BROADWEST (former West End Summit), 36 story Conrad Hilton Hotel/condo tower, 22 story/510,000 sq. ft. office tower, 4 story/125,000 sq. ft. retail/office, 1 acre plaza, 2,500 car garage, $490 million

[NashRugger]

Sell it to Dallas-based Trammell Crow, they always get it done.

[FromParkAveToTN]

I hope the city uses eminent domain and take the land. That would be the prime spot for a Bergdorf's, Neiman Marcus, and a Bloomingdales. In addition,  I will be able to watch these three wonderful buildings being built from my office in the AT&T building.

[nashvillwill]

Honest question but HOW did this fail? I just can't fathom how even with tenants it would fail. Could he not get the financing for it? I just don't understand how it would take so long for nothing to happen, then HCA can get so much done so quickly at the new site.

I'm only going by memory here, but I remember hearing something (during the HCA proposal) that he was refusing to take on an equity partner. Banks wanted a partner for security, but he refused to take one so he could see max profit. I could be off base, but that's what I remember.

[Paramount747]

I'm only going by memory here, but I remember hearing something (during the HCA proposal) that he was refusing to take on an equity partner. Banks wanted a partner for security, but he refused to take one so he could see max profit. I could be off base, but that's what I remember.

Correct as I recall as well.

[titanhog]

I'm only going by memory here, but I remember hearing something (during the HCA proposal) that he was refusing to take on an equity partner. Banks wanted a partner for security, but he refused to take one so he could see max profit. I could be off base, but that's what I remember.

I guess he still hasn't figured out that all of nothing = nothing.

[Guest]

Honest question but HOW did this fail? I just can't fathom how even with tenants it would fail. Could he not get the financing for it? I just don't understand how it would take so long for nothing to happen, then HCA can get so much done so quickly at the new site.

My understanding of how it failed is largely in part to three separate contacts, all directly involved in the projects from very different points of view. This is my opinion based on the things told to me, but may or may not reflect reality.

#1 -- Greed. The project worked financially. The tenants were on board. The operator was on board. The design was more or less there. And the banks were happy. Not being satisfied with a complete filled project (single tenant + hotel) the development team pushed to make the project larger to accommodate spec office. This would provide them a better overall ROI.

This did three things; made the tenant (HCA) uncomfortable (they were changing the deal), made the parking design for the site unworkable (couldn't accommodate the extra cars in any scenario), and drove the cost way up requiring more equity (which they didn't have and the banks got upset).

#2 -- Loss of Credibility. As the promises got larger the ability to deliver on those promised collapsed. It started a downward spiral where the developers got at odds with the largest HCA tenants because the desires of the project were misaligned. All of the redesign costs started to mount. The schedule was slipping. The certainty started to break down. Then the design firms bills started going unpayed. Word started to leak that this was all a house of cards. As the overall picture became more clear Palmers team doubled down and started playing hardball. That is when I heard HCA started talking with Northwestern Mutual about the Capitol View site.

#3 -- Poison. Once HCA departed it was obvious in the construction community the project was dead in its previous conception. By all accounts I have heard Palmer himself became more combative and foolishly determined there was no way out but up. Issue is he has now stiffed several companies for large sums of money. Not only will he have to come up with new equity on a damaged reputation but he has to dig out of a giant financial hole. Various companies have come through offering fair market value for the site. He runs every one of them off. No one wants to touch the project.

#4 -- The energy shifts. Thanks in large part to the Music City Center the main focus of development shifts to the east and into the core. The West End address, not long ago the premiere office address in Nashville, no longer carries the same prestige. It may shift back, but the day isn't today.

So... tarnished combative developer in financial straights with a poor reputation and huge financial gap for the project doesn't make it look promising for anytime soon.

The story as I understand it.

Edited June 20, 2015 by Guest

[titanhog]

^^Would you say that he may not even be able to sell the land and get enough to pay the people he already owes?

[volsfanwill]

here is a proposal. build parking in the existing hole to ground level, have a nice park on top, and make money off of parking for a few years. he could have done this at any point.

[Guest]

^^Would you say that he may not even be able to sell the land and get enough to pay the people he already owes?

If he was willing to take a personal loss he could easily sell it and make everyone whole. The issue would be his internal metrics for how much is really invested.

[Guest]

here is a proposal. build parking in the existing hole to ground level, have a nice park on top, and make money off of parking for a few years. he could have done this at any point.

You may be underestimating the cost to construct structured parking.

[volsfanwill]

No, I know it is expensive, but it was part of the plan for the towers, so build the parking to support whatever you may decide to eventually build on top.  

[PruneTracy]

No, I know it is expensive, but it was part of the plan for the towers, so build the parking to support whatever you may decide to eventually build on top.  

