Tag: Planning Commission

I’m a ‘no’ for the Donelson TOD

Tomorrow, the proposed Donelson transit-oriented redevelopment district is back before the Metro Planning Commission. I have been working for many months to see whether the legislation could be improved so that I can support it. I don’t think I am going to get there and I want to explain why.

There’s not much time left before the Planning Commission meeting tomorrow…so I’ll do this in bullet points:

  • Here’s my April 16 update about the Donelson TOD. At that point, I was feeling good about the general direction of the legislation. Since then, Metro has been through the budget process. The final budget the Council passed on June 19 has Metro relying on selling one-time assets, repealing an employee pay plan, and shortchanging schools on their requested budget.
  • I have also now seen the financial assumptions supporting the proposed Donelson TOD. My thoughts about those assumptions are here. In summary, there’s no question that, in the early years of a Donelson TOD, there would not be any new revenue for Metro to cover the new operating expenses that would go along with a few hundred million dollars in new buildings. Given the current budget crunch, I cannot see how it is a good idea to voluntarily take on new budget requirements where there is no offsetting revenue to Metro.
  • Since the last Planning Commission meeting on May 24, the Planning staff has conducted a review of the affordability of the area immediately surrounding the proposed Donelson TOD. According to the staff, of the housing units in the area currently, “90% are affordable at 100% of [Area Median Income, or “AMI”], 75.4% are affordable to moderate income (80% of AMI) households and nearly 62% are affordable to low income (60% of AMI) households.” In other words, the Planning Department believes that the area is currently relatively affordable. We can expect that concentrating government incentivized large scale development will erode the affordability of the area.
  • One of the main arguments in favor of transit-oriented development is that it provides options to include affordable housing. However, surely Nashville won’t want to create a transit-oriented development district in order to provide affordable housing to replace the affordable housing that will be lost due to transit-oriented development?
  • The legislation being reviewed by the Planning Commission tomorrow would allow MDHA to set affordable housing goals in the district. I believe those goals should be set by the Mayor’s office in consultation with the Council. Also, the goals for affordable units to be preserved and built in the district should be established before the Donelson TOD is passed into law. No goals have been set at this time.
  • The legislation being reviewed by the Planning Commission tomorrow would allow the “design review committee” to be selected, in part, by the Mayor. As I understand it, MDHA wants to have the exclusive ability to appoint the members of the design review committee. This issue is currently unresolved.

Councilmember Jeff Syracuse has worked tremendously hard to balance all of the competing interests. I certainly appreciate all of his hard work. But for now, I have to respectfully choose to be a ‘no’ on the Donelson TOD legislation. I don’t think Metro can afford to take on new operating expenses with no revenue in return. The area is currently relatively affordable. There is no goal proposed for preserving or adding to affordability in the area. There is no pressing time concern. To me, this just isn’t the right time for this district.

 

STR transparency…

In the last few hours, I started getting this form email urging, for the first time, that Council members abstain on Bill -608. To be clear, it is very likely that any form email that we get opposing Bill -608 is drafted and spread primarily by industry lobbyists.

The email says there was a four hour meeting on Friday afternoon where new compromise proposals were floated. If that happened, the potential compromises haven’t been shared with the Council generally. I don’t know any more than what is in the form email.

Also, the form email calls -608 a ban on short-term rentals. The truth is that, if -608 were to pass, there would still be unlimited owner-occupied short term rentals, unlimited investor-owned short term rentals in buildings with 3 or more units, unlimited short term rentals downtown, and unlimited short term rentals in the Gulch. Yes, with -608, investor-owned short term rentals in traditional 1 and 2 unit homes in family neighborhoods would be phased out. But there is simply no way to call this a ban. Under -608, there would still be many, many short term rentals in Nashville.

For almost a year now, my position has been that I intend to support whatever short term rental bill the majority of district council members support. By definition, the district council members are closer to day-to-day short term rental issues than I am as At-Large member of the Council.

I believe that the majority of district council members support -608. My plan is to attend the Council Planning and Zoning Committee meeting tomorrow to get a better feel about this before deciding for sure how I’ll vote.

