Many of you may already know that the Rolling Mill Hill condominium development at the site of the old Nashville General Hospital has been through several phases of disaster in the last few years. Locally MDHA has invested more than $10 million into the mixed-use redevelopment project. Back in 2005 pre-construction contracts at about $300 per square foot were brisk.
Initial stumbles came when it was discovered that the old Power Plant building was too denigrated to be salvaged. Shortly there after we learned that developers had “delayed” plans for the large “District” building – including the pool. Other sections of development were stalled including the luxury Middleton Townhomes. We’ve been hearing of plans for development the Trolley Barns into artistic commercial spaces but there has yet to be movement on the grounds. Then Baltimore’s Struever Bros. Development team up stakes an cancelled their company plans for development. Eventually it was announced that the completed sections of development had entered into receivership and local attorney John Cheadle was placed as official receiver.
This past Thursday the property was auctioned to buyer Bank of America who holds the majority of the debt associated with the project. It is believed that the bank will put the units back on the market quickly at more affordabale price points. But there have also been rumors of investor interest in purchasing the completed development sections for either resale or rental purposes. The future of the 72 units which are now completed on the hill is still up in the air.
MDHA is completing actions to soon break ground on an $40 million section of “affordable” units – rentals I believe – to carry on development plans into the future.
Personally I don’t know what to think. I was initially VERY excited about this development. I even put a unit under contract myself. Now it looks like a war zone up there will demoed & tilled land with no plans for development – just another victim of national mortgage and credit meltdown. There does seem to be some light on the horizon with a strong up-tick in recent sales at both ICON and Encore tower at reduced prices.
More Rolling Mill Hill coverage:
- Rolling Mill Hill Condos Go Back to the Bank (Tennessean)
- Nashville development dreams fade into foreclosure (Tennessean)
- Bank Buys Back Rolling Mill Hill Condos (NBJ)
Here are some of my thoughts on the urban condos market. It may seem as though developers have over-built our market, but when you look at the number of urban residents in comparably sized cities you’ll see that we lag far behind in urban living options. Right now we offer less than 5,000 units. Currently, St. Louis and Charlotte have over twice the number of downtown residents and Memphis and Indianapolis have over four times the number. Many do not realize that we had ordinances against living in the central business district until the mid-1990s. – a policy that has put us decades behind similar-sized cities.
Likewise, most developers put building plans on hold after the recession hit in 2008. That means that the units we have now are the only units we will have for years and years to come. There are currently no plans to add new units. The exception is the troubled Signature Tower which most believe will never get off the ground.
My conclusion is that it will take quite some time to absorb the units we have now, but once we do there will be a supply deficit due to the lack of new construction. A recent study from the RCLCO shows that 77% of Generation Y buyers want to live in an urban-style core. The time may have already passed to grab up the best deals. (recently ICON and Encore raised prices on their premium units). If you are interested in an urban lifestyle I say go for it – and do it now! Today’s interest rates are low, developer prices are down, there are occasional foreclosure options, and high inventory allows you to pick from tons of great options.
10/3/09 Update: Bank of America is finally releasing the early contract holder’s earnest money deposits. It’s only been, what, three years?!?
