suicide, if you look at child respiratory disease, you can’t look at a social metric in this country and not see a real big problem. Well, all of a sudden people are starting to connect all those pieces in their own lives. They’re looking around and saying, “What’s the solution? What’s going on?”

RK: In talking about all this, sort of linking these things together, when you were going through this project in the Charleston area, are these things that you guys talked in the community meetings, these are the things that you talked to people. You’ve said here is the cost of doing this, this and this. Here’s a comparative cost or an alternative cost if you were to move in and do some of these things.

JK: Right. It’s like affordable housing. When the 50% of the people in this country spend more on their car payment than they pay on the mortgage or rent of their home, why do they do that? Well, because they don’t have any choice. There’s no transportation system, everything is spread out, everything is separated so the only way you have to get around, then you just start looking at who can drive.

Do you realize if you take the people who can’t drive because they’re elderly, the people who are handicapped and the people under 16, you add all those numbers up, that’s more than 50% of our population. That means we have a system that’s designed for 50% of our population or more to be in prison unless somebody else unless somebody else is chauffeuring them around.

None of this is making any sense but no one is talking about those things. No one is bringing that information out. All the politicians know it, most of the business leaders know it and no one is willing to take the hit for telling the truth. I think all the public wants to know is the truth.

Then, if you look at your markets, the biggest markets for growth on housing today are 52 and older, and 21 to 32. The 32-52 market is not very big. Those two markets, you want their highest demand location is? Urban. Then, even if you look at the 32-52 market, I think it’s something like less than 12% is the traditional nuclear family. It’s a huge percent that are single parents. You tell me that’s great if you’ve got a mom and dad at home, and somebody can drive people around. What do you do when you’re a single parent, you get an 8 and 9 year old kids, your school is over here and 10 miles over here you’re working? What do you do?

RL: You hope the bus system works.

JK: Well, there is no bus system.

RK: They have the school bus system.

JK: Well, sure. What happens when they’re sick, the bus system isn’t running. Why are we building schools that aren’t in neighbourhoods where people could walk to them like we used to build them?

RL: Obviously, what you’re discussing, what you talk about and what you’re thinking about is it’s a very complex problem. You start talking about building schools in neighbourhoods that’s well up the school. If you’re building a school in a mostly black neighbourhood, you build a school in a mostly white neighbourhood, then you start talking segregation issues by virtue of that. Those are the social views that you start dealing at the complexity of all of that.

JK: It’s very complex and the problem is we haven’t had those kind of conversations. We also have all of us individually and all of our disciplines are sitting in silos and nothing is being connected. It isn’t just the social conversation it’s the economic conversation and the health care conversation, all these things are all sitting in these different silos. Yet, when you start looking at all of the pieces to the puzzle, you look at them together, you start seeing relationships that are causing the problems with each other. When you start to see those relationships you could very cost effectively start to solve those problems.

RK: It’s sort of going back down into a neighbourhood level when you look at gentrification of neighbourhoods. You always see there’s a certain cycle in these neighbourhoods. They come in and it’s the poor, the elderly and a lot of times black. They get pushed out through the process of gentrification, they can’t afford to live there because of property tax increases. Their home becomes more valuable so they sell, or they’re renting and the owner sells. In terms of doing sustainable development, how do you prevent that from happening because these people who get pushed out of the neighbourhood, they’ve got to go somewhere else. It doesn’t solve the problem…

JK: Why do they have to go someplace else?

RL: That’s typically how it’s worked. So, they pick someplace else to move to. It’s like pushing a rope around in a way.

JK: We keep moving the problem someplace else that it gets worse and worse…

RK: Exactly.

JK: …because it gets further and further out. So what you need to do is you need to focus on why is that problem occurring. The reason the problem is occurring is because the amount of density we’re getting in these areas is fairly low. We’re requiring sizes of buildings and houses that are too big for many of these people to afford. I don’t mean just the economics of buying it. A lot of these people who want this house don’t want anything as big as we’re requiring. Then its starts to attract, then we have no mixed use, we have no mixed income. We’ve taken all that out of the equation. That’s not the way our cities work up through 1950 or 1960. Our cities never worked that way.

If you trace the history of our cities in this country, you will see just example after example of the great areas that maintain their highest wealth today are areas that were mix use, were mixed income, were mixed sizes and multi-family next to single family. Everything interconnected with retail, services and everything else. It wasn’t high-end Rodeo Drive, it was just neighbourhoods that all worked together. We’ve somehow come up with this idea that we have to have a model that has no interconnected grid. That has only a certain size house that with a minimum size footprint on the first floor, a minimum size square footage because God forbid you should have different sizes next to each other because that would destroy the economics of the neighbourhood, which isn’t true. There’s no validity to that. In fact, just the opposite has been proven.

So, somehow we’ve evolved over the last 40 or 50 years and basically it was driven by this automobile machine that started in the…

RL: I was just going to ask, when the car came into greater use, that’s what allowed this to come about.

JK: How did the car come into greater use? Why isn’t the public transit system in place? Why are not all the streetcars in place that used to be here?

RK: Car companies had better lobbyists.

JK: Yes and how did those disappear?

RL: Better sales people.

JK: The National Bus Company was created…

RK: The tire companies wanted to sell tires, too. The streetcars don’t have tires.

JK: Right and the National Bus Company was created, funded by the federal government, which then purchased all the systems and shut them down. Then the National Highway System was build, which was actually for defense originally. It was supposed to be limited access highways, then all of a sudden we started putting all these access points on this limited access highway and now all of a sudden…

RL: …is opportunity for development. Hey, they’ve got to stop somewhere to eat.

JK: Right. Then we have drive until you qualify, so…oh, my goodness! It doesn’t work anymore because now instead of gas being $0.25 a gallon, now we’re up to $3 a gallon. That pretty aggressively starts to affect drive until you qualify when you start putting all that cost together.

RK: When you look at neighbourhoods and one of the ones you may see is German Town. There was the plant there, the bag factory. You had the boss’ house and you had the next boss’ house, the next boss’. So, everybody lived within a few blocks of each other so you had to really pretty much basically walk to work with each other.

So, you have that and now you have the car that comes in, you have the Microcar, and it just gets expanded. Now you have this big city here were the bosses all live and over here are where all the workers live. So, instead of walking to work with each other, they’re driving past each other to work. That’s the kind of thing that sounds like the true sustainable development, you’re trying to turn back the clock of time in certain respect.

JK: I really don’t look at it that way. I think we’re not trying to turn back the clock of time, I think we’re trying to understand what makes healthy places. What makes good economics for everybody involved, not just a few people. I think sustainability is becoming the answer to addressing our children’s health, it’s addressing the economics of cities. We’ve got a great opportunity in this country. It may look like a problem but it’s a real opportunity.

RL: …and it’s going to cost us more to fix it than anybody really wants to pay or acknowledge that they’re going to have to pay.

JK: We have a $1.6 trillion deficit just to repair what we have. We haven’t even counted the number to replace it all, which has to be replaced in the next 20 years. Water, sewer, roads and the power infrastructure is about ready to crash. So, we have a great opportunity. Either we’re going to let it all fall apart and we have nothing, which we’re not going to do, or we’re going to rebuild it. So, if we can rebuild it more sensibly, with longer term value built in as opposed to something that’s going to fall apart. It’s the great intersection of great opportunity. Out of that great crisis comes this new opportunity that if we do it sustainably we’ll have a much better world.

RK: Well, on that note, it sounds like it’s going to be a long, complex problem that’s going to involve everybody.

John, thank you very much for sitting down with me.

JK: Thank you.

(Music In and Up)

MK: I want to thank our guest for today’s program, John. We thank you for coming by to spend a couple of minutes with us, talking about your project. Again, thank you to Richard Lawson of the Nashville City Paper for conducting the interview.

So that does it for this edition of the NAI Nashville Market Report. Please be sure to listen in next time where we’ll be talking to uber developer in Nashville, Tony Giarratana, about his developments and some of the most recent updates on his projects. As always, please visit our website where you can find past episodes. You can also find transcriptions of all these interviews if you’d rather read them, just click on the “Transcript” link and you can read or use for your own purposes the transcripts of these interviews that we conducted.

Thank you again and we’ll see you next time on another NAI Nashville Market Report.

(Music Out)

©2007 NAI Nashville
300 Broadway, Nashville, TN 37201
(615) 850-2700, www.nainashville.com

BS: I think we are embarking on phase two of the Convention Center 10 years from now. That’s how confident I am in its success.

(Music Up)

MK: This is the NAI Nashville Market Report for Saturday, August the 18th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast where we feature the latest news and happenings in the commercial real estate industry here in Nashville, Tennessee and beyond.

We have a great episode for you today. We have the President of the Nashville Convention and Visitors Bureau, as well as Bert Mathews who is also on the board of the Nashville Music City Center Coalition. Together we discuss many issues going on with the new Convention Center proposal, what it means for Nashville and what we can expect going forward, I think you’ll really enjoy it.

As always, if you’d like to hear past episodes of the Nashville Market report, please visit our website at nainashville.com, click on podcasts and there you’ll see ways to subscribe via e-mail, RSS or even iTunes.

So, without further ado, let’s jump right into our interview with Butch and Bert.

(Music Out)

MK: We do have a lot of people listening to us around the country, outside of our market who don’t know what’s going on here. Why is this important that we’re looking at a new Convention Center, where this began, what’s sort of the back story behind a new Convention Center?

BS: The conversation about a new Convention Center goes back almost 10 years, in terms of legitimate efforts and real research. We started recognizing the significant amount of lost business in the late ‘90s, we did some feasibility in ’99 and the story has only gotten more compelling. Probably the beauty is the business community at large recognize the value of the hospitality industry, I say, three years ago, at the request of the mayor to look into it, and when the business community jumped on board it took a life of its own and it hasn’t slowed down since.

MK: So, where is it at today in terms of the progress?

BS: We’re at a great place. Many people would say the Convention Center is a done deal, it is not quite a final or complete. It is one vote away from moving into RFPs and design phase. We had a resounding 30 to 2 vote in our city council two weeks ago, and we have two mayoral candidates in a run off and both of them have endorsed the project. So, we’re right at the cusp of making it happen but we can’t take the eye off the ball.

MK: Both of you are on the board of this thing called the Music City Center Coalition. Explain what the purpose behind that is.

BM: The Music City Center Coalition is really the business community explored the idea at the request of the mayor. A number of people came together to gather research in terms of what the market was, the financial feasibility and the cost, reported that to the mayor. The mayor said, let’s take a look and study it a little bit more and the Music City Center Coalition, which is today a variety of individuals and more than a thousand people who have signed up to be a part of it, is a group whose job it is to move the Convention Center forward.

BS: I will add to Bert’s great description that we have raised from the private sector about $350,000 to support the campaign and we have 32 organizational endorsement from as diverse as the Urban League and the Country Music Association. So, support is overwhelming and that’s what’s led the project to this final step.

MK: You can use this as a call-to-action out there, too. So, the NR industry, GNAR just stepped-up, which is Greater Nashville Association of Realtors, who else are you looking for? Who’s still dragging their feet, who do you want to step-up and join?

BS: I don’t think we can ever have too much support. We have a new Metro Council coming in September and we have a new mayor in the end of September. Both of those bodies need the confidence that the city supports it. So, any organizations, any businesses, anybody that has experience and understanding the value of these types of civic projects – come on, you’re welcome.

MK: Let’s shift gears there, back-up a bit because there is another Convention Center in the city of Nashville at the Opryland Resort area, they’ve just announced a major expansion on what they’re doing. How do they compete, if at all, with this center and how are you guys working together in this market place?

BS: They compliment each other. They have for the last 20 years. The research 10 years ago showed that there was room for both. The research four years ago showed there was room for both. We have supported their efforts, we’re please that they’re moving forward now as a result of that last vote that I’ve mentioned, to spend $400 million on an expansion and they’re supporting the downtown – the new Convention Center efforts and the new Convention Center is supporting them.

They’re really two distinctly different markets for the most part. There’s minimal overlap and Nashville’s in a great position, Bert may want to add to this, but I will point out, from our standpoint, the different cities Gaylord is in around the country, they are not in the same political geographic area as the main Convention Center, if it’s Dallas, Orlando, DC, they’re outside the marketing boundaries. We’re in the same marketing boundaries so we’re partners. What’s good for Gaylord is good for the city and vice versa.

So, we’re in the unique position to support both and make sure both are successful. The other markets, they compete with the primary with destination.

BM: The other thing that’s advantageous is that there are conventions that tend to go to resorts where you come, you stay and the amenity packages there, there are other ones that come to cities and explore a diverse urban experience. So, having both of those really makes Nashville much, much stronger. So, we are supportive as much as they have been for us.

BS: I was with 40 clients Tuesday, at lunch in DC, they love the news about both. Some are excited about coming downtown, some are excited that they will fit better out at Opryland.

MK: One of those news items was we are Music City USA, it was last week that was announced that NAMM was coming back – The Nashville Association of Music Merchants.

BS: They’ve been the poster child for this effort and they were here for 11 years in a row. They outgrew us several years before they left but they did everything they could to shoehorn themselves in, they finally decided they needed to experiment in some other cities. As you’ve mentioned, we’re very pleased that they’re coming back. They haven not done as well in other markets and they shouldn’t have, they belong here. They’re coming back before the new center is built, they’re going to grow with us and we’re ready.

MK: What about in terms of an anchor hotel, I know there’s a couple different possibilities there. What are we looking at for the hotel that would anchor on to this Convention Center?

BM: I think that one of the things that we’ve learned is that it’s extremely important for there to be an anchor hotel hat’s a part of it. There have been any number of people who have approached the MCC and approached the city to talk about that opportunity. I think as the project moves forward, the location of that, the flag for that, how it’s financed, all those pieces will fall into line but there is a tremendous amount of private sector interest in making that happen.

BS: I think it would be a relatively easy sell. The interest has been pouring in since we’ve released the report of the recommendations a year and a half ago. All the usual suspects that you would expect have more than inquired and have been doing their due diligence. So, we look forward to form an RFP and getting the best product for this.

MK: What about in terms of the construction of the actual center, have you guys picked a construction company for that or if not, what are you looking for?

BM: I’ll tell you, I think that what’s really going to be important and I think what will happen very soon is that whoever the next mayor is, there’s a process in our city of going through and designing these major projects, building these major projects and financing these major projects. We’ve gone through a lot of them preliminary due diligence, if you will. Is it feasible, is it financeable, all those steps, we’re ready now to execute on the plan and who the contractor is, what the specifics of what it looks like, those things are really, put that next mayor is really, hopefully going to be tasking folks to do.

BS: There have been a number of local and national partnerships being formed on the periphery, with the anticipation that they’ll get to bit. I think that that is pretty smart for national/international construction companies to partner with local, national architectural firms to partner with local and create the right kind of synergy so that’s there’s an understanding of what Nashville needs and also, an opportunity to bring in expertise on a national or international basis.

But, it’s wide open. So, if your listeners sharpen their pencils, make contact with some local companies, they’re welcome to join the firm.

MK: Let’s do a little vision casting for those folks then. Ten years down the road from today, the center is up and running, what is this place look like here in Nashville and how is the city working with it?

BS: That’s a great question. I think there’s an interesting, almost dichotomy. I hope, and I think, Lower Broad doesn’t look any different. The honky-tonks, the historic buildings, they’re in place they’re thriving. The authentic music, I think SoBro takes on and that’s the area south of Broadway for our listeners, takes on a totally new life and look, and becomes a very cool, very hip entertainment and urban residential area, clubs, restaurants, retail. From my perspective, I hope not a lot of change, there’ll be some but we have an opportunity to charter our own destiny and keep our authenticity in place. I think that that’s a big part of everybody’s vision.

BM: In addition to that, you’ll have a center that’s hopefully, acknowledged as one of the best in the world that has an active part in the neighbourhood that surrounds it. That is an attraction for thousands of visitors in and out of there that come to Nashville to be a part of that experience, and that the Convention Center becomes a real part of our fabric. People are down there to visit, to see the art, that are down there to visit the restaurant that’s in the Convention Center because it’s in one of the Liner buildings that are actually living two or three floors up and are a part of it.

There are so many things that we can do. Music venues inside of it that really make this center part of the community, as well as an incredible resource to support the Convention and Visitors Business that we have.

BS: I’ll add tow things. One is, I think it’ll be millions of new visitors, and maybe a lot of people don’t realize, will cross the 11 million annual visitor mark this year. So, there’s a significant amount of people that come here. Now, we look forward to growing that. The other piece that I’ll add, as I think we are embarking on phase two of the Convention Center 10 years from now, that’s how confident I am in it’s success and it’s demand. I probably have the most to lose if it doesn’t work so I am that positive about this city’s drawing power.

MK: So, bringing it back to present day, next actions today, what are we looking at? What are the next steps you guys are looking at moving forward from here on?

BM: There are a couple of things that have happened, (1) as Butch said, we have passed to the city council a variety of funding mechanisms and those taxes will start to be collected, hopefully as early as September 1st.

