In the aftermath of Giarratana Development failing to finalize its purchase of First Baptist Church property in SoBro, the religious body’s pastor says plans to expand with new buildings, announced in 2012, remain viable.
“Our mission is still very much focused on downtown Nashville,” said Senior Pastor Dr. Frank R. Lewis (pictured). “We will have a statement [regarding moving forward with expansion] very soon.”
Giarratana President Tony Giarratana notified FBC Board of Trustee members Monday he would not be able to close on the purchase of the site by the June 30 deadline. The developer wanted to build an upscale, full-serve Marriott hotel on the site. With the deadline having passed, the development company will lose its $1.23 million deposit.
“Hotel financing is complex, and while construction financing is currently available for hotels, we were ultimately unable to assemble the equity portion of the project’s capital stack,” Giarratana wrote to the church board.
Originally, the Nashville-based development company was going to pay about $11 million for the approximately 1.25-acre site.
Giarratana, whose company has two projects underway in Midtown (The Dallas on Elliston Place and an as-yet-unnamed building to be located at 22nd Avenue and State Street), said he feels the FBC site is the “best location for a full-service hotel” in downtown Nashville.
“If the church wants to sell its property, there will no doubt be other interested parties,” he said.
Lewis agreed, noting, “We own the most valuable piece of property in downtown Nashville. This door is closed but we’ll see what door opens next.”
The site, located between Seventh and Eighth avenues and running along Demonbreun Street across from the Music City Center convention facility, should remain attractive to other hotel developers.
“It is best suited for a hotel but well overpriced,” said Tim Stowell, managing partner for Corporate Real Estate Advisors.
Chad Grout, president of Urban Grout Commercial Real Estate, said Demonbreun Street, though still potentially attractive for a hotel, might not be as much so as was the case a few years ago. For example, a Westin is slated for the roundabout at Eighth Avenue, KVB and Lafayette Street.
“When the convention center was under construction, it was easy to believe that Demonbreun Street would be the front door of SoBro,” he said. “[But] as the area around the convention center has continued to attract developer interest — and with the new presence of the Omni Hotel [fronting KVB] — the south side of the Music City Center is gaining prominence very quickly."
Jan D. Freitag, senior vice president of Hendersonville-based hotel industry analyst STR, said Nashville is seeing its strongest fundamentals ever for the travel and lodging industry. However, he essentially agreed with Grout, noting, "I would not be surprised if the site ends up being a [hotel] that may be on a limited-service scale."
Barry Smith, president of Eakin Partners, said a hotel, and not a residential tower, might be the best option at the site given its proximity to the MCC.
"It’s a great site, but nothing 'special' as a condo site," he said. "I guess the city could use the property down the road if they wanted to add convention space or expand/replace the Bridgestone Arena."
Smith said the original $11 million pricetag is, seemingly, reasonable.
"That’s $200 a square foot, which is in line with other properties in the immediate area," he said.
In 2012, FBC announced its intention to undertake major additions to its campus but never gave a specific timetable as to a start. According to sources, the church will likely need the proceeds from a sale of the site Giarratana wanted to purchase to cover much of the cost of expansion.
Giarratana Development entered into a purchase option with First Baptist Church on Feb. 20, 2013. The company would later exercise the purchase option in August, which established the closing date as Dec. 31, 2013. Giarratana Development then exercised its option to extend the closing date until June 30.
The church property currently is home to a surface parking lot and a building housing The Next Door, a nonprofit ministry that provides assistance to women in life transitions and that will move to a new Midtown home in the next few months.