I’m posting this new industry form email this afternoon because it is irresponsible. While the form email is wrong in claiming that -608 is a ban, both sides of this issue have engaged in hyperbole. Maybe that’s just the way it goes with tough issues. My real objection is that the form industry email runs the risk of creating a self-fulfilling prophecy about state preemption. Under any view of the world, a law that allows unlimited short term rentals in owner occupied homes, high rise buildings, any building with 3 or more units, all through downtown, and the entire Gulch is not a ban. If it passes, it will reflect a family-friendly compromise that I would ask the state to respect and honor. This topic is hard enough without the industry going out of its way to invite state intervention.

As we head into 2018…

There are a lot of issues brewing for the Metro Council in the new year. We’ll hit the ground running with a meeting on January 2 that may last until midnight. Here’s my take on a bunch of the hot upcoming issues:

Ft. Negley: I wrote about this back in August. The only new fact since then is that, in early December, we all learned that the preliminary archaeology work showed a high likelihood of human remains on the site. Further results were supposed to be available by the end of December, but I’ve not heard anything further yet.

My prediction is that this project will keep moving in slow-motion with more digging and studying and considering until at least after the expected May 1, 2018, transit referendum. Remember, there is no legislation pending before the Council on this project — there isn’t anything for us to pass or not pass.

Transit Referendum: In the Council’s next several meetings, we will decide whether to put the proposed transit referendum on the May 1, 2018, ballot. The legislation with the referendum language is here. People should realize that the legislation also attaches the full 55 page Transit Improvement Program. This document was first released on December 13 and I do not believe many people have read it yet. Please read it. Unlike a lot of the information that has been available over the last six months, the full Transit Improvement Program is largely spin-free, especially in how it describes the proposed sources and uses of money for transit over the next 15 years.

In the coming weeks, I will put out a more in-depth set of thoughts about the full Transit Improvement Program. I think it is very likely that the Council will approve putting the referendum on the May 1 ballot so that the voters can decide this important issue themselves. Reading the full Transit Improvement Program will help voters make an informed decision.

New Federal Tax Law: I believe that the new federal tax law will impact Metro significantly. The affordable housing industry believes that federal Low-Income Housing Tax Credits (LITCH) will be worth less and, therefore, financing large affordable projects may get more difficult. Article here. Similar, according to the Brookings Institute, financing infrastructure will become more costly for cities under the new tax law. Article here.

I think we will want to reconsider how to approach tax increment financing too. A rough rule of thumb for TIF projects is that the TIF loan might cover anywhere from 4-8% of the total project cost. But, the effective tax rate for most every real estate venture in America is likely going to drop by more than this amount. If real estate projects are about to be roughly 10% more profitable because of tax cuts, it begs the question of whether Metro should offer any TIF at all going forward.

Also, corporate tax rates generally just dropped dramatically. Again, this begs the question of what our incentives are worth now to companies. And it begs the question of whether Metro should offer incentives if we are having to deal with higher financing costs for infrastructure.

I don’t know the answers, but there are two things I feel strongly about. First, this is a developing situation and we may not know the impact on Metro for a few years. Second, I think Metro should proactively figure out how we will be affected and try to stay ahead of the impact.

Nashville General Hospital: My most recent post about this was Nov. 29. That post links to others from the last two years. My thoughts today aren’t much different than they were on Nov. 29. There’s just one thing I would add…

If I were allowed to choose a path forward I would want to re-boot whatever process is currently underway. My strong sense is that a whole lot of people have preconceived and conflicting notions about what the proper end-game should be for the hospital. What’s needed is an independent third-party subject matter expert (probably from outside of town). This person would need to have expertise in solving hospital financial problems AND also have the ability to act as a mediator. The person would need truly to have an open mind about where we will end up, and the person would need to be trusted enough to engage in shuttle diplomacy among the many groups. If the hospital is going to end up in a place where all or most of the constituent groups are going to be happy, I think it will need to be an outside person who guides us there.

Soccer: We all know by now that Nashville was awarded a new franchise. It’s very exciting.

Several important details were left to be dealt with after the franchise was awarded. Most notably, the Council will need to approve (by 27 votes) the demolition of some existing fairgrounds buildings before stadium construction can begin. Like with the administration’s Ft. Negley development plans, I’m going to guess that the 27 vote fairgrounds demolition legislation won’t make it to the Council until after the May 1 transit referendum.