BS: September 1st, they actually got the word today. Forms have gone out, the Clerks Office has contacted the majority of the hotels already.

BM: So, with that we will have begun to raise money, the city will begin to collect taxes paid for by visitors that will fund this new center that will give us the money to finish the due diligence. The next steps are really the next mayor who will be elected on September 11th, stepping up and saying, “This is what we need to get started with. I task this organization, this entity and this person to deliver it,” and we’re on our way.

BS: I agree. We have the people, the past experience of large projects and the mechanisms to move it along. So, our job as a committee is to move it along and we think, very realistic, that we can…fast track is a relative term with this large a project, but as much as you can fast track something like this, I think we have that opportunity in front of us.

BM: I think Butch started out, when we were talking, by mentioning the need for the Downtown Convention Center in the compelling case – the compelling case is lost conventions. So, everyday that we’re not in the ground, everyday that we’re not closer to opening, is the day that the city is losing tax revenue that otherwise is going to have to be paid for by property tax or sales tax by local individuals.

MK: Butch, Bert, thank you. Any parting thoughts as we go out?

BS: I think if anybody is listening, the time to check out Nashville, if they haven’t already is right now, because this city is moving and moving in a great direction. It’s not just fast growth. It’s quality growth, its significant growth and it’s thoughtful growth.

(Music Up)

MK: Thank you.

BM: Thank you.

MK: Thank you for listening to another episode of the NAI Nashville Market Report, be sure to tune in again later where we’ll talk about more issues affecting our real estate and development marketplace here in Nashville.

If you’d like to receive daily news updates in your e-mail about commercial real estates and other development issues happening in our marketplace, just visit our website at nainashville.com, click on the news tab and you’ll see news items updated everyday relating only to the commercial real estate industry. Also, if you’re interested in reading up on our market reports, click on the Nashville Market and you can view the second quarter market reports covering the office, industrial and retail markets.

That will do it for today, thank you for taking the time to listen in. Be sure to join us again in the future for another NAI Nashville Market report.

(Music Out)

For this episode of the NAI Nashville Market Report podcast, I had the opportunity to sit down with Butch Spyridon, President of the Nashville Convention and Visitors Bureau, and Bert Mathews who (along with Butch) sit on the board of The Music City Center Coalition. From their web site, this group defines themselves as the following:

A growing number of business and civic organizations and individuals in Nashville are joining the citizens group actively leading the discussion about the need for a new downtown convention center. Called the Music City Center Coalition, the 501(c)(4) group is dedicated to seeing the Music City Center dream become a reality.

We discuss where the center is currently at in the process, and cover other related news items concerning this development.

Please feel free to send us your feedback about the podcast, or inquire further about this development by contacting us any time by calling (615) 850-2700, or emailing me directly at podcast@nainashville.com

HG: Now that Nashville is celebrating all of its great accomplishments, the convention centre, will be, really, an exclamation point for the next 30, 40 years.

(Music Up)

MK: This is the NAI Nashville Market Report for Wednesday, July the 18th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast where we cover the commercial real estate and development here in Nashville, Tennessee and beyond.

Just a couple of weeks from now, we’ll be having an election for a new mayor for the city of Nashville. In the next couple of podcasts, I did a series of interviews with the candidates to get their thoughts on various commercial real estates and other issues affecting the downtown Nashville.

If you’re listening to this through iTunes or an online streaming media player, please be sure to stop by our website at nainashville.com where you can listen to past interviews of other commercial real estate related items. You can also click on the news tab where you’ll see daily commercial real estate related stories happening here in our marketplace.

Without further ado, let’s get into our interviews. On today’s program, I interviewed Howard Gentry. So, let’s chime in and listen to what he had to say.

(Music out)

MK: Over the past several years, we’ve been ranked number one by numerous publications in a variety of categories, from corporate expansion, smartest place to live, for family relocations, etc. What will you do as a mayor to ensure that we keep this high mark?

HG: The reason for the high ranking is the fact that Nashville has been moving, progressing in a very exciting way and we are very fortunate to have such a diverse offering in our city, musically, artistically, educationally, developmentally and economically. What I’m going to do, since I have been involved over the last, at least, six years of my political career is to continue to recruit those business entities that are providing so many professional opportunities to our city to continue to support and promote those entities that are already here, such as our music industry and our healthcare industry. As a matter of fact, I will have an Office of Music and Entertainment in the Mayor’s Office to continue to promote the music. But, also to attract those entities that surround music, such as marketing, merchandising, technology and other areas. Also, the film industry, and as it relates to, our healthcare industry continue to promote their efforts so that the healthcare within this city can become a model, rather then suffering the same challenges that we suffer across the nation. So, long answer to a short question.

I’m going to continue to promote Nashville in the ways that we’ll have it not only appear, but in reality, be: the friendliest city, the favourite city to move your company, your families; a progressive city, a city that is… What’s that, the new one? We’ve been one of the coolest cities, but there’s another one that we’re on the verge of being and I’ll think of it as we go. But the fact is that what I hope to become is, also, one of the most technology advanced cities. We haven’t gotten to that point, yet, where we are in the top rung, but we are moving up the ladder.

MK: A potential boon for downtown economy is the proposed convention center. How is this a priority for you and how do you propose it be funded?

HG: It’s absolutely a priority. I was here when the last convention center was built. There was a lot of controversy around it, not necessarily because of it, but because of how it got started. It just took awhile to get moving, but the fact is that it did take us to another level as a city and it helped to boost the downtown economy.

Over time, that economy subsided. Now that we are on the move again and now that Nashville is celebrating all of its great accomplishments, the convention center will be, really, an exclamation point for the next 30, 40 years. That’s how important it is.

We have now determined that tourism is our second largest revenue producing entity. With the convention center downtown, it will increase our opportunity to attract outside visitors to our city. It will increase our opportunity to showoff Nashville as we draw the conventioneers to Nashville. It will also create a very, very strong economic market around that center as a facility. Also, it will help to vitalize and energize downtown because we are moving in a direction of encouraging people to move downtown, encouraging businesses to move downtown, both retail and otherwise. It just fits into the new, emerging Nashville in the downtown development. It is absolutely important. We will fund it as we did the prior convention center. The State of Tennessee has provided an opportunity to utilize the hotel/motel taxes and other resource streams that are paid-for by our visitors, such as the fee on transportation, taxi transportation and other costs that our visitors pay. I want to make sure that our convention center is not a burden to our local taxpayers, on our local tax base, but absolutely paid for by those people who visit our city, have a great experience and have a good time. We want to just weave it into the cost of their visit to Nashville, treat them so good that they’ll come back and do it again, over and over.

MK: After the Sounds ballpark development fell through on the riverfront, Mayor Purcell proposed that an amphitheater be built on that site. What are your thoughts about the highest and best use for that particular site?

HG: The fact is that even though it’s probably time for me to look in another direction, I’m not totally giving-up on the ballpark. I still believe that baseball was absolutely the best usage for that location. Be that as it may, when things don’t happen, there’s a reason and we might have to move-on from that wish and that dream. If so, I’m not certain that the initiative that the mayor brought forward is the best usage. I know that it is a nice usage and a usage that would…or an opportunity that, I think, the city could benefit from. It creates an environment for family. It creates an environment for tourists. Also, it creates an entertainment environment that we could utilize in a big way, being Nashville Music City.

But, I’d also like to see that opportunity to receive financial benefits in the greatest way, too. I think, what I would like to do is to just hold-off and see what other ideas come forward to determine if, in fact, not only will we have a great family, visitor and entertainment venue, but also maybe a venue that provides all of that plus a sustainable string of income or revenue. Some would argue that the amphitheater would be a string of income, sustainable over months, over time.

MK: One of the largest concerns from visitors, residents and even employees about being downtown is the transportation infrastructure and parking. What will you do, as Mayor, to improve this situation?

HG: Parking is really our biggest challenge right now. With downtown not taking-up the greatest landmass, the fact is that we all want to drive downtown. We all want to park. We all want to get to our cars and get out of downtown.

I served on a taskforce to review the parking. Downtown is really involving more of the state parking initiatives. The state is our biggest parking tenant downtown and they’re not getting any smaller. As the city grows and as we attract more residents downtown, more corporations and more businesses, parking is going to become even more of a challenge.

It was determined that there is a definite need for parking, but also, a need to coordinate the movement from existing parking to a particular housing or businesses that people are either working or living. There needs to be a plan and I would, as mayor, work to help develop a plan where we first, will move persons from the existing parking to their jobs or their homes in the downtown area, utilizing all other sources. We have the Titans parking lot. We also have the Gulch area that could provide a great resource for us, at it relates to parking. What needs to happen is, not just to build a lot or a parking facility, but also couple-in with that transportation to and from. We have the ability in our city to step-up our ground transportation. Our bus lines are right around 60%. We have opportunities for trolley in the downtown area, buses and bus lanes in the downtown area. I would work to have a comprehensive approach to parking and transit in the downtown area, even to the point, if need be, to look at developing a multilevel parking facility in the downtown area. You’d be surprised though with the number of spaces we have already, we can handle a lot more capacity than people know. It’s just that, it’s not organized. It needs to be planned and organized with a partnership between the parking initiative and the transit industry.

MK: With numerous sites currently under construction downtown and Nissan leaving the BellSouth Tower for their new headquarters in Cool Springs pretty soon, there’s a large amount of office square footage that is just going to become vacant. How will you keep downtown an attractive place for companies to do business?

HG: I really look at that as opportunities to bring more businesses to downtown. I’m really bothered by the fact that Nissan is leaving downtown. Really and truly, we should have found a place for Nissan within the Davidson County lines and we didn’t do it.

But, with our growth and redevelopment of downtown really just beginning to take effect, if we bring the residential in the way we plan, it is going to be necessary that we also provide opportunities for residential dwellers in the downtown area. When you bring the residential population downtown, it’s usually a connected affect based on were they work. I think that it will give us an opportunity to go out and recruit other businesses, even in the Nashville area, to move back to the downtown area. Now, you say, “Why will they want to come without some type of incentive?” One incentive might be just a viable, energetic, exciting downtown again. Another is that we could provide tax increment, financing and other incentives that will help them to help us improve and enhance the downtown area. I just don’t believe that we’ll find ourselves based on the continued growth and development downtown in a situation where we’ll have a lot of vacant space.

MK: There’s a strong moving right now around Green Buildings and LEED Certification around the world. What are your thoughts on making sustainable development a priority for this city?

HG: Sustainable development needs to be the priority because when you talk about the vision of Nashville…and everybody wants to know what your vision is…it’s got to be a vision that can be sustained. The only way to actualize a vision is to have developments that will last over time that will not become a financial burden over time. LEED Certified sustainable development is the way to go. Now, the city needs to take a leadership role in it. The city, also, needs to work very hard to educate and develop an environmentally friendly and sustainable culture. See, we in Nashville are not used to going too far to improve the environment as it relates to carpooling and not driving our own cars, to downsizing when it comes to our vehicles and things that we do. We are not at a point where we have had to understand or deal with the importance of paying a little bit more on the front-end to ensure less cost over time. It takes an education and development of that culture as with recycling and other initiatives.

I was happy that the Metro Council, which I serve as Vice Mayor, brought forth legislation that requires the city to develop LEED-certified at a certain level of square footage and also, cost. We are now developing our new buildings in a sustainable way, that we are looking in our existing buildings that are truly not cost-effective, making the necessary changes within those structures that are environmentally friendly and sustainable over time…I think, that probably leaves us at saying…that are sustainable. As Mayor, I am going to not only continue to encourage it as a government, but also, to reward it through development that is also sustainable. I think that one way to encourage sustainability and LEED development is to reward those developers who choose to develop in an environmentally friendly fashion. I stop short of making it just across-the-board requirement at this point because I think, we have to move into it as a city, not slowly, but carefully so that as we do change our posture, so to speak, and our culture as we develop and build, that we bring everybody along, both in an acceptable way and also, a knowledgeable way. You just can’t switch over to LEED without knowing what you’re doing and having some seminar and good idea about it.

MK: Are there other cities that have been through this growth transition that we’re experiencing right now, that you, as mayor, would look to as a model for economic growth and development in going forward?

HG: Nashville is so unique that I could not pick any one city as a model, but there are cities that, to me, are cities that I would like to, in some ways, emulate. I like the big, wide streets, the clean and just the nice downtown of Charlotte, North Carolina. It’s just, I was very, very pleased, excited and encouraged when I visited Charlotte and saw how the transportation system moved. That’s one of the places where I first saw the dedicated lanes downtown and how they move. I was there for a convention and how they just moved us in and out, and how downtown just seems so resident and tourist-friendly.

I like the aggressiveness of Chicago as it relates to their school system, as it relates to the development of the downtown area and the redevelopment of many areas in the downtown area. The difference is that Chicago has a different kind of government and they have a mayor that can stay there as long as they keep voting for him so a lot of their projects are a continuation of years and years of projects by the same person.

As I look at Washington, DC and Baltimore, their riverfront development is just awesome. Baltimore’s downtown development, starting with the riverfront, is really appealing to me.

There’s another city that not a lot of people talk about, but really reminds me of Nashville and that’s Columbus, Ohio. Columbus, Ohio is where my family is from. I’m the only one that wasn’t born there so I’ve watched Columbus grow over the years and Columbus is similar to Nashville in population. It even looks and feels like Nashville. The downtown growth is a little ahead of us or has been, but their population or the diversity of their population is very similar. The cultural diversity is very similar. The fact that they are a college town, where we may have 14, they’ve got one that has about the same amount of students. But, their arts and culture are similar. Also, the challenges they have had within their inner city have created the some challenges that we are experiencing here. How do you redevelop and grow and not allow gentrification in that type of growth and redevelopment to interfere with the traditional lifestyle of people who have been there forever and a time. Also, the satellite cities and the outer laying counties are having the tremendous growth that our outer laying counties have, such as Dublin, Ohio and all the little cities around, and again, it amazes. Columbus started, a little bit, before us and I’ve actually watched that as a model, also. That’s a city that we could utilize a lot of examples from.

MK: Well, thank you so much for joining us today.

HG: Thank you, I appreciate it.

(Music Up)

MK: That was our podcast for today. Thank you for listening to the NAI Nashville Market Report. Please be sure to go to our website at www.nainashville.com where you can hear more interviews of other mayoral candidates and their thoughts on the same topics. There on the website, you’ll have an option to subscribe to these podcast by e-mail, RSS or on iTunes media player. If you subscribe by e-mail, you also get an additional feature, for everyday you’ll get an e-mail about the current commercial real estate related news stories going on right now. So, you can stay updated and informed on what’s going on in this marketplace.

So, that’s it for today. Thanks again for tuning in. We’ll see you again later for another NAI Nashville Market Report.

(Music out)

(Music Up)

MK: This is the NAI, Nashville Market Report for Friday, July the 6th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast, where we cover the commercial real estate and development industry here in Nashville, Tennessee and beyond.

In just a couple of weeks from now, we’ll be having an election for a new mayor for the city of Nashville. In the next couple of podcast, I did a series of interviews with the candidates to get their thoughts on various commercial real estates and other issues affecting the downtown Nashville.

If you’re listening to this through iTunes or online streaming media player, please be sure to stop by our website at nainashville.com, where you can listen to past interviews of other commercial real estate related items. You can also click on the news tab where you’ll see daily commercial real estate related stories happening here in our marketplace.

Without further ado, let’s get into our interviews. Today’s episode, I interviewed Karl Dean. So, let’s chime in and listen to what he had to say.

(Music out)

MK: Over the past several years, we’ve been ranked number one by numerous publications in a variety of categories, from corporate expansion, smartest place to live, for family relocations, etc. What will you do as a mayor to ensure that we keep this high mark?

KD: Well, we have been ranked highly. I think, what I would do as mayor is to keep my eyes on the basics, which are the key thing we need to do to continue to be a popular place for business to relocate is to improve our public school system. When businesses decide to move to Nashville, they’re really looking at the region Middle Tennessee. We have to be competitive and I think, actually, exceed the surrounding counties in the quality of our schools because that I think, enters into the equation more and more where businesses are going to locate.

So, I think, (1) having good public schools; and (2) public safety, which is always got to be on the agenda. When you’re an urban area and we’re not the only really truly urban area in the Middle Tennessee region, we’ve got to have, pay attention to public safety. There’s good news there, we’re at 16-year lows in a lot of crime statistics but that’s something that you can never take your eye off of. Then, you want to have a friendly attitude where we’re actually going out into businesses, encourage them to look at Nashville and to relocate to Nashville.

So, that’s how I do that. Then the other issues in terms of livability, quality of life type things, I mean, again, it’s the basics. The mayor’s got to hit the pitch on public safety, the mayor’s got to hit the pitch on public education and the mayor’s got to hit the pitch on economic development. You do all those things that the rest of it takes care of itself. We are a unique city, we have a unique product and I think, people are going to want to come here more and more and we’ll stay high in the rankings.

MK: A potential boon for downtown economy is the proposed convention center. How is this a priority for you and how do you propose it be funded?

