Out-of-state developers are eyeing the three empty condominium buildings at Rolling Mill Hill, looking at the units as possible apartments instead.
The 72 condos south of downtown have been in receivership since early June when property owner RMH Development 1 LLC, a Wisconsin-based holding company for the project’s investors, defaulted on a $21.4 million construction loan. The units are finished, but none have been sold.
Receiver John Cheadle says some heavy hitters are looking at the property: The Lionstone Group, a real estate investment firm in Houston, The Tuckerman Group headquartered in New York and a New Orleans firm he wouldn’t name. Local developers also have been shown around the property.
Cheadle says the investors are interested in buying the entire condo project and have been hinting at renting the units until the condo market rebounds.
That’s probably the right strategy, says developer Ray Hensler, who built the Adelicia condos in West End.
“It’s a great location, and I think they’ll lease up pretty quick,” he says. “… But from the standpoint of valuation, the eventual pricing from that trade may turn some heads. Right now, everyone’s still guessing about what a new condo project here might be worth as an apartment.”
Yet, the city also is planning apartments next door.
The Metropolitan Development and Housing Agency is planning to break ground in October on Nance Place, a 109-unit apartment building at Rolling Mill Hill that will be gold certified under the U.S. Green Building Council, says Joe Cain, development director for MDHA.
The 34-acre Rolling Mill Hill is being redeveloped through a public-private partnership between the city and select developers. MDHA has invested $10 million into the project over the past six years. Plans call for a mixed-use community, but a timetable for complete buildout remains uncertain.
Direct Development out of Green Bay, Wisc., was acting as developer for RMH but is no longer involved with the project. Direct had planned a $55 million project with four condo buildings on the site of the old Nashville General Hospital but canceled plans for a 10-story building called The District last year, citing the sluggish economy.
MDHA just approved a contract to move forward with contamination removal at the trolley barn site, which the city agency hopes to transform into offices and shops. That property was used for vehicle maintenance, and the city is working with the Environmental Protection Agency to clean it up. The agency also is seeking bids for a third phase to add sidewalks, a greenway and improvements along Hermitage Avenue.
MDHA wants to see people moving into Rolling Mill Hill, as renters or buyers. If the condos become apartments, Cain says, it won’t affect the construction of Nance Place because that building is aimed at workforce housing for people with household incomes less than $50,000 a year. The upscale condos likely would have higher rents.
“Those units are ready for occupancy, ready for folks to move in, and the greenway will be under construction for residents to enjoy the overlook,” Cain says.
The condos remain vacant, sitting quietly with panoramic views of the Cumberland River inside the brick Victorian architecture of the old hospital. All units have stainless steel appliances, granite countertops and modern cabinets.
RMH built three of the five residential buildings planned for Rolling Mill Hill. Two are renovated buildings, the Victorian with 12 units and the Art Deco building with 24 units. The Metro building is new construction and is the largest at 36 units. The nine-unit Powerhouse and 92-unit District were never built, but could be added by a new developer.
Condos had been priced between $230,000 and $680,000, with some affordable units priced at $139,000 for buyers meeting income qualifications.
The $10 million Nance Place, funded through the state’s Housing Development Agency, will take 12 to 14 months to build. In the meantime, MDHA is working to get federal grants to pay for the $8 million greenway, and the agency hopes to get historic tax credits to complete the $10 million to $15 million renovation of the 1930s-era trolley barns. The Matthews Co. in Nashville will be the developer on the barns, but no timeline has been set. MDHA is working to get the barns on the National Register of Historic Places.
A 2003 feasibility study by Economic Research Associates found enough demand for 100 to 200 units per year at Rolling Mill Hill. A master plan based on the study calls for 34 acres of mostly residential use but also office and retail space. Cain says the master plan may include too much residential space and will be re-evaluated based on the rough economic conditions.
In its master plan and guidelines set out for MDHA in 2003, RTKL Associates Inc. says a high-quality urban neighborhood could be created at the site, but phase one of the project must be an overwhelming success.
“Rolling Mill Hill must be quickly established as a premier urban neighborhood location in Nashville, with prices and rents at or near the top of the market,” the study reads.
RMH and Direct aren’t the first developers to bail on the project.
Baltimore-based Struever Bros. Eccles & Rouse had eyed the site of the former Thermal Transfer Corp. plant and Rolling Mill Hill on the west bank for a major mixed-use project. Plans called for 214 condos, a 224,000-square-foot office building and up to 50,000 square feet of retail. But Struever pulled out of Nashville and has not announced any future plans.