Community Oversight Board: I wrote about this in early November. So far, not enough community-wide consensus-building has been done. I think that needs to happen before moving the legislation forward. I had hoped that Metro would hire Barry Friedman from the Policing Project to moderate a consensus-building process…but that doesn’t seem to have happened. I’m looking to learn more about the status in the new year.

Short-term rentals: In spring and early summer 2017, the Metro Planning Commission unanimously recommended Bill -608 and the Council was about to pass it in June.

Bill -608 got through the Planning Commission unanimously because it was a compromise. It allowed short term rentals in every building in Nashville with more than two units. It allowed short term rentals through all of downtown and the Gulch. It allowed every homeowner in Nashville to host short term guests in their primary residence. The only material trade-off was that we would phase out short term rentals in our traditional interior family neighborhoods with 1 or 2 homes on a lot.

In the second half of 2017, -608 has been re-positioned by the short term rental industry as extreme. I’ve stayed quiet on short term rentals in 2017 (except for a few discrete measures designed to stop cheating cheaters from cheating) and let the debate play out. When it comes time to vote, I plan to hear out my colleagues — especially the district Council members with large numbers of short term rentals — to see if they reach a consensus to move away from Bill -608. I think the majority of district Council members still believe that -608 has a good balance of allowing unlimited Type 1 (owner-occupied) and unlimited Type 3 (investor-owned in multi-unit buildings) short term rentals, allowing all short term rentals downtown and in the Gulch, while phasing them out of our traditional family interior neighborhoods.

Wrap-up: If I have forgotten an important issue, let me know at bob.mendes@nashville.gov. I’ll let you know what I think.

Update From 4/5 Council Meeting

I passed my first ordinance last night. I am probably over-happy about that. I’ve written about it before here and here. This ordinance changes the way Metro handles tax increment financing in three key ways – Metro will get its property tax revenue back more quickly, Metro will have more say in what projects get tax increment financing, and there will be greater transparency to show us how our tax revenues are being used by MDHA. The ordinance also authorizes MDHA to use the proceeds from the sale of 3 parcels of property in the Rutledge Hill Redevelopment District as part of the Cayce Place Redevelopment Plan.

Here are the other items of interest from the meeting:

Planning Commission Nominees: The Rules Committee was 10 minutes late for our 6:30PM Council start time because we asked so many questions of the Planning Commission nominees, Brenda Diaz-Flores and Brian Tibbs. I found both nominees to be well-informed and articulate about a wide range of planning, development, and housing issues.

For Ms. Diaz-Flores, we asked about her relationship with the Planning Department, where she used to work. We wanted to know whether she’d be able to transition to possibly voting against things that her former employer, the Planning Dept., was recommending. She was able to walk us through some specific positions that the Planning Dept. had taken while she was an employee that she would have voted against as a Commissioner. I liked that show of independence.

For Mr. Tibbs, who is an architect, we asked about the types of clients his architecture firm represents. He told us that his firm sometimes represents developers with matters before the Commission, and also does work for MDHA. Mr. Tibbs told us that he would recuse himself from votes where he or his employer had a financial interest in a project, or where his firm does work for an applicant before the Planning Commission. The Committee told Mr. Tibbs that we appreciated that he was sensitive to this issue. I’m glad he committed to recuse himself when he or his firm has an interest.

Though we had to run late to do it, the Rules Committee recommended approving both nominees. The Council approved both.

BL2016-133 (Inclusionary Zoning): This was on first reading. The Council deferred first reading for two meetings, to May 3. From my perspective, the two main camps – the housing advocate community and the development community – are engaged in the classic negotiating tactic called anchoring. That’s where you stake out an extreme position in the hopes of pulling the ultimate compromise position closer to you than to the other side.