KS: It’s a top priority for me. I think that it’s not just…We need to distinguish it from other downtown projects. It’s not a stadium, it’s not an arena for a team to play. This is an investment in ourselves. To me, it’s a real opportunity for us to expand our revenue sources beyond property taxes. I would finance it the way the old one was financed, largely from hotel/motel tax and the car rentals from the airport. It should not be taking any funds from metro general revenue to pay for it. I see it as a win-win where we’re going to be bringing in people who will be, as you mentioned, these national rankings, you have Travel + Leisure that ranked us as the friendliest city in America. We can be friendly, tax our visitors and receive additional sales tax in millions of dollars, which will allow us to make our schools better. So, I’m a big advocate of the convention center.

MK: After the Sounds ballpark development fell through on the riverfront, Mayor Purcell proposed that an amphitheater be built on that site. What are your thoughts about the highest and best use for that particular site?

KD: For that particular site, I mean, I see a great deal of expansion downtown, along the river and on South of Broadway in terms of more retail and then housing and commercial usage. This site is special. It is owned by the city. It is in a unique location. So, I think, what we need to do is put something there that is civic in nature. That could be a ballpark, that could be an amphitheater. I don’t want to rush into making a decision on it. But one thing we need to remember, it’s also a good spot for something that is sort of a signature for the city.

One of the new things that cities are looking at is having green spaces and parks downtown that are special. You can have an amphitheater there that will make it special, you could build something like, in Chicago, at the park there, the Millennium idea. We can do something unique there and having green space, it’s important to have green space downtown that’s on the ground not just on top of the roofs. I mean, people need to have access to green space and I would look at that particular piece of property as a good place for something that is civic in nature. The city should retain ownership of it as much as possible.

MK: One of the largest concerns from visitors, residents and even employees about being downtown is the transportation infrastructure and parking. What will you do, as Mayor, to improve this situation?

KD: For parking, we need to examine it carefully. I would not be opposed to considering building the municipal parking garage and have it paid through revenue bonds. I mean, you can pay for itself over time. I would look at that. Now, there may be other ways to do that in the private sector that would be more cost efficient, if that’s true, then we ought to do that. But in terms of transportation, I have actually, probably only candidate, as a proposal that deals with transportation issues, which is to use these rapid bus transit, which would be buses that would be on the major corridors leading into the city. They’re larger buses, they are buses that are equipped with the technologies that when they approach an interaction, the lights turn green which gets you downtown faster and they also have bus stops that would go with them, they will have real time information. So, if you’re sitting on West End waiting for a bus, you would know that a bus is coming in 3 or 4 minutes, you’re not sitting there praying that a bus might show up. To me, this could work because you know, you’ve got $3 gallon of gasoline, you have the cost of parking, you have the traffic issues. These buses can get you downtown faster than you can in a car. That’s a good thing.

In addition to that, we have environmental issues, where 11 days out of the year our air quality is poor, it’s unhealthy, and this would help answer that. I think, you could do it relatively cost efficiently. You could start on it almost immediately. MTA already has funding for eight such buses. You can begin with Gallatin road or West End or some road that has a turn lane in it and use it during rush hours. You can ramp up to this as funds become available. So, I mean, I would want to get started on that almost immediately as mayor.

Now, the other issue about transportation, which I think, is the larger issue, is the surrounding counties and people coming into the county, which is a regional issue. I think the next mayor needs to be a regional leader. The next mayor needs to be looking out, not only just to talk but issues that affect us internally but from the outside, it affect us, such as traffic, which affects us environmentally, economic issues. But, for regional transportation issues, we need to work cooperatively, try to get as much federal and state funding as we can and regional cooperation is the key there.

MK: With numerous sites currently under construction downtown and Nissan leaving the BellSouth Tower for their new headquarters in Cool Springs pretty soon, there’s a large amount of office square footage that is just going to become vacant. How will you keep downtown an attractive place for companies to do business?

KD: Well, I think, part of it is doing things like having transportation, part of it is having adequate parking, part of it is being conscious that the downtown is an attractive place to be. I think this whole idea of having a civic spot on the rivers is important. But the mayor also has to be a person who’s recruiting and developing business. You’ve got to be able to reach out to businesses around the country and hopefully, we do more to relocate corporate headquarters. We’ve done well in the last couple of years, I’m sure in Louisiana-Pacific and others. But we need to continue to do that. I think it’s vital to the whole region that downtown remains the hub, that downtown remains an area that has a real commercial activity going on. I’d be committed to doing that.

MK: There’s a strong moving right now around Green Buildings and LEED Certification around the world. What are your thoughts on making sustainable development a priority for this city?

KD: Well, I think, what metro needs to do is lead by example. You know, the market will drive a lot of this. I think people will be looking at ways of more energy, to build with more energy efficiency, to recycle more construction and demolition material because the market is going to encourage it. But metro itself needs to be the leader. We took a positive step in passing an ordinance regarding LEED standards certification for the city. We need to do that and we need to go out and make sure that our other older buildings are energy efficient. To do audits on them and make any changes we can because really, what it comes down to, it’s not only the positive environmental effects in terms of reducing emissions, but it also is positive in the sense of reducing expenses for the city. If we’re energy efficient, we’re going to save money and be that much more effective.

MK: Are there cities that have been through this growth transition that were experiencing right now, that you as mayor, would look to as a model for economic growth and development going forward.

KD: Yes. I’ve done several inter-city visits where we’ve looked at different cities and their best practices were things that were not doing quite as well. I mean, for instance, I think St. Louis is a great city but St. Louis has a problem in a sense, they don’t have a countywide government like us. They’re just a city there and they have real issues they’re trying to address in terms of their tax base.

So, we need to make sure that we protect the metropolitan government that we have this countywide government. That’s what I learned from St. Louis. I look at a city like Chicago, I think, from Chicago, this Millennium Park idea having a signature statement downtown is a good idea. I like the idea that Chicago has done a lot with downtown beautification in terms of trees, in terms of flowers. They just pay attention to those details that makes it a very attractive place for tourist to go to. I mean, people from Nashville go to Chicago now on a regular basis for shopping and the urban experience, we need to learn something from that. I think Salt Lake City has done a lot with issues regarding the environment. They’ve been really, sort of a pioneer there. I would look at Salt Lake City as a good area.

In terms of sprawl, development and regionalism, you know, I think, Portland will probably be one extreme…probably further than were Nashville would want to be. But in Portland, they are thinking along regional terms, which we need to do more and more of. Minneapolis does a lot of that, too.

So, they are examples all over the country of good things going on and things we can – practices we can learn from. I mean, Atlanta is often cited as an example but we don’t want to have that sort of rapid growth, it is unmanageable. Again, I would learn from that. But I think, what a mayor needs to do, is to be paying attention to what’s going on all over America, all over the world about the way cities are run and learn things.

MK: Well, thank you so much for joining us today.

KD: Alright, thank you.

(Music Up)

MK: That was our podcast for today. Thank you for listening to NAI Nashville Market Report. Please be sure to go to our website at www.nainashville.com where you can hear more interviews of other mayoral candidates and their thoughts on the same topics. There on the website, you’ll have an option to subscribe to these podcast by e-mail, RSS or on iTunes media player. If you subscribe by e-mail, you also get an additional feature, for everyday you’ll get e-mail about the current commercial real estate related news stories going on right now. So, you can stay updated and informed on what’s going on in this marketplace.

So, that’s it for today. Thanks again for tuning in. We’ll see you again later for another NAI Nashville Market Report.

(Music out)

BD: There’s no one city that just says they got it all wrapped up. We want to be that city one day. Everybody would be looking at us.

(Music Up)

MK: This is the NAI, Nashville Market Report for Friday, July the 6th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast, where we cover the commercial real estate and development industry here in Nashville, Tennessee and beyond.

In just a couple of weeks from now, we’ll be having an election for a new mayor for the city of Nashville. In the next couple of podcasts, I did a series of interviews with the candidates to get their thoughts on various commercial real estates and other issues affecting the downtown Nashville.

If you’re listening to this through iTunes or online streaming media player, please be sure to stop by our website at nainashville.com, where you can listen to past interviews of other commercial real estate related items. You can also click on the news tab where you’ll see daily commercial real estate related stories happening here in our marketplace.

Without further ado, let’s get into our interviews. Today’s program, I interviewed Buck Dozier. So, let’s chime in and listen to what he had to say.

(Music out)

MK: Over the past several years, we’ve been ranked number one by numerous publications in a variety of categories, from corporate expansion, smartest place to live, for family relocations, etc. What will you do as a mayor to ensure that we keep this high mark?

BD: Well, first and foremost, we need to do a better job of taking care of our existing industries and businesses’ retention, making sure that they are happy in town and not moving to other counties. Of course, next one is recruiting to make sure that we bring the people in here and I’ll have somebody in my office to deal with not only small businesses but someone else to deal with the larger businesses. So, we want to separate them.

KD: A potential boon for our downtown economy is the proposed convention center. How is this a priority for you and how do you propose it be funded?

BD: Well, I was for a convention center before it was popular in Nashville, I actually had a white paper done by a researcher who did…and I went to the Convention and Business Bureau and said, “Look, guys, we need a convention center.” They said, “We’re working on it. We’re fixing to come out with it.” I became aware of it when I was Director Chief of the Federal Program because I kind of brought two huge conventions here and I couldn’t bring them here. We weren’t big enough.

So, I’m totally supportive of it. The centerpiece for economic development is tourism here and the convention center is the venue we need. Now, I want to make sure that the complete plan, not only for the footprint of the convention center but for everything around it and the few blocks to make sure that we do it right. As far as funding it, I think they have worked out funding avenues that I think are very good. It doesn’t deal with the property tax and I’m okay with that. Basically, our visitors are paying for it and that’s the way it should be.

MK: After the Sounds ballpark development fell through on the riverfront, Mayor Purcell proposed that an amphitheater be built on that site. What are your thoughts about the highest and best use for that particular site?

BD: Well, as a Councilperson, I helped slow the process down. He was anxious to get the amphitheater and I said, “You know, we really need to look at this thing a little longer. There are some other ideas out there.” I’m not saying I’m against the amphitheater, I think we lost Starwood and you know, maybe the thing we need…we just need to slow it down, make sure we get all the proposals on the map for us to look at. I believe that the next Mayor, the next Council should actually be the ones dealing with this. So, I’m all for its use and I want to make sure we do it right.

I really don’t have something that I just favor over anything. Music is our brand so having another venue for music, amphitheater, outdoors under the stars, it’s interesting. It makes use, in terms of apartments and that might could be a use for it, not totally my favorite use because they’re building up on Rolling Mill Hill anyway so, they’re coming down. Green Space Park has some interest. It could be useful, too. I do not have a favored yet. I’m willing to look at it.

MK: One of the largest concerns from visitors, residents and even employees about being downtown is the transportation infrastructure and parking. What will you do, as Mayor, to improve this situation?

BD: First of all, people need to know where to park. There’s more parking places downtown and people really don’t know where to find them. There needs to be more work done in educating especially those who are coming down for sporting events and for the Symphony and other places.

Beyond that though, we’re going to look at mass transit but mass transit now is very costly and we’ll continue to look at it because it must be looked at over the long haul. But right now, Music City Star is not paying for itself, so we’ve got to look at that in terms of utilization. I’m for reversible lanes. I’m for the traffic lights being synchronized to make sure that we’re traveling in the proper speed. I’m for bus lanes that could possibly be used for more rapid transit downtown.

There are a number of things we can do from an engineering standpoint or a way to do traffic, but there’s also another side to this. There’s the psychological side. Are we ready to give up our pick-up trucks and our cars? I’m not so sure we are. You know mass transit now in Nashville, it’s not like New York or Philadelphia where it’s all underground, you can stop at various places near where you work. We bring you to one spot, put you on another vehicle and carry you somewhere and that’s difficult for some people. It’s not as convenient for some people to do that.

So, there are a lot of issues here and we want to be careful how we approach it to make sure because all of that cost a lot of money. You know, we need to do some boulevards and we need to do some widening of some roads, we need to work with the State and the Federal Government, especially the State. Nolensville Road, there’s a perfect example of gridlock where the State needs to help us and we’ll do some matching to widen those roads.

MK: With numerous sites currently under construction downtown and Nissan leaving the BellSouth Tower for their new headquarters in Cool Springs pretty soon, there’s a large amount of office square footage that is just going to become vacant. How will you keep downtown an attractive place for companies to do business?

BD: Well, this is again why they need some attention paid to them and this is why I’m going to have somebody in this small business area and the large business area to work with them and give them attention. That’s exactly right, they need some attention. There are some incentives mayors have, TIF money and other things that can be used especially in recruiting, not so much in retention but recruiting. Again, whatever their issues are, if it’s parking or whatever, then I want to know about it in the Mayor’s Office. Again, having somebody on top of them all the time to know what’s going on, I think, is the best way to handle those businesses.

MK: There’s a strong movement right now around Green Buildings and LEED Certification around the world. What are your thoughts on making sustainable development a priority for this city?

BD: Well, it’s very important, I just voted for the LEED Certification for our Metro office buildings dealing with 5,000 sq ft. That’s a start, it’s not totally the answer yet but I think it’s a start in the right direction to make them energy-efficient. Most certainly, I want to do that because it saves the Metro budget and I want to cut that thing where we can and this is one way we can cut it.

I want to make sure though that – the other side of the coin is I don’t want any rules and regulations that hurts individuals so much that they can’t pay for it if we say that everybody has to have a certain type of car. I worry about the single mother out there who’s got four children who are barely paying her rent. I just want to make sure whatever we do is cost effective but most certainly, environmentally friendly.

MK: Are there other cities that have been through this growth transition that we’re experiencing right now, that you as mayor would look to as a model for economic growth and development in going forward?

BD: There’s no one city. I think there are many cities that have done some things well. Indianapolis has done some things well in terms of their convention center and tying that with bridges over the roads to various businesses to make it friendlier for customers to do some shopping.

I think Indianapolis has done a good job also with sports in terms of venues up there. Cincinnati has done some things along the river that I think are worth looking at. I think San Diego is the city that you look at. I wish I have their weather all the time but San Diego has done a good job with green ways and parks and bicycle paths and those kinds of things.

So, I think we’re looking for best practices and so, I think you got to look at a number of places. There’s no one city that just says they got it all wrapped up. We want to be that city one day. Everybody would be looking at us.

MK: Well, thank you so much for joining us today.

BD: You’re welcome, thank you.

(Music Up)

MK: That was our podcast for today. Thank you for listening to the NAI Nashville Market Report. Please be sure to go to our website at www.nainashville.com where you can hear more interviews of other mayoral candidates and their thoughts on the same topics. There on the website, you’ll have an option to subscribe to these podcast by e-mail, RSS or on iTunes media player. If you subscribe by e-mail, you also get an additional feature, for everyday you’ll get an e-mail about the current commercial real estate related news stories going on right now. So, you can stay updated and informed on what’s going on in this marketplace.

So, that’s it for today. Thanks again for tuning in. We’ll see you again later for another NAI Nashville Market Report.

(Music out)

DB: Having the capacity downtown to have more people working here is going to be more and more of an opportunity for Nashville.

(Music Up)

MK: This is the NAI, Nashville Market Report for Friday, July the 6th, 2007. I’m Marc Krejci, the Director of Market Research here at NAI. This is a podcast, where we cover the commercial real estate and development industry here in Nashville, Tennessee and beyond.

In just a couple of weeks from now, we’ll be having an election for a new mayor for the city of Nashville. In the next couple of podcasts, I did a series of interviews with the candidates to get their thoughts on various commercial real estates and other issues affecting the downtown Nashville.

If you’re listening to this through iTunes or online streaming media player, please be sure to stop by our website at nainashville.com, where you can listen to past interviews of other commercial real estate related items. You can also click on the news tab where you’ll see daily commercial real estate related stories happening here in our marketplace.

Without further ado, let’s get into our interviews. On today’s program, I interviewed David Briley. So, let’s chime in and listen to what he had to say.

(Music out)

MK: Over the past several years, we’ve been ranked number one by numerous publications in a variety of categories, from corporate expansion, smartest place to live, for family relocations, etc. What will you do as a mayor to ensure that we keep this high mark?

DB: The mayor has to be most focused on is maintaining the high quality of life and low cost of living. Now, we’re fortunate that Nashville has the lowest tax rate of any city in the state and the mayor has got to stay focused on keeping it low. Additionally, we need to improve the quality of our education. We need to maintain low commute times or short commute times and the low cost of housing. The mayor really has to stay focused on all three of those things and I believe, we’ll continue to attract new people living to the community and new businesses. Frankly, you know, the lack of an income tax is a big component on that, but the quality of life is also a component.

MK: A potential boon for downtown economy is the proposed convention center. How is this a priority for you and how do you propose it be funded?

DB: Well the funding of the convention center needs to come exclusively from tourists and conventioneers through the hotel/motel tax and tourist development zone. I think we can find a way to fund it through those revenues. But in addition, it needs to be built in such a way so, that it doesn’t destroy a big swath of downtown. We need to maintain the street grid, we need to build it in such a way so that it interacts with the surrounding community and I’d like to see it built as a lead certified building.

