General
What is the Master Developer Agreement legislation?
In February 2024, Mayor Freddie O'Connell's administration filed two pieces of legislation related to the initial development of Metro-owned land on the East Bank.
The legislation was in the format of an ordinance authorizing Metro and The Fallon Company to develop the 30 acres of the Metro-owned East Bank land identified as the Initial Development Area.
How much rent will the Fallon Company pay Metro each year?
The development and lease agreements require Fallon to pay market-based rent for each parcel of property it develops. Generally speaking, the annual rent payment for any parcel is calculated by:
- Determining the appraised value of the parcel at the outset of lease, and then
- Multiplying that appraised value by 4% (in the case of residential uses) or 4.5% (in the case of non-residential uses) – percentages that our consultants have advised are market-based, and then
- Increasing the annual rent by 2.5% each year, consistent with historic annual CPI adjustments, with a further potential CPI-based adjustment of up to 0.25% every ten years
In addition, the ground leases require each ground lessee to pay Metro "Future Participation Rent" anytime that the ground lessee sells its leasehold interest or enters into a refinancing transaction that generates cash for the ground lessee. Future Participation Rent is equal to 0.75% of the gross sales price or refinancing proceeds (as applicable) of any residential property, and 1% of the gross sales price or refinancing proceeds (as applicable) of any non-residential property. Sales and refinancings of leasehold interests in parcels consisting of 100% affordable housing do not require the payment of Future Participation Rent.
How will infrastructure costs be divided between Metro and Fallon Company (as well as Titans and TPAC if applicable)?
In April 2024, the Metro Council approved a Master Developer Agreement outlining the framework for development of the initial 30 acres of Metro owned land on the East Bank. The following represents what was included in the initial Master Developer Agreement and is subject to change based on future conditions.
Fallon IDA (Infrastructure Required for Fallon and Related Development)
| Item | Description | Funding Responsibility | Construction Responsibility | HDR Estimates Current Construction Cost | Total Project Cost* |
|---|---|---|---|---|---|
| East Bank Boulevard | From Victory to KVB, adjacent to area D, E1, and F | Fallon | Fallon | $8,463,000 | $18,712,000 |
| Waterside Drive - Parcel F | From MCM to KVB (Adjacent to Area F) | Fallon | Fallon | $4,287,000 | $9,478,000 |
| MCM extension on Area D, E1 | Ped bridge on structure, stairs, ramp, and 2 elevators on Parcel D. Extension of already in place MCM across parcel F to EBB***. | Fallon | Fallon | $16,571,000 | $36,640,000 |
| Sylvan | 2nd Street to Interstate Drive Extension | Fallon | Fallon | $3,507,000 | $7,754,000 |
| MCM Across East Bank Boulevard | Pedestrian bridge to span East Bank Boulevard | Metro | Fallon | $2,671,000 | $5,906,000 |
| Relocation of Colonial Pipeline | Removal and relocation out of parcel F | Metro | Metro | $430,000 | $950,000 |
| Victory Avenue | From 2nd Street to Waterside Drive | TPAC | TPAC | $6,555,000 | $14,494,000 |
| Waterside Drive Parcel E | From Victory to Pedestrian Bridge, Adjacent to Parcel E | TPAC | TPAC | $4,605,000 | $10,182,000 |
| MCM on Parcel E | Demo existing bridge structure from main span to EBB. New East-west temporary structure touching down in Parcel F. | TPAC | TPAC | $19,435,000 | $42,971,000 |
| Totals | $66,524,000 | $147,087,000 |
Optional for IDA (To Be Determined)
| Item | Description | Funding Responsibility | Construction Responsibility | HDR Estimates Current Construction Cost | Total Project Cost* |
|---|---|---|---|---|---|
| Parking Garage on Parcel C | Metro Parking Spaces on Parcel C, timing TBD | Metro | Fallon | $46,823,000 | $103,528,000 |
* Estimates include soft costs, contingencies, escalation, and year of expenditure.
Will there be any impacts to riverfront access and businesses that utilize the river during construction?
Metro has commitments from the Fallon Company and the Titans that under no circumstances will small businesses be frozen out of their ability to utilize the river. There may be periods where access will shift down the river during periods of construction and utility relocation, but it will not close to those businesses that utilize it.
Affordable Housing
How much housing will be built in the Initial Development Area?