 

I think the hang-up on that is that developers generally build the parking around the structural requirements for the building, not vice versa. If you go ahead and build out a car hole without a firm idea of the design of the structure above, you're likely to constrain its architecture, which could be a dealbreaker for an anchor tenant or buyer.

 

Parking in that area is also not terribly scarce so it's unlikely a structure would net a positive return. On its own, it's a sunk cost, and as I noted elsewhere Palmer threw enough money away demolishing and excavating the site before he had a done deal.

[TNinVB]

So with all this being said, what is the best option for the sight? If Palmer is running off offers and can't come up with money are we going to be stuck with a large hole in the ground? Can't Metro step in and do something? Please forgive me as I don't know all the ins and outs of development but as I understand it, it's Palmers ego that's keeping the eyesore undeveloped. And didn't someone recently say that new signs were being placed at the site? He's definitely determined if not delusional.

[SoundScan]

I imagine he will eventually run of out money to carry the ongoing costs of the property, or he'll be sued and forced to sell to pay back lien holders. Does anyone know the annual taxes for the WES property?

[UTgrad09]

I imagine he will eventually run of out money to carry the ongoing costs of the property, or he'll be sued and forced to sell to pay back lien holders. Does anyone know the annual taxes for the WES property?

According to the assessed value and 2014 tax rate, $151,528.06.

[titanhog]

Didn't he recently sell Palmer Plaza?  That money may have bought him some time and allowed him to pay some people to keep them from suing him...right?

[Jamie Hall]

And didn't someone recently say that new signs were being placed at the site?

Up until about 2 weeks ago, the lights on his sign at the WES site were about to fall off, and the sign still showed the faded WES rendering from bygone days. The lights were fixed and the old sign was either stripped off or painted over. But if he cares so much about keeping up appearances at the site, he should send somebody out with the WeedEater and chop down the weeds.

[smeagolsfree]

That picture says it all. Looks like it's back to the drawing board or hopefully to a realtor for the WES site. Is ASP going to learn that he can't get what he wants?

[PillowTalk4]

I think Palmer's ego is getting in the way of this site being developed by someone else.  It's a great site and I wouldn't be surprised that he hasn't had buyout offers from other developers by now.  I do think that the city should step in a put pressure on him to do something with the site before it starts creating issues for potential development nearby.  It seems to me that the blocks nearby would be of interest to developers by now.  I'm wondering if the big hole is having an impact on that interest because potential developers see it as an eyesore that may go unresolved for years to come.  There's just no reason for the blocks between Church Street and Broadway/West End not to have seen development consideration by now.  Unless I've missed some announcements of projects in that area.

 

I also hope that developers will eventually buyout the car lots on Broadway.  It's real estate that could be used far better than a new/used car dealership.  It's time for the auto dealerships and the White Kastles to go.  Just imagine how that area would be transformed with a couple of high rise office/residential/hotel/mixed-use buildings anchoring each corner. and stretching on each side with 10-20 story buildings up to the Broadway/West End split.  What an entry into mid-town that would create.

[dmillsphoto]

I think Palmer's ego is getting in the way of this site being developed by someone else.  It's a great site and I wouldn't be surprised that he hasn't had buyout offers from other developers by now.  I do think that the city should step in a put pressure on him to do something with the site before it starts creating issues for potential development nearby.  It seems to me that the blocks nearby would be of interest to developers by now.  I'm wondering if the big hole is having an impact on that interest because potential developers see it as an eyesore that may go unresolved for years to come.  There's just no reason for the blocks between Church Street and Broadway/West End not to have seen development consideration by now.  Unless I've missed some announcements of projects in that area.

 

I also hope that developers will eventually buyout the car lots on Broadway.  It's real estate that could be used far better than a new/used car dealership.  It's time for the auto dealerships and the White Kastles to go.  Just imagine how that area would be transformed with a couple of high rise office/residential/hotel/mixed-use buildings anchoring each corner. and stretching on each side with 10-20 story buildings up to the Broadway/West End split.  What an entry into mid-town that would create.

 

Agreed, and I think there are probably 30 pages of "Palmer's Ego is the cause" in this thread alone... not to mention the other forums. Welcome, by the way!

[titanhog]

I'm guessing a guy could buy land and sit on it as long as he wants...but it would seem the city could make him do something about the pit he's dug, being that it's an eyesore and health hazard (for more than one reason).

[dmillsphoto]

Palmer gets more money, this time from Goldman Sachs.

 

http://www.bizjournals.com/nashville/blog/real-estate/2015/07/west-end-summit-wells-fargo-out-goldman-sachs-in.html

[bhibbs]

fingers crossed

[chris holman]

Timing couldn't be any better if he could pull this off, hopefully with a Redesigned high end development, I won't hold my breath on this

[smeagolsfree]

Going to have to have a billion people with fingers crossed for him to pull it off.

BTW, the WES sign is down and has been for several weeks now.

Back to the drawing board with a new design too.