MK: After the Sounds ballpark development fell through on the riverfront, Mayor Purcell proposed that an amphitheater be built on that site. What are your thoughts about the highest and best use for that particular site?

DB: I think it needs to be a dense, mixed use, mixed income level neighborhood with open space integrated into it. I think it needs to be an example of what a downtown block in Nashville is going to look like for the next 20 – 25 years. It’s a perfect opportunity for us to build that kind of neighborhood there for the first time. It needs to generate tax revenue for the city, if it can, and I think it’s a great opportunity. We need to move very quickly on that proposal.

MK: One of the largest concerns from visitors, residents and even employees about being downtown is the transportation infrastructure and parking. What will you do, as Mayor, to improve this situation?

DB: Well, I think, there are a couple of things. We need to increase the level of professionalism at the Traffic and Parking Commission, and in Public Works. To have more people focus on managing the existing transportation infrastructure downtown because it’s going to get stressed. We have very narrow streets downtown. We’re starting to build some pretty big buildings.

Additionally, I want to see the traffic and parking commission have the authority to build some publicly owned parking structures downtown, change the way we do tax increment financing because I think, that’s one of the biggest impediments to the downtown development and how we’re at a competitive disadvantage with places like Cool Springs. So, I want to see those changes.

MK: With numerous sites currently under construction downtown and Nissan leaving the BellSouth Tower for their new headquarters in Cool Springs pretty soon, there’s a large amount of office square footage that is just going to become vacant. How will you keep downtown an attractive place for companies to do business?

DB: Well, I think, the high quality of life we have downtown needs to be maintained. We need to confront the homeless problem, which is a significant issue for workers downtown. We need to keep the cost of parking as low as we possibly can because that is a competitive disadvantage for downtown. In the end, I think, as commute times go up generally in the region, having the capacity downtown to have more people working here is going to be more and more an opportunity for Nashville.

MK: There’s a strong moving right now around Green Buildings and LEED Certification around the world. What are your thoughts on making sustainable development a priority for this city?

DB: Well, I was the sponsor of legislation at the council level to require LEED Silver Certification for every metro building over 5,000 square feet and that’s a good first step. I wish, we could have included renovations as well but we did in the first go around.

In the private sector I think, we need to offer some incentives for LEED Certification or EarthCraft, I guess, is for single family residences, which could be fast track, permit approval or density bonuses and it’ll start to incentivize the private sector to make those upfront investments that actually get recouped over time if you do build LEED Certified buildings.

MK: Are there other cities that have been through this growth transition that we’re experiencing right now, that you as mayor would look to as a model for economic growth and development in going forward?

DB: Well, I mean, I think, Nashville has to develop its own model because we’re uniquely situated geographically, we’re uniquely situated in the region. So, we have to have our own model. But if you look at Portland and how they have thought about regional planning and growth, if you look at Charlotte and some of the experiences they’ve had, we need to learn from them. Clearly, we need to learn from what’s happened in Atlanta, some things not to do. But I think, if you look at those cities, it will give us some significant ideas about how we can grow better now. If you look at the city of San Francisco, where I lived for about 8 years, look at how they protected their distinct individual neighborhoods and made them all successful. It became, over time, a great attractive factor for people to visit and stay in that area. We need to look at this city in the same way. East Nashville is unique, Belmont Hillsborough is unique. We’ve got an opportunity to build a new unique neighborhood on the East bank of the river where Phillips Metal is. That’s what we need to be thinking about. We don’t need to copy other cities. We need to learn from other cities. They’ve all done some great things and they’ve all done some things that weren’t so great. So, we’re in a position to learn from other cities, I think, more than copy.

MK: Well, thank you so much for joining us today.

DB: No problem, thank you.

(Music Up)

MK: That was our podcast for today. Thank you for listening to the NAI Nashville Market Report. Please be sure to go to our website at www.nainashville.com where you can hear more interviews of other mayoral candidates and their thoughts on the same topics. There on the website, you’ll have an option to subscribe to these podcast by e-mail, RSS or on iTunes media player. If you subscribe by e-mail, you also get an additional feature, for everyday you’ll get an e-mail about the current commercial real estate related news stories going on right now. So, you can stay updated and informed on what’s going on in this marketplace.

So, that’s it for today. Thanks again for tuning in. We’ll see you again later for another NAI Nashville Market Report.

(Music out)

(Music Up)

MK: This is the NAI Nashville Market Report for Friday, April 20th, 2007. Thanks for tuning in. We’ve got a great program for you today and I certainly hope you enjoy it. On Thursday of this past week, we sponsored an event put on by the Nashville Business Journal called Shaping a Greater Nashville. This event was a fast-paced panel discussion, which focused on the growth of the SoBro area. There was an excellent turn out at the event. There were probably about 250 people or so there, very much an excited atmosphere on the things that are happening in downtown Nashville. After the forum, I had a chance to grab a couple of the panelists and get their thoughts and opinions on some of these developments and happenings and that’s what we’ll be featuring in today’s podcast. So, let’s get right into the conversations that I had. First person I was able to grab was Gary Everton. He’s the Principal at Everton Oglesby Architects and we start off by talking about some downtown retails. So, let’s get into it.

(Music Out)

MK: You had a lot of good things to say about Gateway Boulevard and what’s happening there. What are some of the things going on with retail and the pedestrian-friendly structure happening there on that shift that you see coming?

GE: Actually, retail is the hardest component to get worked in and you’re always trying to get things that are unique and more of the Mom and Pop kind of homegrown restaurants, not the chains, but the retail is usually the part that follows after you’ve got the rooftops and the rooftops are coming but they’re not quite all here yet. I mean, there’s a bunch under construction but in every one of the projects, you’re trying to figure out how do we have a street level retail to activate the street and the more people we get living in the area, the more people working in the area, I mean, Bass, Berry & Sims is a large law firm. You get that many people coming and that many people living in the Encore and so on and so forth, and then you’ve got enough impetus for the retail to make sense. Up until then, it’s a little bit of a stretch. You got to somehow cover that gap between getting them started, getting them in there and surviving until there’s enough people to activate the businesses.

MK: Now, let’s talk about some of those efforts. Are you working to work with local entrepreneurs and business owners to bring those retails and start showing them the numbers of, hey, here are workers coming in. Here are the rooftops moving in. What initiatives are being done with the local business owners to actually make that happen now that the momentum is coming?

GE: Actually, I’m not sure I can tell you specifically what’s happening but I would postulate that some of the business owners that have been surviving on Broadway, on 2nd Avenue, they’re the ones that know how to make things work and capitalize on people intensive activities. You look at the Sandersons, you look at, well, Tower Investments, you look at the people that know how to get ahead of the throngs of people that are coming up and down the street. Those are the ones that probably are more likely to take the risk to put in some shops, some restaurants and some things that are services for those people, and then you’ll have to follow along. They’re the ones that see that they’re active, that they’re profitable and you’ll have more people. Activity begets activity almost every time. So, they’re coming. I don’t know of any specific incentives. I do know the Chamber of Commerce and the Nashville Downtown Partnership track all of the activity. They try and encourage the activity and I would say the District Program where they have the Merchants Association is another good venue that’s trying to get their arms around that. They are putting together collective advertising so that you can let everybody know who’s where and “How do I find the hat shop?” or whatever they’re looking for. I think there are some sporadic things happening.

MK: Yes. It’s exciting and the elephant in the room today, which was Thermal Plant site, the ballpark and the Sounds and you seem to have a lot of real good thoughts and comments on that. Without being on the panel, what are your thoughts on “This site needs to do this” or what’s going to happen or are the Sounds leaving town, are we getting another ballpark here or was it really an amphitheater or green space that’s the best use or - what’s happening with that site?

GE: I have to say that you’re obviously correct. The elephant in the room was not discussed because there’s still a lot of behind the scenes dialog going on. Nobody’s going to put out front of this room all of the discussions that are taking place. Now, I will say that site is going to involve not only development density, things are going to have to be there that generate enough income to make sense for the land value but it’s also going to involve some kind of public space because that’s part of our area’s access to the river.

So, ballpark, yes, I think there’s still a possibility, it could be a ballpark. Amphitheater certainly is a possibility. Some sort of public access to the river is going to be folded into that overall development plan. So, stay tuned, there will be more coming. There’s really not anyway to put out there right now, “Here’s what’s going to happen.” There are too many tentacles and too many deals that are being shifted to try and make something work. I think there’s still a chance that the Sounds could be here. I don’t know that anybody can say the Sounds will be here or won’t be here but I think you could just about count on some baseball, be it the Sounds or somebody else. Nashville’s not going to put up with losing a team and not replacing a team.

MK: I hope so. I’m a St. Louis guy so I grew up with Cardinals running through my blood so I hope to see some…

GE: I would love to have the Redbirds here. But Memphis is not going to let go of the Redbirds.

MK: Now, a couple of properties specifically were mentioned on the Riverfront and I did hear a discussion on the actual Riverfront redevelopment plan around the Titans Stadium and whatnot. What are some recent developments since those plans have been announced that are happening in those discussions around that Riverfront redevelopment?

GE: Well, most recently Metro has hired a project manager for the entire Riverfront development area. That’s Chris Koster. So, he’s now on board and you’ve got somebody that’s waking up everyday thinking about Riverfront development. Mayor Purcell has allocated $8 million of budget moneys for the first year of the first phase of the Riverfront development. The Riverfront development was broken up into phases, and the first phase was like a five-year phase $40 million worth of development and the Mayor has already allocated the first $8 million. Do the math, $8 million for five years is $40 million and that is a significant step. That $8 million, it has not been decided just yet which of the elements that are designed for phase one will be taken on but there is like 20 different projects along the river that the master plan shows as the way to get started. That sets up the premise that you kind of gradually run up to the second phase where the new canal comes through and you make an island with tremendous amount of public and private dollars invested.

MK: Well, Gary thanks for taking a couple of seconds to talk with me. I appreciate it.

GE: Thank you.

(Music Up)

MK: Next up, I was able to grab Priscilla Carroll, who is the General Counsel for Struever Bros. Eccles & Rouse who’s been heading up the development for the Nashville Sounds site or the Thermal Plant site. Let’s get into our conversation with Priscilla.

(Music Out)

MK: You had a lot of good things to talk about with the redevelopment on the Riverfront. One of the things mentioned that you guys have spent a lot of work in Baltimore doing was the environmental concerns. Talk a bit about the environment concerns we’re looking at on our Riverfront and the work that’s being done to sort of help those issues?

PC: As far as I can see, the city is totally involved with cleaning up any environmental issues. When we first got involved - which is a great thing for a developer to have the city government willing to step up and work together. When we first got involved in Thermal Transfer, they said, “We will take responsibility for getting a no-further action letter.” Which was a major consideration and they have lived up to their word when additional issues were discovered at Thermal Transfer, which aren’t major by the way. You all are blessed here. It wasn’t like our chromium site on the downtown Baltimore waterfront, which was really pretty intense. So, the fact that you have a helpful, willing government, the fact that your environmental problems are not really huge and manageable, I think that it is not going to be a stumbling block toward development in Nashville at all.

MK: Yes, that’s great. You mentioned the three points, which I thought was really good to encapsulate, the density, diversity and determination of the city. Right, which you mentioned here, we’ve got the government, we’ve got the excitement, we’ve got the Brokerage houses here excited, Tower making these investments here. The talk is now retail is trying to follow those resonance, because resonance is happening. So, there’s a strong focus on the transportation, the walk-ability, the streetscapes. What do you see as a future of the parking and the walking and the streetscapes in that SoBro area specifically?

PC: Parking is an incredible issue wherever we develop because we just do urban development and Bill Struever doesn’t like cars. He would much rather have people walking and doing away with their cars and as you can see, we do things like we wrap garages so you don’t even see them. But at some point, density becomes such an issue with regard to parking and traffic that you can’t ignore it. As a matter of fact, in my neighborhood in Baltimore, I live in Canton which is the next neighborhood around the harbor from Fells Point that I pointed out on the slide. This week, the City Planning Department turned down a request by a developer to put in a high rise residential precisely because the neighborhood was up in arms about traffic. They said, “Boston Street is a great street, runs right along the water there but it’s already getting backed up and if you put in…” it was a 300-unit condo tower, “…our traffic is just going to get worse so, we can’t agree with that.” For the first time, really that I can recall, the City said it looks like there’s too much density.

So, at some point, parking and traffic becomes a density inhibitor and the only real issues to it are mass transportation. Last weekend in New York City visiting my daughter and I have to tell you every time I get on the subway there, I know it’s not beautiful. Oh, my goodness, it’s so convenient, I just love it. You just feel so clever that you can get from downtown to uptown in a matter of minutes and stay dry at the same time, which was an issue this weekend.

MK: Now, what other developments does Struever Bros. are involved in that SoBro area?

PC: We’re doing Rolling Mill Hill. We have three lots, Lot C1, F1 and J, up on Rolling Mill Hill and those are three that we’re working on right now. The J site is going to be first floor retail with 175 living units, either apartments or condos above it and we’d love to bring in - hopefully it’s there – a high end retailer to activate that corner and provide the services that I think you need.

Aside from the Thermal site which we’ve designed and ready to go except for like, I said, the hole in the doughnut and we’ve got to decide what to do there, we are looking at the other MDHA sites up on Rolling Mill Hill and waiting for them to come out on RFP. Since the moment Bill Struever put his foot in Nashville, he’s been looking at those car-barns because he just left…I don’t know if you’re coming to Baltimore with the group that’s coming up in May. Well, I hope that we’ll be able to get people out to see what he has done with kind of a midtown old dilapidated shopping center that he converted into this fabulous market concept. You take a strip shopping center, you could take the car barns, would be even cooler, and you put in markets within the larger. So, you have the best cheese guy, the best soup guy, the best meat guy and people can go around, do their shopping that way, have a wine bar at the end so that you can pick things up, take it to the wine bar and you have constant musical venues and stuff going on outside. We see the car barns as being idyllic for that and so that we have our eye on that. Hopefully, they’ll come out with that soon.

MK: Yes. A lot of talk within our brokers, they’re talking about the downtown retail is people in this area of Nashville, they want to drive in, do what they do in retail and get out. So, having parking available within a center, so these things you’re talking about are very popular, they’re really excited for those to happen.

PC: Yes, and I think people get… when they first brought Camden Yards…our baseball team was out at Memorial Stadium which was 33 blocks out and we had parking, you know, asphalt sea around it. Same as Titans Stadium and when they brought it downtown and put in very little parking, everybody went, “There’s going to be horrible traffic jams every game day.” You know, 40,000 some people and the amazing thing is there weren’t. There never were. Everybody parks in their building, where they have their offices and they’d walk to the game or they’d take the light rail. We do have a little train here that I’m sure they could utilize and it’s amazing how much people get used to that and nobody would think of having to drive to the game. If you’re working in downtown Baltimore, you just walk. It’s half a mile, it’s three-quarters of a mile, it’s pleasant. It activates the streets and it makes all the rest of that possible that you want, you know, the neighborhood thing possible.

MK: Well, we won’t get into all the transportation issues, I know there are a lot of them but thanks for joining me.

PC: Well, really nice to meet you. You’re very sweet.

(Music Up)

MK: Finally, I was able to grab John Pierce who is the Vice-President of Tower Investments. Tower has become very active in our community and we expect to see a lot more from them. Here’s my interview with John.

(Music Out)

MK: Now, Tower Investments notice Nashville just a little bit ago and just came in with a bang, buying stuff and retail, it’s very exciting. The main properties you talked about were…

JP: The arena property, just south of the Arena.

MK: Right. That’s obviously gotten a lot of the attention. Now, you talked a little about that site and sort of what’s happening now with that one.

JP: Well, it’s a great site. I mean, with what’s happening in SoBro, regardless of what goes there, it’s going to be a great location like Rick Bernhardt said there’s going to be so much development in the next ten years in SoBro. That being said, we’re working with the Music City Coalition to put the Convention Center there. We’re very supportive of that, we want to help where we can, we want to be involved in the private aspects of that, the liner buildings, the parking, the hotel and so on. So, that’s obviously a City decision and people beyond us but we will work where we can to help make the Convention Center go there and we have a great piece of property beyond that.

MK: Let’s back it up a little bit. What did Tower see in Nashville? Why here and what is the viability that you’re seeing happening in our marketplace that prompted you guys to come here?

JP: Well, you want a vibrant market that there are still some opportunities left and when we were here about four years ago when we first came into town. I mean, there’s been a lot happening in the last four years, we could see kind of the things that were coming, we could see the opportunities and we like the basis. I mean, it had the bones, it had the right things to build from. You had a very business-friendly climate, businesses were wanting to move to this location, the existing businesses here, like I said with health care, music, tourism, these are just strong business drivers that are going to continue to help this area grow. You could see companies that are already moving into Nashville from California and so on. So, I mean, that’s our job. We look for these opportunities, we can just see that in Nashville and that’s why we invested here.

MK: Well, that’s great. Let’s talk about some maybe future investment potentials you’re looking at. You have several sites down there that you guys have locked up and are working on. What else is Tower looking for, if not in downtown in the Nashville area?

