A Nashville Metro Council member wants to rein in the city’s Metro Development Housing Authority.
As reported, the MDHA has vast powers and gives real estate developers millions of dollars in incentives to build in ritzy areas of town. Many of those details aren’t public record.
This process, Tax Increment Financing, is supposed to help blighted areas — but not, in theory, a project such as the one at Fifth and Broadway in tourist-heavy downtown Nashville.
Metro Council member Bob Mendes has three bills up for consideration currently making their way through the council.
According to the Nashville Business Journal, one bill tries to make the incentives process more transparent. That bill, if passed, would accomplish that through a seven-member committee.
“The other two would divert a portion of money otherwise earmarked for MDHA to Metro Nashville Public Schools,” the website reported.
The latter two bills passed their first reading Tuesday on a voice vote. Council members are scheduled to hear them again on Sept.18, said Metro spokeswoman Raven Misch.
“They will have to go through three readings before it is actually law,” Misch told The Tennessee Star, adding this is how bills are passed through Metro charter policy.
MDHA, the website said, controls about $500 million in incentives. Metro Council members reportedly don’t have enough oversight over the agency. They are not happy about it.
As The Tennessee Star reported, the developers behind the new office, retail, and residential development at the corner of Fifth Avenue and Broadway want MDHA help. Specifically, they want $25 million in TIF benefits.
The development is supposed to have 230,000 square feet plus of retail and entertainment, as well as the National Museum of African American Music. Developers also plan to build residential and Class A commercial office space there.
TIF usually pays for, among other things, infrastructure improvements, acquiring land, or demolishing buildings in blighted areas.
MDHA officials say the district still meets TIF criteria because it was blighted at the time it was created.
Meanwhile, the developers, Oliver McMillan and Spectrum I Emery, told The Star that low bond market interest rates and the ability to lock in a fixed rate for the full term make a TIF bond too good for them to pass up.
As Tennessee Watchdog reported in 2016, TIF has also benefitted ritzy hotels in the Gulch area of the city to the tune of nearly $27 million in taxpayer money. These hotels include the Westin Hotel, the Thompson Hotel, and the 21c Hotel.
All this, despite reports the people who run Nashville’s downtown hotels charge more than their counterparts in New York City.
MDHA officials do not track how the money they hand out gets spent.
In 2011, a former MDHA employee, John Quinnan, told Tennessee Watchdog “the MDHA has wasted more taxpayer money than the public generally knows.”
At the time, former Metro Council member Jim Gotto complained the MDHA had too much autonomy and no one could hold it accountable.
– – –