The centerpiece of the Development Agreement is the required delivery of a minimum of 1,550 housing units with a robust mix of affordability requirements. The Development Agreement includes these milestones:
- Within two years from site availability – deliver 300, 100% affordable residential units, together with constructed and reserved space for a children's day care;
- Within six years from site availability – deliver 400 additional residential units, with at least 10% being affordable;
- Within nine years from site availability – deliver 550 additional residential units, with at least 10% being affordable;
- Once James Robertson is lowered to grade – deliver an additional 300, 100% affordable residential units, to be jointly developed with an East Bank mobility hub.
The Development Agreement requires residential affordability to remain in place for the 99-year duration of the leases, ensuring that the East Bank remains an affordable neighborhood for Nashvillians - an unprecedented first for affordability leases in Nashville's history.
What is the breakdown of AMI for the residential buildings within the Initial Development Area (IDA)?
Fallon has committed that two-thirds of the units in the all-affordable buildings will be at 60% of the AMI and below, including some deeply affordable units as low as 30% AMI. The other one-third of affordable units in will be at the 61-80% AMI range.
In the market rate buildings, where at least 10% of the units will be affordable, those will be at 80% AMI and below.
How can we ensure that the 100% affordable buildings do not differ in design quality from market rate and other surrounding buildings?
In August 2024, the Metro Planning Department extended the Downtown Code (DTC) to the Initial Development Area of Metro-owned land on the East Bank. This means each building constructed on Metro-owned land (including affordable housing buildings) must be reviewed and approved through the same design review process prescribed by the Downtown Code.
Why are we building affordable housing here?
The starting point for everything Metro is working to achieve in the Initial Development Area (IDA) comes from the Imagine East Bank Vision Plan, which is the result of almost two years of community engagement that outlines Nashvillian's priorities for this area.
We heard that our residents want the East Bank to be a place for everyone, regardless of economic status and we are grateful to have a partner in Fallon who also values the importance of creating a successful mixed-income neighborhood.
What is the Area Median Income (AMI) for Davidson County?
The Area Median Income (AMI) is determined by the U.S. Department of Housing and Urban Development (HUD) and Davidson County's AMI is part of a 10-county metro area, including Williamson County.
The 2023* AMI rate is as follows:
| AMI | 1-person Household | 2-person Household | 3-person Household | 4-person Household |
|---|---|---|---|---|
| 30% AMI | $21,000 | $24,000 | $27,000 | $30,000 |
| 50% AMI | $34,950 | $39,950 | $44,950 | $49,900 |
| 60% AMI | $41,940 | $47,940 | $53,940 | $59,880 |
| 75% AMI* | $52,400 | $59,900 | $67,400 | $74,850 |
| 80% AMI | $55,900 | $63,900 | $71,900 | $79,850 |
| 100% AMI* | $69,900 | $79,900 | $89,900 | $99,850 |
Area Median Income for all households: $102,500
The asterisks indicate the numbers that were calculated by Tennessee Housing Development Agency (THDA) rather than HUD, as HUD does not provide calculations for the 75% and 100% AMI rates.
Tennessee Performing Arts Center (TPAC)
What is outlined in the Memorandum of Understanding (MOU) with TPAC?
Metro has filed a resolution to approve a non-binding Memorandum of Understanding (MOU) between Metro and TPAC to bring a beloved, longstanding cultural asset to the East Bank.
The MOU notes the following:
- Metro would ground lease a portion of Metro-owned East Bank land to TPAC for 35 years, plus extensions.
- TPAC would be responsible for accessing the state and private funds necessary to design and construct a new, world-class performing arts facility.
- TPAC would be responsible for funding the construction of a significant portion of the redesigned and extended Pedestrian Bridge, as well as surrounding roads and utilities.
- TPAC will be responsible for ensuring that a temporary pedestrian bridge provides uninterrupted pedestrian and bicycle access between the East Bank and downtown.
What infrastructure is TPAC responsible for?
The Development Agreement with Fallon and the MOU with TPAC outline that:
- The Seigenthaler Pedestrian Bridge will be extended and redesigned to enhance pedestrian and bicycle access through the East Bank. The majority of the costs of the Seigenthaler Pedestrian Bridge will be covered by Fallon and TPAC. TPAC is responsible for a temporary pedestrian bridge.
- The commencement of construction of the East Bank Boulevard – with the portion from Victory Avenue to Shelby being funded by Fallon.
- The construction of the Cumberland Walk by TPAC and Fallon – a pedestrian and bicycle friendly path from Shelby and Interstate Drive to the Cumberland River.