JP: We are looking for opportunities. In particular, we want to look for development. We are looking for more in SoBro just because we look where we can add value. Again, we’re not passive, we’re not just land speculators. We want it through our efforts and working with local groups, partnering up with people that we can create value. Obviously, some of the things that we’re doing with our properties is that enhances the value of the adjacent properties. So, to the extent that there are additional opportunities for us in SoBro, in Nashville generally, we would be very interested in seeing those.

MK: On the Riverfront, I’ll just get your thoughts and opinions. Say, the Thermal Plant site, a lot of discussion on that, the Sounds are sort of the white elephant in the room. Nobody really wants to talk about it. What are Tower’s thoughts on that site and what you see best use, highest and best views for that site there?

JP: It’s a great piece of property. It’s right at the end of Gateway. Actually, if you take more of an overall view, you have the Convention Center at one side and then even going across the river, what they’re doing with the Riverfront concept plan? It’s a great piece of property. We are supportive of the idea of the baseball. So, I think that is a great use. I think that is something that we would like to see in downtown. If it ends up going to another location, we are still very supportive of it and want to help where we can. Beyond that, we kind of have to let the players that are working on it see what they can work out.

MK: Now, let’s talk retail, transportation and pedestrian-friendly streets. In SoBro, these are a lot of issues that really need to be taken care of. A little bit out from being happening and its development like yours that are really going to push those along. What are sort of the processes of moving those things through? Do we need the transportation infrastructure there? Do we need the rooftops coming in to pull the retailers in? What do you see the best way of that happening to redevelop that SoBro site?

JP: Retail is, I mean, it’s market-driven. I mean, you basically need the people that are going to buy the products, I mean, it’s that simple. So, you need rooftops, yes. You need traffic, you got to have the transportation in such a way that people can access it, they can see it. It really does boil down to just a lot of real basics. The other thing that the retail does though, right now you have the concentration on the residential development and the office development. As the retail grows there, I mean, as the residential grows and these people actually start occupying these units, now you have the need for the additional retail. You need just basic services. I’m living there, I got to have basic services, and I want close shopping. One aspect that really has not bend that even helps that further is there is also retail that’s driven through tourism and there’s retail that’s driven just regionally from a traffic standpoint. As you improve that transportation, being able to get on and off, and visibility and so on, as the tourism increases with a lot of what they’re doing on Broadway and in SoBro, certainly that’s going to drive the demand for retail. The retail in turn, will help the office and the residential and they help each other.

MK: Now, and Tower is in a lot of markets across the country and Rick had mentioned and there’s little talk about focusing on the local entrepreneurs and business owners to have those local Mom and Pops. Now, from Tower’s perspective, there certainly needs to be a good mix of the national chains along with the local retailers to sort of…I don’t know if the national change validate the area but it certainly spurs a growth they might have the investment dollars put into. What are some of your thoughts on that mix of local versus chain?

JP: I don’t think there is a magic number as far as what that ratio would be. There is certainly a demand for both, I mean, a need for both I should say. Certainly, there are benefits from a financing perspective also just from a traffic-generation’s perspective of those national retailers. You got to have them, you can’t ignore them and you want them. They really should, you want them because they help the other shops. Frankly, that’s why developers go for them because they help the other shops survive. Conversely, you don’t want to just dominate and that’s all you have. I mean, people want local restaurants, they want local shops. Again, I don’t know what the magic ratio is but there is certainly a need for both and you have to concentrate. Any successful developer in retail will draw a certain combination of the two.

MK: Thanks for taking the time.

JP: Thanks.

(Music Up)

MK: That does it for today’s podcast, thank you for taking the time to tune in. I want to thank all of you who have taken the time to go to the website and subscribed. As always, call our offices here at 615-850-2700 and feel free to ask for me or any of our brokers. You can email me at podcast@nainashville.com. Thanks again for tuning in. Please join us again next time for another Nashville Market Report.

(Music Up and Out)

On August 2nd, Nashville will have an election for a new Mayor of our city. In this podcast I interviewed Karl Dean to get his viewpoint on various real estate and development issues facing Nashville. Some topics covered are the convention center, the thermal plant site, transportation/parking, and green buildings. I asked each of the candidates the exact same questions as to assist you in making a better decision if you happen to be voting in Aug. If you’re not voting, each gives some good ideas for the future progress of our city that’s still worth giving a listen.

BM: ULI is not a trade organization. It?s not the trade organization of developers. It?s a research and educational organization which is really different.

(Music Up)

MK: This is the NAI Nashville Market Report for Friday, May 25th, 2007 and you just heard my guest from today?s program, Bert Mathews, who is the President of the Mathews Company. This is a podcast where we cover all the latest news and trends happening in the commercial real estate industry here in Nashville, Tennessee and beyond. If you have it already, please be sure to stop by our website at NashvilleMarketReport.com and subscribe to this podcast by clicking on one of the links in the right column there. You can receive it in iTunes, your RSS feed reader or receive daily e-mail updates on the latest news and happenings. Today, I’ve got Bert on the program with a very special guest interviewer, Richard Lawson, from the NashvillePost.com who sat down with Bert to talk about the recent formation of the District Council of the Urban Land Institute. I will then explain what that is. So, without further ado, let?s get right into the interview.

RL: Well, first off, let?s start with just describing what the Urban Land Institute is.

BM: I think the best way to describe the Urban Land Institute is to talk about its mission and its mission is to provide leadership and the responsible use of land and in creating and sustaining throbbing communities worldwide. It is a best practices research and educational organization with 37,000 members around the world and ranges from developers to architects, planners, contractors, engineers, lawyers, really runs the full gamut from a development standpoint.

RL: It?s kind of interesting that developers are involved with that organization.

BM: Well, everybody is trying or most everybody is trying to really do their best in the profession that they?re working with and gathering everybody together is a good way for folks to learn.

RL: Well, what?s the purpose of having a District Council?

BM: The District Council is a way for people in the Nashville, Tennessee region to be able to connect with ULI as opposed to one of the two annual conventions. And it?s at the District Council level that the organization is really growing. In the year 2000, there were 10,000 people who were at District Council events. In 2006, there were 50,000 people who were involved in District Council events, and I think that that is part of what…why the District Councils are formed, is to get people involved.

RL: Well, with the District Council, is the aim sort of to try and create better planning, for instance? Well, let’s take Cumberland Region Tomorrow, as an example, in terms of trying to preserve some open space, to create density nodes and all of that. How does that sort of interplay?

BM: Well, what?s really interesting is T.K. Davis and Bridget Jones are both on our Steering Committee or Executive Committee. T.K. with the Civic Design Center and Bridget with Cumberland Region Tomorrow, and it is a place of best practices. So, you can?t go any wrong what the best way is to work on planning in a rural community or in an urban community; and there are a variety of different programs which the National Organization of ULI has put together that allows you to actually work on Smart Growth issues. There?s a reality check, which talks about updating plans, a whole variety of different tools that ULI can provide.

RL: Well, part of the effort is to kind of…it seems to me…to kind of stem the tide of just sort of rampant suburbanism and you can’t…you’re trying to put in these mechanisms but you can?t quite move as fast as development can move.

BM: You know, it really is a little bit different from that and it really is an organization where people that do a lot of suburban development are a part of it. Art Fields who run Crescent Resources is on ULI?s National Board. There are a variety of homebuilders that are a part of the National Organization. So, it?s really about doing it the best way, the most responsible way, the most sustainable way, how to build a cul-de-sac, that’s to put it more firmly?

RL: Yes.

BM: But not, yes, it?s really how to do it well and, you know, people are going to choose to live in a variety of different places but we need to make sure that wherever those are done, they’re done the best that they can be. So, it might mean, make sure there are sidewalks, and utilities are done, buried right, sidewalks that they?re taking native plants, that they’re using the best storm water techniques, that run off. There?s just a whole lot of different ways to make things better and ULI and this District Council will hopefully gonna gather people together to discuss what are those best practices.

RL: Where does the Council Organization stand right now in Nashville?

BM: Where it stands right now is that we have had a organizing meeting. We have had a Young Leaders group meeting. If you’re under 35, or…they group together for just kind of a social event.

RL: Are you saying we’re old, Bert?

BM: I’m old. I’m 53 years old. I told them if they just reversed it, any of the the dyslexics said I’m really 35. But we have our inaugural kick-off event which is going to be Thursday, June 15th. It is, I think, it?s Thursday, but it’s June 15th and it starts at 7:30 in the morning. It is at the Symphony Hall, and Todd Mansfield is our speaker that day and that will be our inaugural kick- off.

RL: And Todd Mansfield is?

BM: Todd Mansfield is the incoming Head of the Urban Land Institute. So, having him being able to come and speak of his visions is gonna be great. But, Todd Mansfield is also the head of Crosland, Inc. and they have a variety of projects in the Nashville marketplace like Terrazzo, the condominium project that?s being built in The Gulch is a Crosland project.

RL: Some of the things that you guys deal with include market considerations, when you should stop building or slow building or maybe speed it up or look to more affordable housing or market-rate housing or some of those kind of issues that you guys talk about and deal with?

BM: Sure. One of the great things that ULI puts out on a national basis is a market report and I do that typically in October and it?s a review of interest rates, the financial market, how much money is out there available from a debt and equity standpoint and it also reviews a variety of information like office absorption, rental rates for apartments, all sorts of things like that and good knowledge is what makes these things work. It is a…if a developer builds a building into a market that don?t exist, that developer?s gonna suffer because of it.

RL: Either that or he’s going the build the market.

BM: Or, he?s gonna build to the market and as Bill Struever, I was on that Chamber inner city visit and Bill Struever was talking about all the different projects that he had built around the harbor and I said, ?How did you do that based on your downtown Baltimore?s demand?? And he said, ?We just did it and they came because we gave them a quality product.? So, that?s what a real developer does. He stuck his neck out and they now have Morgan Stanley and LaSalle and RTKL and all of variety of folks that have expanded in the marketplace because of what he was able to provide them.

RL: Yes. There, they have about $2 billion under plans, $2 billion in development to do.

BM: And we in Nashville, have got a tremendous amount that is either under construction downtown and in the suburbs in the planning stages. There?s just a tremendous amount of growth potential that?s there.

RL: As part of the Council, will you guys do any kind of brainstorming? Like look at, say the Riverfront Park…the Riverfront, where the sound,say, is supposed to go and kind of look at and say, ?Hey, let?s do that as a case study of what could done and what we think should be done? Will there be some policy statements that come out of that?

BM: You know my hope is that it will. I guess the simplest thing is…we gotta crawl before we walk and walk before we run but the Advisory Panels that ULI puts together are famous internationally for bringing experts together in a short amount of time to focus on a specific problem and give a city or a community their ideas of what may happen.

RL: Yes. One of the early meetings that I went to, they used…there was a case study…in Iowa, I think…talk a little bit about that.

BM: You know, I’m not sure about the one in Iowa but I was actually invited to one in…to study downtown Greenfield, South Carolina and they had people from California, Chicago, Nashville to look at downtown development - the tools that they needed, what were the impediments to the problems they were having and it has provided the foundation from which they are working on what was already a fairly successful downtown. But that?s an example of what they can do.

RL: Yes. I think the Iowa one was, somewhere in the Midwest, it was like an interstate town and they put all the roads the wrong way or had it planned all the wrong way and these experts all came in and said, ?No, no. You need to kind of do it this way and this way…? and now the town is thriving as a result of it.

BM: One of the things they spent a lot of time with over the last couple of years has been New
Orleans, the impact of Katrina and they presented a variety of different plans specifically for that region. Oh, in that case, you’re gonna rebuild the city. Design a city both all the way from the buildings to the infrastructure to the social aspect of it, too. ULI was called to be a part of that and I think they might have spent as much as $1 million on that. I?d have to go back and take a look at it but they?ve really spent some emphasis there. And what?s gonna be really great about this event that we have coming up is Mansfield, who is the incoming head of the worldwide organization of ULI, who?s gonna come to our inagural event but to speak about what his plans are for the next year as well as his…what his company is doing in the Nashville market and what he sees are the development trends throughout the South. So, it should be fascinating.

RL: After you do the organization meeting, then what happens?

BM: We?re really planning on going in full ball. We?re working on a full schedule for all of 2007 and 2008 where we have speakers that come in like Todd to talk to the folks that are members of ULI and the folks that are interested in joining about what are the best development trends.

RL: What prompted you to move forward with this? You’re the key person in starting this effort.

BM: Well, I?ll tell you, not…not really. T.K. Davis and Hunter Gee grabbed me and said, ?Hey, let?s talk about forming a ULI chapter here. And I thought, you know, ?Just another organization? and then, the more that I thought about it, the more we talked, the more the105 members that are already in Nashville decided to gather, we realized that this type of community of experts wouldn?t be in…delivered any place else in any other organization that?s out there.

RL: Now, this isn?t just in Nashville. This will include Franklin, Murfreesboro.

BM: This is the middle Tennessee.

RL: Sumner County.

BM: Correct, and there?s an organization in Memphis, there?s a ULI chapter in Atlanta, in fact one of the first ones was in Atlanta but this will be for the middle Tennessee area.

RL: Well, Bert, thanks for doing the interview, chatting with me about this. Hopefully, this will
be an influential organization.

BM: Richard, thank you, and I hope to see you there 7:30 on June 15th at the Symphony Hall.

RL: I think I can wake up that early.

(music out)

MK: Thank you, Bert and Richard, it?s great info and we look forward to seeing what this organization is gonna do in the future. As anybody who is familiar with Nashville knows, we?re a very thriving and growing marketplace and the Urban Land Institute is gonna be a great addition to the development and planning community. For more information on Richard Lawson and the Nashville Post, visit NashvillePost.com or you can just stop by the Urban Land Institute site at ULI.org. And as always, you can reach us here at our office by calling 615-850-700 or drop me an e-mail at podcast@NAINashville.com. Be sure to visit the website at NashvilleMarketReport.com and subscribe by e-mail for everyday, you?ll get updates from the commercial real estate happenings in our marketplace here in Nashville and middle Tennessee. That?s it for today?s podcast. Thanks for listening and be sure to tune in again later for another NAI Nashville market report.

(Music up and out)

On Thursday, April 19th the Nashville Business Journal held an event billed as a, “fast-paced panel discussion on growth in the SoBro area — one of the hottest areas of development in Nashville!”

It was a great turn out to the event, about 250 people showed up to talk about current and future plans for the area south of Broadway in downtown Nashville. After the event, I was able to grab some of the panelists to talk about their thoughts on these happenings. They included:

• Gary Everton, Principal of Everton Oglesby Architects
• Priscilla K. Carroll, General Counsel for Struever Bros. Eccles & Rouse
• John Pierce, Vice President of Tower Investments

Music Up 

MK:  Welcome to the NAI

Music out 

SZ:  I’m Shirley Zeitlin.  I started in real estate as an affiliate broker in 1967 and worked as an agent for twelve years and then I started this company, Shirley Zeitlin & Company Realtors in 1979 so we are starting our 28^th year in the business.  I was born in

MK:  What prompted you to make the move into the downtown marketplace with your new division Zeitlin InTown? 

SZ: 

MK:  So in terms of that outward growth, is there a particular direction that you’re seeing it happen? 

SZ:  Well, South is popular, if you go as far as Dickson there’s a lot of development. 

MK:  Are those who are “flipping properties” in this marketplace creating an unrepresentative pricing level? 

SZ:  Well I think that if you look at the prices that are on the market in my opinion they’re somewhat inflated.  And as it relates to your question about people buying units that they think they can flip right after they’re completed.  That’s happening with the Viridian.  There are a lot of people living in the Viridian and I’ve talked to some who are enjoying it very much.  But there are also a number of investors due to the price point of that that anticipated doing just what you suggest which is to buy the property and flip it.  Consequently there are quite a few units on the market and there on considerably more than what the people paid for them because this was the object of their purchase.  So, I think the next few months will better answer that question as to what the marketplace will do.  My suspicion is that when you buy a property and try to sell it as soon as it’s completed even if you bought it at pre-construction prices there’s just so much leeway there for profitability and if you’re unrealistic in what your expectations are then there can be some disappointment.    MK:  You mentioned earlier a project by Tony Giarratana, the Signature

SZ:  Well I admire Tony.  We’ve been good friends for many years and I think he does a great job with what he does.  He a consummate developer in terms of his expertise and understanding the market and the marketing that he does and anytime there’s an opportunity certainly I’d be happy to work with Tony on other projects.  Right now we’re focusing on the Belle Meade Court.  There’s a lot of interest just from a teaser article that was in the paper and we think that’s going to be a really, really, really popular project for people who want to live there.  I would say that you’re not going to see a lot of investors in that property.  You’re going to see people who want to be in that Belle Meade area.  I think one of the appealing things about it is that you’re going to be in a pedestrian area right there where the grocery’s going and a bank and restaurants and things on the other side of that property where the Belle Meade Theatre property was.  And so it’d be kind of fun to live not all the way downtown and yet be able to enjoy an urban lifestyle in the suburbs so we think that’s going to offer yet another option. 

