Berry Hill apartment deal second-biggest on record
Jan 14, 2015, 4:06pm CST Updated: Jan 15, 2015, 8:41am CST
Adam Sichko, Senior Reporter- Nashville Business Journal
New York buyers paid $61.2 million for the 23Hundred at Berry Hill apartment complex in Nashville, according to a deed filed Jan. 14.
That averages to $230,075 per apartment. By that measure, that's the second-largest price paid for Nashville apartments, behind only the Elliston 23 complex in Midtown ($287,000 per apartment, or $95.1 million total).
Sentinel Real Estate Corp. is the new owner of the 23Hundred complex, located at 2300 Franklin Pike in the fast-changing Melrose area, near 12South.
The complex, with 266 apartments, opened about one year ago. It's fully leased. It was a joint venture by Stonehenge Real Estate Group, run by local developer Todd Jackovich, and Bluerock Real Estate, whose corporate offices are in Manhattan.
The sale of 23Hundred at Berry Hill means that investors are picking up right where they left off. Last year, investors paid a record $1.28 billion for apartment and condo buildings in the region - a 70 percent jump from 2013.
"The critical element is this: It's not on West End. It's not in the Gulch. It's in an area that has incredible demographics, but that also is an emerging area," Lefler told me. "It shows the focus on Nashville is more pervasive than just those few areas."
If it comes to fruition, Afrakhteh's Midtown high-rise would provide just the latest jolt for that part of town - matching the height of two nearby proposed projects: a luxury apartment tower and another residential-hotel combo.
Reached Tuesday, Afrakhteh referred all questions to a spokeswoman. Through that spokeswoman, Afrakhteh declined to discuss the status of any financing. He also declined to disclose the project's total price tag.
The boutique hotel will occupy the lower half of the building, offering between 150 rooms to 175 rooms. Afrakhteh has not signed a hotel brand at this point, according to his spokeswoman, Deborah Danker, the owner of Danker & Danker Public Relations.
Danker said the number of residential units is "unconfirmed" at this stage. She said it is unclear whether the units would be condos, apartments, or some mix of both.
Afrakhteh is seeking a change in zoning for the project, a request that the Metro Planning Commission is scheduled to consider at its Feb. 12 meeting. The development is anchored at the corner of Broadway and 20th Avenue South. In total, Afrakhteh's plans encompass 0.7 acres.
The majority of that is the land where the Noshville restaurant is today; The Tennesseanreports that Afrakhteh has an option to buy that property. A Noshville official told The Tennessean the restaurant plans to open in the project once it is complete.
The remaining land is 1922 Broadway, a 0.16-acre site next door. Afrakhteh purchased the land in March 2013, for $1.1 million. Demolition of the century-old building at that address is underway.
Danker declined to discuss the project's timeline. She said the development will involve at least one new-to-Nashville concept: Concierge service for residents and hotel guests.
Every real estate professional wants to have the reputation for being "the agent that makes the most money for their sellers." But how exactly can you do that? First, I'm going to give you a real life example of a home that recently sold for $100,000 over asking price, and then I'm going to provide the three ways this stager and agent got a bidding war started while we view the before-and-after photos from Donna Dazzo of Designed to Appeal.
BEFORE By Designed to Appeal, designedtoappeal.com
1. Assess the home's market potential
Every real estate agent understands the various factors that come into play to determine the "comparables" for a property, but when a property is upwards of $200,000, there is a larger "staging potential" that comes into play. Recently, 2014 staging statistics show that professionally staged homes on average sell 10 percent higher than non-professionally staged homes. So what is that 10 percent worth to your seller?
For instance, in the above photo the agent would have an idea of the asking price of this home in it's current "unstaged" condition. But what about in its staged conditionâ€¦
AFTER Designed to Appeal, designedtoappeal.com
As you can see, the marketing of the home in both staging and photos has a dramatic effect on the outcome of the sales price. I call this the "buyer desirability factor" because the stager pinpoints the type of buyer we want and raises the "desire" for the space.
