John Wise and Gary Patrick
The Housing Education and Health Facilities Board, after a lengthy discussion, on Wednesday deferred action for a month on a request on a six-year-old PILOT tax freeze request for a project at Main and Market that is 90 percent completed.
Board Chairman Hicks Armor said he had problems with the request by developer John Wise, while noting that the original PILOT by a different developer was never consummated after board approval.
He said, "The easiest thing is for this board to say no. But I'd like to find a resolution to it that's fair."
Opponents said the project has changed and now has more apartment units and fewer parking spaces. The 2010 PILOT does not include a requirement for payment of the school tax portion. It has fewer parking spaces than the original plan by Eric Cummings and Gavin Thomas.
Assistant city attorney Phil Noblett said there would not be any tax relief for the first five years of the PILOT because the city board never took title to it. He said if it is approved now, there would be five years of no taxes remaining, then a step up by 20 percent per year to full taxes.
Developer Wise said he had asked his attorney, Gary Patrick, if he could get the full PILOT, and he was told, "Don't get greedy."
The developer said he did not bring the request earlier because the River City Company, which originally held title to the former site of the Union Gospel Mission, "wouldn't ever let me turn it in after everybody startied raising hell about PILOTs."
Mr. Wise said he finally took the project to the city board himself. River City officials have been present for prior PILOT requests, introducing them and speaking in support, but were absent on Wednesday.
He said he entered the picture when "River City had mud on its face after the original developers fell down and couldn't get back up." He said Wells Fargo Bank and HUD declined to fund the original plan which had 48 apartments and underground parking. Initial parking was 78 spots and it is now at 55 spaces for the 63 units, plus commercial space on the ground floor.
Mr. Wise said he "self-financed" the project and he is still $4.5 million in the hole. He said it has been running behind schedule because he was putting up the money.
On the school tax, he said he has five children in the public schools and does not object to paying it. But he said that would get into negotiation of terms of the PILOT.
On parking, he said when the city requires zero-lot-line construction, it makes it difficult to find space for parking.
Attorney Patrick said the board was obligated to go forward with the PILOT as is, saying it had passed in September 2010 and it was still the same property. The original developers went under the name of Mission Partners, while Mr. Wise started out as Main Street Apartments and switched to the Mission Partners title last year.
Mr. Wise said, "I stepped into a mess where it was the first substantial development over there." He said it has spurred much additional construction.
He said he always relied on getting the benefit of the tax abatement. He said, "I looked at the PILOT and it was on the books."
Developer Wise said he did not want to become involved in a lawsuit, but the said if the board turned him down that he might wind up suing the city for the full amount of the original PILOT. He said, "That could be hundreds of thousand of dollars more."
Chairman Armor told him that "had it have been me, I would have lined up the financing. But you self-financed it."
The president of the Fort Negley Neighborhood Association said, "The original owners were part of the community. This is a money-making machine. The only thing in common is the location. I'm really surprised that it got this far."
Southside resident Franklin McCallie had concerns about the school tax not being paid and about a shortage of parking. He said, "I don't want the Southside to get like Chicago where you drive around the block for hours."
Teresa McCallie said there ought to be a moratorium on new PILOTs until appropriate policies and procedures are in place. She said, "As it is, I feel sorry for everyone involved."
Franklin McCallie