MK:  So last question.  What’s in the pipeline for you?  What can we expect to see from you in the near future? 

SZ: Well, we’re really focusing on this Zeitlin InTown.  We’re talking to a number of several developers about some new projects through our new construction department.  You know our corporate culture is really built around our people and our goal has always been to be a leader in the industry.  With the quality people that we have and the resources to stay on the cutting edge of the industry and what’s happening in

MK:  Okay – thank you so much for talking with me today Shirley.   

SZ:  My pleasure. 

Music up 

MK: And thank all of you for tuning in today.  Please be sure to stop by our website at www.nashvillemarketreport.com where I have show notes and within a few days I’ll also have a transcript of this interview.  In the past I’ve had a lot of requests for these and I’ve now got those transcripts linked underneath the show notes of each show.  Please feel free to call our offices at 615-850-2700 or drop me an email at podcast@nainashville.com  and I’ll be sure to answer any questions I can for you.  Well that’s it for today’s episode of the Nashville Market Report.  Please stay tuned in the future for more insights on the Nashville commercial real estate market. 

Music out

Shirley Zeitlin, the founder of Shirley Zeitlin & Company Realtors, discusses with us her new division of her company, Zeitlin InTown, which is focusing on the urban lifestyle of downtown Nashville. Mrs. Zeitlin gives us some good insights into some of the trends in this growing housing market. She also discusses the Belle Meade Court, a new development with Tony Giarratana, that her company is the exclusive agent for.

BB:  I think we want to be really careful to make sure that all the future projects that are being developed in the downtown area are done in a real sustainable, quality way so that it has lasting impact for years to come.

(Music up)

MK:  Welcome to the NAI Nashville market report for Friday, November the 17th 2006.  I’m Marc Krejci, the director of market research here at NAI.  This is a biweekly podcast where we’ll cover the latest news and trends, offer some tips and insights as well as speak with professionals regarding the commercial real estate industry here in Nashville and beyond.  On today’s program we have Bill Barkley, the president of Crosland’s Tennessee division.  He will discuss the growing trend of green buildings and will also cover some details on what’s going on in the gulch.  Also, Max Smith will give some tips on how to handle environmentally challenged properties.  For show notes and more information about the topics covered in this program please visit our website at www.nashvillemarketreport.com or you can drop me an email at podcast@nainashville.com or call me or any of our brokers at 615-850-2700.  But first, here’s some news headlines.  Probably the most discussed news item this last week was the Westin Hotel proposal.  Metro Planning Commission signed off on the proposal late Tuesday night with a vote of eight to two.  They did however ask the façade of the building be redesigned to fit with the historic look of the neighboring buildings.  The height be lowered and that the affordable housing units stay affordable.  The proposal now moves on to the Metro Council which will make sure that the changes are implemented.  Here to discuss why we’re seeing this interest in the downtown hospitality industry is John Gifford.

JG: Historically Nashville’s vacancy rate was okay but it wasn’t great and all the sudden we’ve really had a real burst of hotels.  There’s been a shortage of really good quality hotels.  What we’re seeing is the fruits of a Mayor who’s focus for the last eight years has been on neighborhoods and new urbanism and walkable.  And what we’re starting to see is that the city has bought into that concept.

MK:  In other downtown news Mad Mod, a modern furnishing and home décor company who targets urbanites, has located in the Burger Building on 8th Avenue formerly the Toy Museum.  This news is important because it’s retail not geared towards tourists and supports the growing crowd of downtown residents.  Here’s Sohaila Willis.

SW:  All of this is the new Nashville.  It means downtown Nashville is becoming more of a diverse town as far as residential and retail and business.  It will be an added benefit to the residents of Nashville that is growing as far as lofts and condos.  This is a positive step towards the growth that is happening and will continue to.

MK:  When a commercial building is sold with no tenant, the purchase price can only be assumed on what the negotiated lease would be.  But what happens if before closing a tenant is found for the property?  Recently Jerry Miele sold a property to a St. Louis investor on Corporate Place Drive where this exact scenario took place.

JM: The investors assumed that the building would be worth a whole lot more in a lease value than what was eventually agreed upon so we had to do some last minute negotiations because not only did the tenant MacPac Services need to move in on November 1 that meant that the building had to close a month earlier and everyone had to scramble to get the thing done and we had to come to an agreement on the new purchase price.

(Music up)

MK:  Okay.  That does it for our Market News update for today.  Next up is our Inside Report where Max Smith will talk about what options buyers have when they find themselves in an environmentally distressed property.  In this section of the podcast we’d like to give you some helpful tips, tricks and insights in how to better manage your commercial properties and commercial transactions.  Here is Max Smith.

(Music out)

MS:  Lenders insist on phase one environmental inspections because, in the event of foreclosure, they do not want to be stuck with a tainted property.  Banks and institutional lenders are considered by the public to have deep pockets.  That is plenty of money and are so vulnerable to lawsuits.  To protect themselves from the cost of cleaning up environmentally unsound property and the potential lawsuits resulting from the infraction lenders take care to ensure that properties of which they grant loans are safe from this risk.  No lender will loan money on an environmentally compromised property so the buyer can do one of the following three things.  One, convince the seller to agree to the problems before closing.  This will have to be done by a licensed environmental specialist and will be subject to inspection.  Two, negotiate with the seller for a reduction in price commiserate with the cost of correcting the problem.  If lenders refuse to grant a loan to the buyer, the seller may have to agree to finance the buyer or three, back out of the deal and have the escrow money returned.

(Music up)

MK:  Thank you Max for the great insights. For our feature presentation today we have Bill Barkley, who’s the president of the TN division of Crosland.  Bill has more that 20 years of experience in all areas of commercial real estate and has developed more that one million square feet of class A office, retail and residential projects.  Bill has been a longtime advocate of historic preservation in Williamson County.  Bill serves on the board of directors of the Heritage Foundation of Williamson County and the Carnton Foundation.  So, without further adieu let’s get into it.

(Music out)

MK:  Bill, to start off tell me a little bit about your history with Armistead/Barkley and what you guys focused on over there.

BB:  We started it about 13 years ago.  We really kind of started off doing things contradictory to what was going on in the market at the time.  That was philosophy that I had is that we need to be sort of running counter-intuitive.  We were doing office development when everyone else said no more office development could be done.  We were doing that on Music Row and we sort of specialized for a long time on Music Row with music labels, publishing companies and we had a lot of music row clients we acted as consultants in as developers in projects over there.  And then from there we started looking at some buildings that people were sort of abandoned like the old Nashville Gas buildings and those that people hadn’t paid any attention to in a while and were afraid of because they had asbestos or some other environmental issues and we were able to redevelop those and do real well with those.

MK:  The other night I was at the Westin community meeting at the Schermerhorn and it was a very heated conversation between the development community and the preservation society.  Talk for a bit about the contrast between these two entities.

BB:  I think that the development community would be well served on that issue to come down on the side of preservation because to me it’s the goose that laid the golden egg.  The thing that distinguishes Nashville from any other city are those very – those things.  That’s the fabric of our community.  You gotta embrace the history and when I look out on Nashville there are a lot of vacant parking lots or we’ve already destroyed a lot of historic buildings.  In order to insure - to enhance our future, you know just from a very self-motivated standpoint if you’re a developer, you really want to preserve those things.  That’s the position I think is the best way to go.

MK:  We understand green buildings to mean environmentally friendly.  Is there a more precise definition of green buildings in today’s marketplace?

BB:  Green buildings has become a pretty broad term and a lot of people are trying to grab on to that as a term of art…to enhance the image of their development but I think really what we need to pay attention to I think is managed without distance itself from other organizations [DCT1] is basically the US Green Building Council and their sanction of LEED certification.  If you can be certified for LEEDs then that means you’ve gone through a pretty rigorous test and it’s been reviewed and it’s been certified as a LEEDs program and the consumer or the person who’s buying that product or real estate that’s leasing from your building will know that those improvements have actually been made and the building really is a quote green building.

MK:  What are some of the things the US Green Building Council looks at in order to make a building LEED certified?

BB:  It starts with really the construction process.  It turns out that about 25 to 40% of our waste in this country is generated from demolition and from construction wastes.  The other things that make it LEED certified is to make sure you have plenty of glass, we have extra tall floors, we allow daylighting into the interior spaces, the type of energy systems that you install in your building – you wanna be as innovative as possible and you get some points for that.  You want to make sure you’re not putting, uh using potable water for irrigation – there are ways to do that through capturing rainwater with cisterns and using that system or least minimizing it with soaking hoses and planting materials that don’t require as much water, using bamboo flooring, using Energy Star rated appliances, dual flush toilets, all types of materials that can be utilized in the building.  There’s a lot or research lately that indicates that for health reasons we need to be paying more attention to this.  They’re discovering that asthma and some of the other respiratory problems that people have may be because of the adhesives and the glues and the chemicals that are in carpets and paints  and so we’re using low VOC materials to reduce that and paying more attention to the air quality of the buildings.  And we think that’s actually, that’s something that people will be paying more attention to in the future as they become more educated and understand that that will have a big impact on their own health.

MK:  In terms of a LEED certification, how accurate is a point based system that only requires 26 of 69 points total as the minimum?

BB:  The way we approached it wasn’t from the standpoint of let’s get 26 out of 69.  It was here are the things we’re going to do in our building.  Let’s go back and see how many points we’re going to get for that.  And had we not had enough points then we would have gone back and looked at some other things that we could done and still continue to do that you know as the process continues we’ll be doing that.  It’s evolving and there are new materials that are coming out everyday, new techniques ‘cause the whole idea really ultimately it’s not just about going down a little checklist, it’s about reducing the environmental footprint, the impact on our environment and being more responsible of that.

MK:  Since building green buildings is relatively new and construction companies and manufacturers and distributors have not fully adopted this into their workload yet, how does that affect the cost basis of these building projects?

BB:  That’s a really good question; a really good point.  Because there’s a lot of misinformation out there that I’ve personally discovered that there’s a lot of misinformation because I heard all kinds of things about the costs and how difficult it was and when we really got into it I think that some of that is old information, it’s a couple of years ago some of that was true.  But it’s amazing how quickly the world is catching on and America’s catching on and manufacturers are catching on with creating new products that adhere to these new kinds of green policies and green consciousness and so we’re always looking at the most innovative kind of mechanical systems that we can use for our buildings – you know within reason they have to be cost effective but we’re always researching that and making sure that we’re building buildings for the future and not building buildings that you know, we’ll regret and that other people who buy condominiums from us for instance will regret that they’ve bought one and realize it’s not very marketable because it’s not, it doesn’t have the most current, efficient systems.

MK:  Well, since it would only be a one or one and a half per cent cost increase why would somebody not make their building a green building?

BB:  I think you’re seeing that change.  If you really, if you pick up the paper you’re seeing more and more that people are, as you say, they’re either using the term green, they are making an effort to be more green, whether they’re going for a LEED certification or not.  So at least there’s -  there’s this consciousness that’s been – that’s being raised and it’s a growing consciousness and I think it’s a rapidly growing consciousness.  So I think that the rumors or excuses for not going being LEED certified or having a green building are people realizing that they’re fairly unfounded, that there are ways to do this and reduce the environmental impact without materially increasing the cost of the project.  And I just think it’s the public becoming more educated and I think that’s happening rapidly.

MK:  Before we met today I looked it up and there are now nine other buildings in Nashville that are under construction and expected to be LEED certified upon completion.

BB:  That’s pretty phenomenal because when we announced our project we were probably the only ones in town.  But you’re right.  You’re starting to see this become a bigger issue with people.  At first we were maybe a little behind the curve than some of the other parts of the country but, you know Nashville’s a really high profile city now and people are realizing that and they’re realizing that their customer base, their clients are more sophisticated and they really want these kinds of things in their buildings.

MK:  Are green buildings easier to market to buyers and sellers and do they fetch a higher price?

BB:  I don’t know that we’re at a point where you necessarily can get a higher price but it does make your building more marketable and it does a couple of things.  One is that people realize that if they buy a building that’s LEED certified then it’s gonna be more efficient than the average building.  It’s gonna be much more efficient.  In fact our engineers are telling us that we’re going to be able to reduce our energy cost to 30 to 40% compared to the average building that’s being built in Nashville.  I think the added value there is that you know that you’re buying a 21st century condo that has all the attributes that we know of today.  I think so – really what I’m saying is I think we’re passing the value on to the consumer.

MK:  Let’s talk briefly about the Terrazzo project that you’re working on.  What is the timeline and the marketing strategy that you’re putting in place on that building?

BB:  We opened our sales center in June and we’re pre-selling the units and we’re going to start construction the first of the year.  It’s a truly integrated mixed use building.  The first floor is 22 feet tall and it will have retail tenants on the first level – 20,000 square feet of retail.  And then the next three and we’re thinking of adding another floor because the office has been so in high demand that we are thinking of adding another floor of office but right now we have about 80,000 square feet of office space on three floors and we may go to four floors.  Then above the commercial office space we’ve got another 10 floors of condominiums.  And those condominiums are really high quality.  Obviously these are smaller than typical homes but the designs are real open and spacious and because of the daylighting I mentioned earlier and the height of the ceilings it has the feeling of spaciousness.

MK:  Let’s go back to the days when the Gulch was just an idea on a cocktail napkin.  What was it that you saw in the Gulch that other developers there in the area did not see?

BB:  I traveled quite a bit.  I really observed a lot of things and try to observe things and I saw those cites start to take their areas and their neighborhoods and do new urban mixed use development as opposed to the suburban thing that was going on.  I saw these cities embracing it and I saw it really being accepted in a big way and being very successful.  And I realized why not Nashville?  Nashville doesn’t have that at all.  To me the thing that was missing is we didn’t have a place, an urban area where people could shop and people could work and people could live and I’ve seen that in other cities and I felt like Nashville could accept that.   It was the fact that we had city government, we had private investors, Steve Turner, we had planners and architects and all of us here just embraced it and stuck with the plan and the vision and we knew we were doing it right.  It had to succeed when you look at other cities that were of similar size, similar demographics.  Nashville couldn’t be that much different.  You know we had to – it had to accept it at some point.  But if you do it right and you build in great urban neighborhoods there’s a whole lot of freedom involved in just being able to go down to the street, walk to all the things that you need to get your services taken care of and you have entertainment there available to you.  It sounds a little idealistic but I think as we build better urban communities that’s really where people want to be.

(Music up)

MK:  Okay.  That was our podcast for today.  Thank you for taking the time to listen in.  If you haven’t already be sure to go to our website www.nashvillemarketreport.com and subscribe to this podcast to have shows automatically delivered to your computer.  On this site you’ll also find show notes, more market news and a calendar of upcoming events relating to commercial market place.  Feel free to call any of our brokers here at the office by dialing 615-850-2700 or send us your feedback about the program at podcast@nainashville.com.  Please be sure to join us again next time for another Nashville Market Report.

(Music out)

RS: When you’re talking about a global economy and you’re talking about the capacity of the whole economy around the world to function almost anywhere we are competing with international cities now to be a center of economic influence.

(Music Up)

MK: Welcome to the NAI Nashville Marketplace report for Friday, December the 15^th, 2006. I’m Marc Krejci the director of market research here at NAI. This is a biweekly podcast where we will cover the latest news and trends, office tips and insights as well as speak with professionals regarding the commercial real estate industry here in Nashville and beyond. We’ve got a very exciting podcast for you today. On today’s program we’re speaking with Ralph Schulz who was just recently named the new president and CEO of the Nashville Area Chamber of Commerce. We’ll discuss many various issues; he’ll be focusing on his new position. Also, we have a real special treat for you today on our Inside Report. We’ve partnered with Peter Pike at PikeNet to bring us this feature that Carnell Scruggs will report on. Finally, at the end of today’s podcast I’ll announce the winner of the iPod shuffle discussed in the previous episodes. For show notes and more information about the topics covered in this program please visit our website at www.nashvillemarketreport.com. You can also drop me an email at podcast@nainashville.com or call me or any of our brokers here at 615-850-2700. But first, here are some local news headlines.

(Music out)

MK: Getting a lot of headlines over the last several years, the Nashville Sounds ballpark proposal has yet another hurdle to cross. Next Tuesday December the 19^th, the developer of the stadium is asking Metro Council to push the closing deadline from December 31^st to April 15^th and that’ll be the first government hurdle that they’ll need to pass to get an extension for their development agreement. Here is Burt Matthews.

BM: That 90 day extension is something that I believe will be granted by the Metro Council because the city doesn’t want to see themselves as being obstructionist or standing in the way of a project like this happening. Whether or when it gets built is really going to be determined by the market. You know that they started out with 700 condominiums and have cut it back now to 200 condominiums, but they have 2 hotels, an office building and apartments so finding that appropriate mix and what the market in Nashville Tennessee is going to demand and is willing to pay for is ultimately going to determine the success of the Sounds Ballpark.

