Nashville Metro At-large Councilman Bob Mendes is taking additional steps to try to rein in the city’s Metropolitan Development and Housing Agency.
Last week Mendes had four Tax Increment Financing-related bills up for discussion, according to the Nashville Business Journal.
The newest proposed bill would require Metro hire an independent accountant to validate the financial assumptions built into any proposed new MDHA redevelopment district, the website reported.
Other bills Mendes backs are already on their second and third readings.
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 necessarily a project such as the one at Fifth and Broadway in tourist-heavy downtown Nashville.
According to the Nashville Business Journal, one of Mendes’ bills 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.
Council members must go through three readings before the bills are actually law, in line with Metro charter policy.
MDHA 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.
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