On the housing advocate side, there is a significant subset that are arguing hard to just kill the inclusionary zoning bill and start over again. This is counter-intuitive, of course, since the same groups are the ones who initially pushed for inclusionary zoning last year. The “anchor” they have dropped is to argue that the current bill is so weak that it should just be trashed and, instead, the city should focus on creating a comprehensive affordable housing plan. We’ll see how this pans out. In my law practice, when you decide to anchor, you should be willing to accept the risk that everyone else comes to believe that you’ll never compromise and they choose to continue the conversation about compromise without you.

To me, the way forward is not an “either/or” situation. We can and should commit to have Nashville create a comprehensive affordable housing plan. But I think that we should also go ahead and pass some of the legislative pieces that we know we’ll need once a full plan is crafted.

The next step is that the Planning Dept.’s consultant is working on refining his proposals for the financial incentives that are need to make inclusionary zoning work. And, the Council’s Affordable Housing Committee has meetings set, I believe, on April 18 and 25.

RS2015-76 (Fairgrounds and Firearms I): CM Glover had a resolution that would have asked the Fairgrounds Board to rescind its decision to not have gun shows past 2016, and would have forced Metro to cut-off all capital projects funding for the Fairgrounds if the Board didn’t comply. CM Glover has said several times previously that his goal was to keep Metro from getting sued.

Unfortunately, about 30 minutes before Council Committee meetings started, a gun show vendor did sue Metro. I didn’t see a point to passing a resolution that was supposed to prevent litigation that now has already started. The Codes, Fairgrounds, and Farmer’s Market Committee saw things the same way and voted 3-2 to indefinitely defer the resolution.  That was Coleman, Shulman, and Rosenberg in favor of indefinite deferral, and Huezo and Swope against.

BL2016-161 (Fairgrounds and Firearms II): This was CM Glover’s bill that would have required the Fairgrounds Board to set aside 17 weekend days in 2017 for gun shows. This was deferred indefinitely at our last meeting.  For this meeting, CM Glover was using his one-time right to ask for the Council to place his bill back on the agenda. We voted against that – so that bill is now permanently defeated. For better or worse, the Davidson County Chancery Court is now going to be where the next chapters of this story unfold.

RS2016-172 (Supplemental Appropriations): This is a request for about $3.3 million in supplemental appropriations. At the Budget & Finance Committee meeting yesterday, it was clear that some of the supplemental appropriation requests are fully reasonable and are needed for positive, good reasons. And, some others are needed because there is a department or component unit of Metro that really isn’t performing financially as expected. This has been deferred to the next meeting in order for the Council to get more information about which supplemental appropriations require us to exercise additional oversight of a struggling department or unit.

RS2016-170 (Starbuck’s on West End where traffic backs up): Nashville is at the front end of multiple Starbuck’s locations seeking permission to sell beer. We approved one in Green Hills at the last meeting, and two more were up this time – including the one on West End near Vanderbilt across from Bricktops. If you are familiar with the location, that’s where there are always cars spilled out onto West End waiting to get in the drive-thru and often blocking buses and other traffic. This was deferred indefinitely to allow the store to work with Traffic & Parking to improve how that drive-thru interacts with traffic.

BL2016-140 and 141 (Carrolton Station, Men of Valor): With these two bills in CM Vercher’s district, the Planning Commission disapproved the changes to infrastructure and zoning that were being proposed. Metro Legal and Mike Jameson both advised that these two bills would be completely unenforceable if passed. Metro Legal had already advised Codes to disregard the bills if they were passed. Despite these strong legal admonishments, I think the whole Council really, really wanted to pass CM Vercher’s bills because they address serious traffic and density problems in this neighborhood. Because they were disapproved by the Planning Commission, these would have needed a two-thirds majority to pass. That didn’t happen and the bills failed despite CM Vercher’s strong, tenacious efforts.

I did not vote for either of these bills. I truly appreciate and agree with what CM Vercher was trying to accomplish, but with Metro Legal and Mike Jameson advising that the bills were simply not enforceable, I couldn’t vote in favor. It’s a longer story for another day, but the problem with this situation (and with CM Hagar’s quarry situation) is that the State of Tennessee changed the law about “vesting” property rights in January 2015. Nashville is going to have to figure out a way to adapt to that change in the state law, which allows property rights to be vested sooner than was possible previously.

That’s it. If you made it this far, thanks for reading. I appreciate it!

 

Bob