October 11, 2018, Scott Broden, the Daily News Journal
Investors seeking a $70 million mixed-use redevelopment of the historic former First United Methodist Church will enter into a $1.8 million purchase agreement with the Murfreesboro
City Council, officials said.
‘They are ready to spend some money,’ Assistant City Manager Gary Whitaker told the council during a Wednesday workshop.
Whitaker said Murfreesboro Investment Group will be spending $385,000 in the next six months on a marketing study, engineering tests and architectural designs to determine the best uses of the 2.5-acre property
in the downtown area near the Square.
The city should be ready to close on the transaction after the study, and the agreement will require the investors to preserve the sanctuary and bell tower, City Manager Craig Tindall said.
Tindall expects a purchase agreement to be ready by the next council meeting for the former church property and an adjacent city parking lot. The elected officials bought the former church for $1.55 million in January 2016 from Franklin Synergy Bank.
Project to be based on market study
The investors initially announced plans in February to include an 80-room hotel, but a yet-named national hotel chain wants 110 rooms, Whitaker said.
The group had said it would convert a sanctuary and bell tower that dates back to 1888 into a 15,000-square-foot restaurant and gift shop. These spaces also may end up being used as an event space, based on what the studies recommend, Tindall said. The investors also initially announced plans for 55 residential condominiums and spaces for office and retail uses.
The marketing study will show what downtown can support, Whitaker said.
‘There may be a need for more office space,’ said Whitaker, adding that the city does not want the developers ‘to build something they can’t sell.’
The marketing study will emerge as a public document the city could use for other interested developers should the investors back out, Tindall said.
City wants more parking in plan
The initial plans also called for a parking garage with 456 spaces and onstreet parking for another 48 spaces.
‘One of the things we want to do is add to that parking structure,’ Whitaker said.
The parking will be required to be available for public use even if the garage ends up charging a fee, Tindall said.
‘We can’t burden the development with too much parking unless we want to pay for it,’ Tindall said.
Tax agreement to be part of project
The proposed contract will have three sets of primary agreements, and the investors will be required to provide the city $100,000 in earnest money, said Tindall, noting this money would only be refundable if studies suggested the redevelopment plan was not feasible.
One agreement involves the purchase to sell agreement. Another agreement will stipulate the responsibilities of the developer and the city, Tindall said.
A third economic impact plan agreement will involve a tax increment finance
arrangement with the Rutherford County Industrial Development Board, the County Commission and the council, Tindall said.
Tax increment finance agreements permit existing property taxes to remain at the same level before redevelopment. The net increase in property taxes after redevelopment could be applied to pay for bonds used to finance the project or infrastructure, such as parking.
Group reforms with new investor
The group initially estimated that the completed project will generate $2.3 million in annual taxes, with the state collecting nearly $1.1 million, Rutherford County getting $753,253 and the city receiving $517,509. Murfreesboro Investment Group’s principal partners still includes Nick Patel of the Detroit area. Bob Patel and Mike Chaudhary are no longer involved, said Jeff Reed, a Murfreesboro attorney representing the investors.
One of the new partners is Suri Ramanna of the Nashville area. He’s chairman and chief executive officer of TRC Worldwide Engineering. He has worked on multiple large projects, including the Pinnacle Tower in downtown Nashville, Reed said.
Reach Scott Broden through email at firstname.lastname@example.org, phone at 615-2785158 or on Twitter @ScottBroden.