MK: Recently, Dallas investors bought Nashville’s very first shopping mall built in 1967 – the 100 Oaks Shopping Center. They paid 49.2 million dollars for their purchase according to a deed filed Thursday with the city. The investors spent about $58 a square foot for the 850,000 square foot retail center and plan to revitalize the building with a new façade and by converting much of the empty retail space on the second floor to offices. Here to talk about the significance of this redevelopment is Lacy Hogan.

LH: Berry Hill over there is a trendy, more eclectic type area. With that being remodeled and revamped with new tenants coming in and I think is just going to improve the area a ton. Cause you’re located right there by the interstate so it’s great access to the airport, to downtown Nashville and you know to Cool Springs, to Brentwood, to all the main arteries of Nashville. They’re doing that in Belle Meade too where that old theatre used to be they’re remodeling that. So when you’ve got great area I think it’s the thing to do because there’s not much more land by the interstates right here by Nashville.

MK: At 633,000 square feet the tallest building in the state of Tennessee, formally known as the BellSouth building and informally known as the Batman building, has recently been put up for sale by a New York private equity firm. The building is currently housing BellSouth and Nissan North America until their corporate headquarters is completed in Cool Springs in 2008. Three major downtown office buildings have been sold since last summer - One Nashville Place, the SunTrust Bank building and the L&C Tower. Fifth Third Center is also expected to be sold very soon. Here to comment on why we’re seeing this kind of activity in our marketplace now is Cheri Thomas.

CT: If you look at what’s happening overall in the top tier investment community right now is that funds, rates, large owners are all seeing a value in putting their portfolios in the market. There’s ready money out there to buy large portfolios at a premium. If the lease is indeed united with the real estate I would expect the BellSouth Tower to sell for anywhere between 100 and 125 million.

(Music up)

MK: Thank you Cheri. That could certainly be a great Christmas present under someone’s tree this year. So that does it for our Market News Update for today. Next up is our Inside Report. I’m proud to announce to you a very special alliance we’ve created with Peter Pike of PikeNet. Carnell Scruggs will bring us this report today commenting on quickly changing global trends in commercial real estate. You can find more insights from Peter on his website at pikenet.com and a link to his dispatch on our website.

(Music out)

MK: Here’s Carnell.
CS: How international is the real estate profession? Here’s a fascinating factor. In 2005 38% of all new CCIM designees, those achieving CCIM designations, practiced outside the United States. China alone now has 240 local CCIM members. Shanghai China and Moscow Russia offer CCIM courses. These courses are taught in English with simultaneous translation. So CCIM members worldwide study the same curriculum. Of course, that leads to the question is anybody in Shanghai doing a market study to assess the demand for office space? This past April, the Olympian out of Olympia Washington, quotes one economic expert saying that fully a quarter of the world’s construction cranes are in Shanghai. There’s a huge need for companies all across China to have a presence in a gateway city like Shanghai. For the next few years China’s attitude will be if we build it they will come. Which is totally different from the United States.

(Music up)

MK: China certainly has been an interesting development to watch. We certainly do have to remember that their office market is not quite as mature. It’s only been around for about 20 years. So thank you Carnell; we appreciate the great insights. And another thanks to Peter Pike at PikeNet. Again you can access more insights from Peter at his website at www.pikenet.com and our link to this article in our show notes. And now for our feature presentation today we have Ralph Schulz who was just recently tapped for president and CEO of the Nashville Area Chamber of Commerce. His selection ended a 3 month search that attracted 70 applicants from across the nation. Schulz has served as president and chief executive of Nashville based Adventure Science Center since ’99 and prior to that he served as corporate vice president of marketing and development at the National Federation of Independent Business. So without further adieu let’s get into the interview.

(Music out)

MK: So first off, thank you for joining us today Ralph.

RS: Oh glad to do it.

MK: Tell us a little bit about your background before the Chamber and the Adventure Science Center.

RS: Probably one of my most relevant experiences with regards to the Chamber was the four years I spent at the National Federation of Independent Business which is an organization devoted to small business and small business development. Small business to me has always been a special niche because I’m so drawn to the entrepreneurship and the risk taking and the fact that I really think, I mean statistics show that a large portion of the US economy – the worldwide economy really – is in those smaller businesses that grow and that people take risks in. But I’m also drawn to that personal quality of those entrepreneurs and leaders that are just compelled to go out there and make their create new businesses, build their businesses, provide employment for people and because of all that I wanted to be involved with small business. So I did. I was involved with NFIB for four years both in Washington and in the business side of the association.

MK: In 1999 you came onboard at the Adventure Science Center with only about seventeen board members losing roughly $600,000 a year with membership declining. You were able to bring that organization back to a balanced budget, reenergize the board, change the name and created multiple new exhibits including a 20 million dollar new planetarium. Talk a bit about this experience and how it prepared you for your new position with the Chamber.

RS: The first thing we had to do was we had to establish to the community that the place had value and that it could deliver on its promises. If you look at it from a business investment perspective in the opening stages we needed the help of risk taking supporters. Once we had that and the value of the location continued to build then the customers started to come back. One of the things that made me want to stay in Nashville was that I realized that Nashville’s a giving community. It is a community that takes its responsibility to grow the community very, very seriously. And when given a plan for that development, will support that plan and invest it. You have to have strong board leadership, strategic vision to pull it off. When you have those components the community jumps right in. So that lesson was very important as I come to the Chamber because we’ll have to create that same atmosphere at the Chamber.

MK: According to the American Chamber of Commerce executives the average Chamber with more than one million dollars in annual dues revenue saw a decline in member counts from 2002 to 2005. Has this been true for Nashville and what are some of the efforts that you are spearheading in terms of membership that the Chamber is going to take on in order to turn this around for our city?

RS: Well there’s no question that the chamber membership has declined in Nashville over the last several years. What we have to do is we have to package the opportunity to be involved with the Chamber in such a way that it meets the needs of those small business and medium size business members. The Chamber is a gathering place for all size businesses. Larger businesses have a different opportunity to be involved. Smaller businesses have to have that repackaging opportunity. It’s just a question of making it available in bites that they can chew. As a Chamber we want those small businesses to see us as an organization that helps their business grow. We do that two ways. One we provide direct benefit to them. They have the opportunity to network. They have the opportunity to participate in our educational programs that help them gain more knowledge about their businesses. The second way that we can help them do that is by creating the opportunity for them to have exposure throughout the community. So those are all the things we have to seek to do for those small businesses.

MK: Ron Samuels who led the search committee that hired you said that one of the issues that the Chamber just hasn’t addressed very well is this; is what we’re talking about is small business. I know that you had a stint with the National Federation of Independent Business and in 2001 you received the Marvin Runyon Leadership Award for non-profit turnaround. You have to care very much about both of these aspects; small business and not for profit. Compare the differences working with these two different entities and maybe talk about some initiatives that you’re taking with them.

RS: The only real difference between a non-profit and a profit making organization is how you get your capital to build your business. In all other ways the operations of that organization like the Adventure Science Center was like a small business. So, when we undertook to turn that operation around a lot of the things we did is what any small business owner would do to their business when they need to kick their business activity into a higher gear. And the great thing about the Science Center was there’s tangible product to offer. So many of the things I’ve done in the past is more of a service oriented product. Here’s a product people can see, feel and touch. The same is the case I think with the Chamber. We’ve got to create the opportunity for those people to see, feel and touch our product. Our product are those educational programs. Our product are the influence that we can provide over policy making and so forth and so on. Our product is the opportunity to promote those businesses. And so all of those things we’ve gotta create a tangibility so that people can see ‘em, feel ‘em and touch ‘em.

MK: This past year Nashville had a very public victory in corporate relocation with Nissan moving their North American headquarters here to Nashville. This upcoming April the Chamber is sending a group of area business leaders headed by Mayor Bill Purcell to China to promote Nashville as a partner in trade and investment. What are some other initiatives that we can expect to see in the next couple of years in terms of expansion and relocation to Middle Tennessee?

RS: Everybody knows China is a great economic center with lots of potential. Well Nashville should participate in that. Partnership 2010 is now gonna take some steps with the Mayor to step over into China. There are a fair number of Nashville businesses already doing business with China. This is an opportunity for us to broaden the opportunity to other players that would like to participate and sort of act as the doorway by which Nashville businesses can go through to become a part of China’s economic development. That’s obviously going to help us here. It’s going to stimulate business activity in Nashville and help make us the international center that we already are but it’s going to increase it. When you look at the healthcare industry, when you look at the music industry, when you look at our education industry based in Nashville all three of those components are major players on an international level. This seeks to extend that same opportunity into China.

MK: In a previous podcast I talked with Tom Turner of the Nashville Downtown Partnership and we talked a little bit about peer cities. How does Nashville fare compared to other peer cities and in what ways do we stand apart?

RS: First of all I would say that our peer cities are no longer just similar cities of size in this region or even in the United States. When you’re talking about a global economy and you’re talking about the capacity of the whole economy around the world to function almost anywhere we are competing with international cities now to be a center of economic influence. So I think Nashville competes well. Obviously we’re a lower cost operating city. The lack of an income tax in the state of Tennessee is an attractive feature to incoming companies. One of the great things about the music business is that it stimulates a creative ambiance in this community that becomes very attractive to people who want their businesses to grow. So when I compare us to the peer cities I say Nashville has an awful lot of advantages.

MK: So let’s talk a little bit about those windows into our city. Having been involved in splitting the Nashville Convention and Visitor’s Bureau from the Chamber and now being the chairman of the Music City Center Committee for relocating our convention center to Sobro talk a bit about the importance of having a new convention center and the economic impact it would have on downtown and greater Nashville.

RS: First of all let’s talk about the current convention center. When that center was built in 1987 we could sell to 50% of the convention and meeting market. Because of the size of that market we can now only sell to 20%. The facility that we’ve proposed will allow us to sell to 70% of the marketplace. Successfully selling to that 70% is gonna generate a million new visitors to Nashville. So it’s a great welcome mat, it’s a great business card for Nashville to expand not only the people who visit here but also the people who want to do business in this community. Lots of Nashvillians leave Nashville to go to conventions in other cities. When they go to those cities they pay taxes that fund those other cities convention facilities. All we’re doing is capturing money from visitors to this city and using it to stimulate economic growth in Nashville.

(Music up)

MK: Okay, that was our podcast for today. Thank you so much Ralph for taking the time to join us. And thank all of you who have decided to tune in and listen. Now to the moment you’ve been waiting for - the winner of the iPod shuffle contest that we discussed during our last episode. The winner is Dan Shaw with the Dream Row Media Group. And thank you to everyone who participated in the contest. Dan flattered us with his message saying that this podcast is now part of their weekly meetings and is required listening for their staff.
That’s certainly quite the compliment Dan and thank you again for that. If you would also like to send me your feedback about the show or recommend a future guest, please stop by our website at www.nashvillemarketreport.com or you can comment on the show, my show notes and subscribe to this podcast to have shows automatically delivered to your computer. On this site you’ll also find more market news that I tag daily and delicious and a calendar of commercial related upcoming events. Please feel free to call me or any of our brokers here by dialing 615-850-2700 or email me at podcast@nainashville.com. So that’s it for today. Please be sure to join us again next time for another Nashville Market Report where we’ll do a wrap up form of the year 2006 and share our forecast with you for 2007.

(Music up and out)

(Music Up)

MK: Welcome to the NAI Nashville Market Report for Friday, November the 7^th, 2006. I’m Marc Krejci the director of market research here at NAI. This is a biweekly podcast where we’ll cover the latest news and trends, offer some tips and insights as well as speak with professionals regarding the commercial real estate industry here in Nashville and beyond. On today’s program we have Tom Turner the executive director of the Nashville Downtown Partnership. He’ll discuss many topics relating to downtown Nashville and what it means for our marketplace. Also, Cheri Thomas will give us some insights on successfully closing an investment deal and some pitfalls to avoid. For show notes and more information about the topics covered in this program please visit our website at www.nashvillemarketreport.com. You can also drop me an email at podcast@nainashville.com or call us at 615-850-2700. But first, here’s some news headlines.

(Music out)

MK: In industrial news the Des Moines Iowa based Principal Real Estate Investors has purchased three class A industrial buildings in Nashville for sixty-seven million dollars. Total square footage of all three comes to about 1.5 million square feet. Local brokers have described the buildings as being among the best industrial properties in the area. They also say that the deal shows that institutional investors are becoming more interested in Nashville’s shipping centers. Here to comment is Rusty Longhurst.

RL: What it tells me is that there’s always a new higher number that those that have been in the business for twenty years don’t think you’ll see but you end up seeing. That there’s more money chasing opportunities than there are opportunities so we continue to get higher prices. I think also what’s being affected; people have confidence that the interest rates are going to stay fairly flat so cap rates are reaching new lows everyday where ten years ago nine to eleven cap rates were something that were fairly regular and I’ve seen some pension funds buy long term lease deals for close to 6%.

MK: Recently, a major retail development set for Industrial Boulevard was presented to the Smyrna planning commission. The project is expected to contain more than 500,000 square feet of retail and office space with 80% of it in Smyrna and the remainder in LaVergne. This development along with 427,000 square foot Crossings of Spring Hill and the 830,000 square feet Providence Marketplace in Mt. Juliet are an indication of the current retail environment in the Greater Nashville MSA. Here’s Char Atwood.

CA: Retailers are pretty predictable in how they act and what they do and they’re following the housing market so you see them coming into places like Spring Hill and Hendersonville where the housing market is leading Nashville’s growth and it’s the suburban sprawl. Twenty to thirty year olds is really your population there and they’re starting to marry and have families and spend money and it’s just a great demographic for retailers.

MK: The proposed Westin Hotel development downtown on 3^rd and Broadway has caused a lot of recent media attention. The project is now scheduled for consideration by the Metro Planning Commission on November 14^th where it will receive a recommendation of approval or disapproval that will then be passed on to Metro Council. With a robust Nashville economy and only a limited amount of development space in the downtown area a proper balance is needed between both preservation and economic feasibility with these redevelopment projects. Here to comment on this trend is Chris Grear.

CG: The office users who are coming out of different areas of the world such as you know the northeast or the extreme west and California who are used to these older style buildings - big windows, exposed brick, tall ceilings – they’re finding value in our old style office buildings but again they want it totally refurbished and you’ve got to hit a price point that’s in the high teens per square foot on a full service basis to actually make the project work and you’ve got to have long term leases.

(Music up)

MK: That does it for our Market News update for today. Next up is our inside report. We have Chari Thomas who is an investment broker who deals primarily with retail and office property. Today Chari will be discussing why more and more buyers and sellers are reporting that investment contracts are failing to close and what you can do to protect yourself.

(Music out)

CT: There can be a feeding frenzy when a property hits the market so buyers have a big incentive to scoop the competition and tie up properties as quickly as they can by making a full price offer right off the bat. That should make sellers happy, right? Wrong. The problem is that ultimately the properties don’t justify the price so the property is tied up for sixty or ninety days only to have the buyer issue an ultimatum at the end. Drop the price or they’ll drop the property. At this point the deal falls apart and the sellers are back out on the market facing the same potential problem all over again. There are three ways sellers can protect themselves. First, they need to resist being mesmerized by silly offers. If they get a full price offer two nanoseconds after the property hits the market they should send that buyer back to his room to complete his homework before resubmitting. Second, we encourage sellers to make due diligence information available to prospective buyers up front along with the initial property offering. By providing leases, inspection reports, historical financials and so forth ahead of contract we remove some of the main causes of failure to close. Finally, sellers and their brokers need to do their own homework and actually qualify buyers. Is there a fit between the buyer and the property? Do they have the resources to purchase the property? Have other sellers had positive experience with them? There’s nothing wrong with asking buyers to put their bonafides on the table. Buyers also need to approach the world differently to avoid being shut out by hasty, if ill advised competitors, or worse yet to avoid becoming one. For one thing, buyers need to communicate with the seller and the seller’s broker as much as possible. Communication helps establish trust and gives the buyer a chance to express his sincere interest and credentials. References from other sellers with whom the buyer has worked can be very powerful at this point. Another strong tool that buyers can use is the offer structure itself. An offer structure which has concrete milepost can be much more attractive to a seller. For example, ten days to examine leases and financials after which leases and financials are accepted. Twenty days to have a physical inspection after which physical issues are cleared. Thirty days for appraisal after which appraisal is cleared. With so many deals falling out of contract, buyers are competing for seller’s trust as much as they are competing on deal terms. And sellers need to understand that out of the frothy pool of perspective buyers their goal is to pick the best investor not the one with the fastest trigger finger.

(Music up)

MK: Thank you Cheri. Those were some wonderful insights. For our feature presentation today we will hear from Tom Turner the executive director of the Nashville Downtown Partnership. Turner’s focused on business recruitment and retention initiatives as well as increasing residential development. Prior to this role Turner was vice president for public space management with the Portland Business Alliance which is one of the top rated business and recruitment districts in the country. So, without further adieu let’s get right into it.

