Update 2:55 p.m. – With a deal in hand, Lionstone Group has the green light to move forward with its Music Row Roundabout project and will do so even though the lending markets have gotten stingy.
“It’s full speed ahead,” said Crews Johnston, a broker with Colliers Turley Martin Tucker, which is working with Lionstone and will be a tenant in the office building. “Now we have a little catch-up.”
In addition to Colliers, architectural firm Earl Swensson Associates will help anchor the 1515 Demonbreun building.
Johnston said another tenant has lined up to take the total pre-leased space to 60 percent of the 250,000-square-foot office tower. He declined to disclose the name since the lease isn’t final. Market sources, however, say it’s likely First Tennessee, which has been looking to move several offices around downtown and West End into a single space.
Johnston also couldn’t talk about the financial structure of the deal and a Lionstone official could not be immediately reached this afternoon.
But the developer is sitting on a fund of $500 million that includes the pension fund for Oregon state employees. If needed, Lionstone could pay all cash for construction and take out a mortgage later when the lending markets improved.
As originally posted:
The eminent domain battle between Joy Ford and the Metro Development and Housing Agency ended late Tuesday night when the Country International Records owner accepted a deal that will allow her to keep her property.
MDHA had offered Ford the deal to keep her Music Circle building, but cede a portion of her parking to an adjacent $70 million office tower planned by Lionstone Group. MDHA awarded Ford additional property to make up for the amount she gave away.
The agreement was reached after several bargaining attempts, first by various developers, then by MDHA, which this summer amended its initial lawsuit issuing an eminent-domain claim. Ford’s building is in the Music Row redevelopment district, which opens the door for an eminent-domain claim over blight.
Ford’s Washington, D.C., attorneys with the Institute for Justice called the agreement a “magnificent victory for [Ford] and all Tennessee home and small business owners.”
“By challenging eminent domain abuse, Ford obtained a landmark agreement where she keeps her building and gets more and better land next to it,” Ford’s attorney Scott Bullock said.
The Ford case sparked outrage in Metro Council, which has filed legislation giving it oversight over all eminent domain claims by MDHA.