When will the porridge be just right? Former Mayor Phil Bredesen was criticized for being in the pocket of business. After all, he was one of them. He spoke their language, used the same kind of spreadsheets they did, and sought their input. Meanwhile, the poster children for his civic tax-break back-bending are all over the place—HCA, Gaylord, and Dell Computer.
Now Mayor Bill Purcell is in the hot seat with the business community for precisely the opposite treatment. That could be a good thing or a bad one—depending on whether you’re a pony-tailed, coffeehouse-frequenting neighborhood president or a high-powered, deep-pocketed real estate developer.
“My focus has been downtown for 15 years, and frankly, I’m concerned,” says local developer Tony Giarratana, who counts The Cumberland apartments among his projects.
“I think there may have been a sense within the Nashville community that Mayor Bredesen focused too heavily on downtown to the exclusion of the neighborhoods,” he says. “I’m not sure if that was true, but he made some phenomenal strides in revitalizing downtown Nashville.”
Meanwhile, Giarratana says, “the current administration seems to be taking the complete other extreme, focusing on neighborhoods to the seeming exclusion of the downtown area.”
Deputy Mayor Bill Phillips takes some issue with that, pointing to, among others, the Rolling Mill Hill and Gulch project developments and saying the city has committed to $50 million worth of renovation to Metro buildings. “All that’s downtown,” he says.
The most acutely offending downtown issue for the capitalist crowd is, of course, Purcell’s plan to relegate the downtown Thermal energy plant to the history books. Business interests fear such a plan would make the cost of heating and cooling their offices skyrocket, even though the Purcell administration is promising that an alternative to Thermal will provide services at market rates. Meanwhile, the Nashville Area Chamber of Commerce types are both ticked that Purcell didn’t consult them and worried what impact the mayor’s plan might have on downtown.
But several other issues are exacerbating that friction between the mayor and the business community. First, Nashville Area Chamber of Commerce officials characterize office vacancies in the downtown business district as unusually high, a contention the mayor’s office has challenged.
Two weeks ago, for example, when asked about downtown office vacancies, the mayor told WPLN radio, “I think things are good. I think they are going to get better.” Such a seemingly innocuous throwaway political line, however, had members of the business community quietly seething. One local business leader told the Scene that “it just exasperates the shit out of us when he says things are great.” They want Purcell, at the very least, to acknowledge the problem.
The way office vacancy rates are figured is partly to blame. At the end of 2000, 648,106 square feet of downtown office space was vacant, compared with 597,844 the year before—statistically not a dramatic change, from 10.62 percent in 1999 to 10.79 percent last year. But, business officials say, there is an additional 300,000 square feet of space available for sublease that has been left out of those figures, bringing vacancy to a troubling 16 percent.
“Any time your vacancy rate is above 10 percent, you start to get real nervous,” says Richard Fulton, the son of former Mayor Dick Fulton and the principal partner with Grubb Ellis Centennial Inc.
But the Purcell administration remains circumspect, resisting the urge to conclude the sky is falling. “I keep hearing that McDonald’s closed,” Deputy Mayor Phillips says cynically. “I don’t think there’s a market softening. I think we need to stay on top of it, and we need to make downtown attractive.” He does concede, however, that there is a perception that businesses are “fleeing” downtown, something both the Purcell administration and the Donwtown Partnership, a Chamber affiliate organization, want to reconcile with the public. “Ten years ago, the vacancy was 20 percent-plus,” Phillips says.
Meanwhile, building owner and local businessman Ted Welch characterizes the downtown office market as one of Nashville’s weakest, saying a languishing downtown—the city’s heart, if you will—threatens the very livelihood of Nashville. “If a human doesn’t have a healthy heart, then nothing else functions properly.”
The Nashville City Center’s Richard Fletcher, who has been at odds with the mayor over his Thermal proposal, agrees. “When you combine the sublease market and the pending vacancies, then you start getting to a level that obviously indicates a softening in the market.”
Meanwhile, another seemingly meaningless Purcell utterance threw business leaders into a similar tailspin. For a story about the state of parking downtown, the mayor recently told The Tennessean that a new municipal parking garage is “not on our list of priorities at this point.”
You’d have thought he dropped a napalm bomb. His dismissal of the idea was not what the white-collar community downtown wanted to hear. Fulton told the daily for the same story that more city-owned lots would help the situation. “I think it’s the responsibility of the city to provide its citizens with affordable parking,” he told the newspaper.
The line was drawn. The chatter downtown since has been that the mayor simply doesn’t understand the issues. He’s become, in the collective mind of at least some of the business community, a sort of anti-Bredesen. (Never mind that might be good for some serious popular appeal.)
“I think probably what concerns a lot of downtown proponents is you should at least listen to the reasons why there needs to be more parking and start looking at solutions rather than closing the door,” Fulton says.
Giarratana agrees parking is one of downtown’s major issues. “There is no question in my mind that there is a need for a substantial amount of well-located, competitively priced parking in downtown Nashville, and that, unless and until such parking is delivered, downtown is going to fail to achieve its potential.”
For his part, however, Fulton believes that there’s some reason for optimism, that the Purcell administration ultimately will consider the municipal parking option. “I think long-term, the administration is going to do that,” he says. “There are certain things that you have to look at long beyond the parking today.”
But Phillips reinforces the mayor’s position about new city-funded parking, saying that just because parking is not always adjacent to where people work doesn’t mean there’s a shortage. “The Chamber of Commerce study that it paid for says we have plenty of parking.”
Fulton says tensions are running high downtown for good reason. Already, the sublease market is driving down rental rates. “Understand that when you have to pay for parking for your employees, it adds about $4 per square foot to the effective rental cost. And then you start looking at what’s going on with Thermal,” which could cause square-foot rental to become “prohibitively high” downtown.
To make matters more troubling, Nashville officials can’t say that softening downtown markets are a trend nationwide. The opposite is true, which makes movers and shakers, well, shake in their boots. Downtown Los Angeles and other cities are seeing record demands for space. “While we’re heading south, others are improving their downtowns considerably,” Welch says.
To be fair, Welch doesn’t embrace the characterization of Purcell as the “anti-Bredesen,” but he does say the mayor seems to be making an active effort to equalize attention across the city after years of downtown investment. He thinks “the mayor is of the opinion that there needs to be more balance going forward.”
Comparing downtown and suburban interests to two dogs competing for the same food—one getting fatter all the while—Welch says equalizing is fine, “as long as you don’t stop feeding one. Downtown Nashville doesn’t need to starve.”