TT: The partnership’s been around about twelve years now with the sole purpose of making downtown Nashville the compelling urban center in the southeast in which to live, work, play and invest. And all of our resources are to that end. A lot of the things we have going on now really fit those live, work, play and invest categories so we’re focused on business development which is retention and recruitment of businesses into the existing office buildings and the office buildings under construction as well as retail space. Certainly focused on residential development and perfecting the mix of residential that’s existing now and under development. Given all of those we know that the real building blocks of a successful downtown are the clean and safe and attractive as well as the being really accessible to the general public, to your visitors and to the people that come in every day. I think the clean, safe, attractive and accessible are going to be our building blocks for the next twenty years and then everything else will come from that.

MK: Right now there’s a lot of national attention on Nashville with all the corporate relocations as well as the robustness of our current housing market. With all of this has come a resurgence of our downtown housing so from the data the partnership has collected how many residents are expected to be living downtown in the next several years and with the declining market across country in the housing market how is the partnership preparing for this downturn when it eventually will come to Nashville?

TT: Well the interesting thing that we’ve seen even in Nashville and as a whole is that the housing market has not taken the huge swings it has in other parts of the country where you would have you know a 50, and this is not unheard of, 50 and 75% increase in other markets. We’ve always had a steady uptake and so because of that I don’t think that we’re going to have a drastic swing downward in fact I would doubt if we go down at all in the Nashville area as a whole. The reality for downtown and in 2003 as part of a study for downtown housing Economic Research Associates concluded that downtown Nashville was underserved by over 4,500 housing units at that time and that was in 2003. With everything that’s under construction today and everything that’s been developed in the last two years and planned for the future we will still have a deficit based on those 4,500 units. So, I think that we still have a lot of growth left in downtown residential and that was based on 2003 data. So we’re obviously in a lot better place in ’06 than we were in ’03. Baseball stadium will come online. The Riverfront plan is coming into focus. We have the Schermerhorn Symphony Center – a lot of things. Infrastructure’s being put in place. So I think we’ll have a better downtown to pull residents into and I think that will really add more demand to that 4.500 than we originally estimated.

MK: What about the numbers of population?

TT: Right now by the end of ’06 we expect to have about 3,000 people living downtown. There are about 2,600 units either under construction or in the works and that would be through 2009 so another three years out. Those 2,600 units equate to about, you know, one and a half; 1.4 to 1.5 persons per unit. So you’re looking at a probably another 4,000 people. So by the beginning 2010 you’re looking at maybe 7,000 people which is a number that you can really begin to work with and 7,000 people will demand certain amenities that we currently don’t have. A little bit more neighborhood retail, home furnishings, coffee shops, things like that that we have on a certain scale now but with 7,000 people the demand is much greater, And that’s what we’ve seen in other cities too.

MK: How is the Partnership planning to meet some of that demand in the retail sector?

TT: Well right now I think with the 3,000 people that we have we understand that there’s demand but there’s not enough demand to draw the retailers in. So we expect that in 2007 we will work, we hope to work on a retail strategy and then begin implementation in 2008 with the expectation that we will bring some of that retail in in 2009 and 2010. Some of it may come a little earlier and some of it may come a little later but that magic number of 7 to 10,000 residents we will begin to hit that in 2010 so we want to prepare for it in ’07 and ’08. What we’ve seen across the country interestingly enough the retailers that come in, that follow the residents almost immediately, are home furnishings - some soft goods some durable goods, but you will see furniture stores come back in to downtown and while it seems hard to comprehend we actually have a group signing a lease today that’s a really cutting edge home furnishing store that been in Nashville for about three years now and I think we’ll see an announcement on that in the next few days. And that’s what we’ve seen across the country is home furnishings really come back first then you have that those third place gathering – you know the first place is home, the second place is work and then the third place is where you really hang out and then those third place offerings really come into play right after the residents come in and whether that’s a small neighborhood restaurant, a bar or a coffee house with donuts and bagels, you know those type places where people can get comfortable. That’s what comes in and creates a true neighborhood out of what you have.

MK: Who are these retailers we’re talking about? Obviously what’s important to them is you know the demographics and the numbers and data. With all these new developments that are coming online for the residences is there enough of a product out there for an affordable housing within that demographic realm within downtown?

TT: Well I think there is. Affordable housing is one of the markets that you always want to continue to serve and I think maybe a better term might be workforce housing because as it is you want your housing to be available to the people that work downtown. That’s your primary draw is people that work downtown initially or close to downtown. And we’re about 50/50 right now in people that live downtown, work downtown or work close to downtown. So what we’ve, what we want to be able to offer is if you work downtown that you would be able to find a place to live and be able to afford it. So that true workforce housing effort I think is going to be important over the next few years. So that we have housing that’s available to those that are working in a law firm at every level whether it’s the receptionist up to the partner and if they’re in a professional real estate firm it could be a broker can live downtown and afford to live downtown as well as a research analyst and really provide that mix for everyone because there is a uniqueness to having every demographic served in your neighborhood. You would want your downtown demographics to reflect that of the community.

MK: Recently Nashville’s very first commuter rail the Music City Star began its operations from Lebanon into downtown. While this is a wonderful step in the right direction is a commuter rail system at $5 for a one way ride really the right focus for a city with such a dramatic growth rate to pursue versus a light rail system like St. Louis that has lots of stops and it’s about a dollar a ride?

TT: Well I think there’s a different supply and demand for commuter rail or light rail and light rail is more of what they have in St. Louis which allows them more frequent stops and they have their own track stop right on. The commuter rail that we have here uses shared track which restricts the operating hours and a few other things – a few other restrictions. What it does provide is an alternative for commuters on the Highway 40 corridor and the real selling point there is that you’re able to put a commuter rail project in place at a lower cost than you would if you’re developing light rail. I think ultimately you’d prefer to have light rail with multiple stops. In a very dense environment, keep in mind that Nashville is given however many counties we have in the metropolitan area whether it’s ten or twelve or fourteen or some huge number, we’re always listed high as in one of the most sprawled cities; sprawled metropolitan areas. So commuter rail probably more appropriate at this point than light rail which is for a more densely populated city. We would obviously like to be there in fifty years but that’s not today.
MK: What about some of the other transportation issues that the Partnership’s focused on whether it be trolley or bus or walkability?
TT: Well I think that one of the key points is that the number of parking spaces downtown, they’re over 30,000 parking spaces, and the availability of those spaces I think is key to having people in downtown on a long term basis whether it’s workforce or whether it’s residential or whether it’s people that are visiting all the amenities that are downtown from 10,000 theatre seats and everything that’s going on. So I think from that perspective the parking issue, the number of the space availability is there. I think the connectivity to the interstate system is there certainly with the Gateway Bridge and the Demonbreum Viaduct both opening in the last two years. And ongoing improvements by TDOT and Metro Public Works on those specific corridors. So I think from the transportation perspective it’s getting where it needs to be. We could certainly improve on wayfinding. And it’s interesting to note that you can get off a plane at the airport and if you decide to rent a car hopefully you know that you’re going to downtown Nashville because if not all of our great highway signs will direct you to Huntsville or Louisville and neither one of those happen to be in Tennessee. But our highway signs will take you there. They will not take you to downtown Nashville – you can see it but you cannot follow a sign to get you there. So we have work to do on wayfinding and I think once you get into downtown then you step down on your wayfinding and you need to direct people to parking because intuitively people don’t know where to park their car. If they don’t see a space it doesn’t exist. You need to provide directions to people to park their car and I think that’s important to do with a wayfinding system. To let people know that they can park here and then walk to the Schermerhorn or park here and walk to the baseball stadium because it’s not obvious to people that aren’t here on a regular basis and we need to reach out to those folks with wayfinding. On the parking and transportation we have really unique partnership with Metro government and the Sports Authority on the use of the LP Field parking spaces. 260 days a year Monday through Friday those parking spaces are available to downtown workers and they’re available free of charge. And the unique part of that is people can park there and walk across any of three bridges, four bridges to their place of employment or they can park there and ride a shuttle. Some shuttle’s available to the public as low as $25 a month. There are four separate lines right now taking people into downtown from those almost 7,000 parking spaces. It is really a unique offering.
MK: Well one of the issues with these garages and the underground parking is the fees for some of these are peaking $100 a month or so and with retail developments coming in with the residents coming in a lot of their parking needs are quick in, quick out and typically a lot of people aren’t going to want to pay or be able to pay for some of those retail uses. That would be interesting.

TT: Right now with the residents and the residential development that we have that parking is currently being provided for the majority of those. In a more mature residential and urban environment you will see some of that parking go away as people decide that walking is as much fun as driving. Certainly you see that in Portland, you see that in San Francisco and New York & Seattle. The demand for automobile is not as high. The demand for a place to put your automobile is not as high. Obviously for the most part we’re going to have people that move in and they’re going to want to have a car. That need will eventually diminish over time. We’ve already have some residents, I know of at least two in the Bennie Dillon, that have sold their car. They moved in to the Bennie Dillon and decided that why have a car when they’re using it once every two weeks. You know you have people that are getting healthy and riding bikes and things. Unique program - Washington DC, Seattle, Portland – is a model called Flexcar and that’s basically a shared car service. It’s used by a lot of downtown workers and mostly downtown residents. Then you basically have a group that organizes; they provide vehicles, insurance on the vehicles and then you have a valid driver’s license, you pay your monthly fee and then you have the use of the car. It’s timeshare for a car. You do this all online. You reserve a car for two hours, you reserve it for three hours whatever it happens to be. You pick it up in its designated spot you return it to its designated spot. It might sit there for six hours until the next person wants to use it but it’s a really good application of resources. Are we there yet? Not quite. But will we be? It won’t be long. So it’s going to be fun. And I think that’s a new concept for probably many people in Middle Tennessee that they would actually share their car with someone else instead of riding in it to work or to the store or what have you. If you look at a map of greenways through Metro Parks and Recreation; you can get to that website; but the interesting thing is that some of the first greenways across the country were in truly urban environments where you would think it would be the most difficult to have greenspace. We have, and I’ll hit public parks real quickly, we have Hall of Fame Park, Riverfront Park, Public Plaza, Bicentennial Capitol Mall, Church Street Park. There is good greenspace and then the connectivity between those greenspaces. The greenway coming out of Bicentennial Mall-Capitol Mall goes to the Riverfront. From there you can go to Metro Center and ride the levy. You can go south and get on the Shelby Bottom greenway. You can cross the pedestrian bridge on your bike or walk or jog. But the connectivity of the greenways just continues to grow as those projects come online. And I think ultimately we’re going to be looking at you know a system that connects many other parks where you can ride to or walk to throughout Nashville. So it’s a, I think it’s a really interesting way to take advantage of the green assets that are out there. And greenways are really part of that healthy mix; that healthy environment for downtown living.

MK: So a Riverfront redevelopment plan has been put into place. How’s does that tie into the plan and how are drawing people to the river and what does this development mean or redevelopment mean?

TT: Well I think it’s interesting that, you know, it is true - a river runs through it. But downtown has the Cumberland River and it’s an asset. It’s not a liability. The river is clean. Metro Water has done an amazing job. Actually the river is clean and it’s becoming more accessible as more people come in. There are certain geographic limitations that you will never get past and those obviously relate to the bluffs and the rock along the river. There are certain places you can access it and certain places that you can’t. But the Riverfront plan that was close to being finalized has five years worth of phased in projects that could all be done for total 40 to 50 million. And the numbers that we see, as to what that generates, that 40 to 50 million generates a significant private investment that produces property taxes that will ultimately pay for that and it’s the same reason you have any park anywhere - because it’s good for the community. But the opportunity’s there. Floating walkways on both sides of the river connected by the pedestrian bridges. I mean we do have great bridges so the ability to walk across a bridge, go on a walkway on the east bank, go on a walkway on this bank. I think it’s pretty unique to be able to have that on both sides connected with bridges. That opportunity, I think some property that’s on the east side of the river that’s closer to the river without the geographic limitation of the rock and the bluff, could make great development - is great development possibilities for a marina, for additional residential, unique park space. All maintaining that urban core but providing that sense that you might be in another place. So I think it’s a real exciting time on the riverfront and the greenways and the parks.

MK: Well I guess it was the beginning of last year a book was put out called The Plan of Nashville. It’s described as a community based vision of how urban core of Nashville should look and work in the 21^st century. So now with the number of new developments coming online or in progress such as a proposed convention center, the Sounds ballpark, the river redevelopment we just talked about, Tony Giarrantana’s Signature Tower, the Westin Hotel proposal, the Gulch, Rolling Mill Hill - how’s Nashville doing within the scope of this plan that was put together and how’s it changed since it was written?

TT: The good thing about The Plan of Nashville is you kinda look at it as a fifty year guiding light for the development of the city. You would ultimately want more projects fitting into the ten principles of The Plan of Nashville as you go along towards that fifty year end. And then it’s like The Plan of Chicago that was done I believe at the beginning of the last century which guided development in Chicago. It was put in place and certain principles were followed and if you have ten principles then you follow two now that’s great. In five years if you follow four of those ten you eventually get to where all the projects follow those principles. Because it is really what’s needed for a unique urban environment. But again it’s a fifty year look at what you need to do. You can’t do it all at once because you need time for habits to change and some of your infrastructure to develop but that’s what we should aim for as a city.

MK: So two years into it how are we doing?

TT: Two years into it I think we’re starting to see some buildings some green buildings come online in Nashville. Hastings Architecture – first green building I believe in Tennessee. We have Terrazzo in the Gulch which will be a LEED certified building. Probably office development in the future will need to be LEED certified to remain competitive. I’ve seen it in Portland Oregon where if the residential buildings; as they became LEED certified, that attached a premium to those buildings. That people were willing to pay more for that LEED certification – the end user. As energy practices change and energy prices change I think that LEED certification is going to become more important and hopefully we get less car dependant that we have in the past.

MK: The Downtown Partnership. Give us a five year, ten year, twenty-five outlook. What initiatives is the organization going to continue to take and I guess to make it the compelling urban center of the south?

TT: In the south. Well I think we’ll continue to work on clean and safe. We have a fairly clean city and a fairly safe city. I think as we have more people on the street that feeling will only increase. I think we could be more attractive with flowers and landscaping and things to really pull things together. We have had over the life of streetlights, and I don’t know what that is, but we’ve had eight or ten different streetlights installed in downtown Nashville. The streetscape plan put in place by Mayor Purcell’s administration really starts to change that in the third guidelines for each street. And when those streets are repaired or replaced that that furniture, fixture and streetlight element goes into that street. So we will see over time that that infrastructure changes so that we become a more attractive, walkable city. And I think that’s important certainly for access and transportation. I think we have to see as we develop projects downtown, whether they’re residential or office or mixed use, that we not only replace the parking that was there but we add parking supply for the parking demand that’s generated by that new development. So that you know call it parking plus call it something else but you replace what was there and you add supply for that demand that you create. We need to go towards that. Do we need to look at maybe some more appropriately placed parking facilities as we go forward? I think we do. As development patterns change we’ll need to look at where the parking supply is. If it’s not convenient then it’s really not parking supply. And I think we’re going to work a lot on residential development and continue to grow the residential base downtown. We can support far more than the 7,000 that we spoke about earlier. If you look at the two square miles that are downtown and you look at two square miles in Vancouver British Columbia; their goal is 120,000 people in two square miles. We’re talking about two square miles right now with 7,000 people and Vancouver’s more than 2/3 of the way to their goal. They have over 80,000 people living downtown. And then we’re going to work on that retail component because people are going to demand that as they move in and as office segment grows. We do think that it will grow. We’ve had really good return right now. We have Qualifax coming in, we have LandDesign; we have Katcher Vaughn and Bailey - just a number of firms. These creative firms that are coming into downtown Nashville that may have in recent years been located somewhere else, or in recent years might have made the decision to remain somewhere else or move further out and they’re coming in right now. And it’s that creative group that comes in first, the residents and then you have that office demand that follows and we’re really looking forward to a great time in Nashville over the next ten to twenty years.

(Music up)

MK: Okay. That was our podcast for today. Thank you for taking the time to join us and listen. Please be sure to join us next time when we’ll have more market news, features and spotlights and another feature presentation featuring some other topics raised in the commercial real estate industry here in Nashville and beyond. Please feel free to send us your feedback. You can email me at podcast@nainashville.com or to see all the show notes from this presentation at www.nashvillemarketreport.com. Also you can give us a call at 615-850-2700 to speak with me or any of our brokers here at NAI. Please stay tuned to our website to get more information about upcoming shows.
(Music out)

Ralph Schulz, the newly named President & CEO of the Nashville Area Chamber of Commerce joins us to discuss various programs and new initiatives within the Chamber. Schulz also discusses his background with the National Federation of Independent Business and the Adventure Science Center and his current involvement with the Music City Center Coalition in getting a new convention center in Nashville. He also comments on the Chambers initiative towards partnering with China through a trade mission planned for this coming spring.

Bill Barkley, the President of the Tennessee division of Crosland discusses the U.S. Green Building Council’s LEED certification that has become a very hot topic in Nashville recently. Bill also speaks about his history with The Gulch and his most recent mixed-use development, Terrazzo.

Tom Turner, the Executive Director of the Nashville Downtown Partnership discusses various issues related to downtown and how they are affecting the Nashville marketplace.