How can you assess the home's market potential? First you need to assess the reasonable sales price of the home in its unstaged condition compared to its competition. Next, you need to ask whether you may be able to raise the price of the home at least 10 percent in its staged condition. If that raised sales price is over $10,000 â€¦
BEFORE Photo credit: Designed to Appeal, designedtoappeal.com
AFTER Designed to Appeal, designedtoappeal.com
2. Coax seller "buy-in"
One of the biggest challenges for agents is getting the seller to understand the need for professional staging, as well as committing them to the sales process. Ask the seller, these few questions which will get them thinking about the quality of product they are putting forth and the dollar potential they are leaving on the table in the sale of the home:
Critical Question #1: What percentage of your home has not been remodeled in the last 5 years? Even though not all remodeling projects are equal, this question speaks to the relevance of this home and the design knowledge of the home seller, since interior design styles have changed drastically in the last few years.
BEFORE Photo credit: Designed to Appeal, designedtoappeal.com
AFTER Designed to Appeal, designedtoappeal.com
Critical Question #2: What percentage of your furnishings (particularly artwork) has been purchased in the last 5 years? As you can see from the before photo above (which is typical for most homes), most homes have dated furnishings which lowers the "buyers desirability factor" drastically.
BEFORE Designed to Appeal, designedtoappeal.com
AFTER Photo credit: Designed to Appeal, designedtoappeal.com
Critical Question #3: If you could make 10 percent more on the sale price of your home through professional staging, can I refer an expert home stager your way? Remember, statistically sellers who have their home professionally staged are making on average 10% more in this market than those who attempt to do it themselves. Sellers rely on their agents to educate them on the sale process and what they need to do to make the best price for their home. In this market, the seller who sells quickly but makes $30,000 less than their neighbor because they didn't stage will not be happy sellers.
3. Don't be afraid to tell the "ugly truths."
The ugly truth is that anyone who has watched the real estate market over the last few years knows there's no such thing as a "set price" for a home. The price is determined by what the buyer is willing to pay AND the buyer is willing to pay a lot more for a "model home" look. Stay tuned for next week's blog post for more of the "ugly truth's" in staging â€¦
As a small business owner, it is very important to me to support other small businesses and self-employed friends. I know the power of referrals and have been fortunate to rely only on them to grow my real estate business. So, I would like to pass it on and showcase a small business each month I have personally patronized that I love. My hope is that it may help grow their business and turn you on to someone you may not have previously known about.
This month that business is Josh Hailey. Josh is a terrific photographer and did our family photos this year for Christmas cards. He has a keen eye and does a wonderful job at capturing sweet moments and shots. Just an all-around good guy who is talented and reasonably priced. Check him out at http://mellowtown.com.
Swedish furniture giant Ikea will open a store in Memphis, its first in the Mid-South, the company confirmed late Monday night in a press release.
"IKEA, the world's leading home furnishing's retailer, will announce plans Tuesday morning for a proposed Memphis store," the press release stated. "The proposed IKEA Memphis would be the first IKEA store in either Tennessee, Arkansas or Mississippi, and would increase the Swedish retailer's presence in the Southeastern U.S."
The press release said that details of the plan, including exact location, size of the store, opening date and number of potential employees, will be announced at the 11 a.m. press conference Tuesday. Company representatives, plus Memphis Mayor A C Wharton and County Mayor Mark Luttrell, are scheduled to attend.
The late-night announcement confirmed a day of speculation about an Ikea project that surfaced Monday after Wharton's office scheduled a press conference for Tuesday in City Hall.
Each year for the last several years, I have used my end-of-the-year newsletter to say all that I am thankful for. And this year is no exception. I truly am a blessed man. And I know it. This year, I am especially grateful for:
- family. My wife, my two children, my family in Illinois, and my in-laws here in Nashville. I won't use too many superlatives, but I'll just say I am grateful for each and every one of them.
- Gracepointe and Rosedale, my two church families.
- my health. I had several good friends this year with health struggles, and I have been constantly reminded not to take mine for granted.
- my friends. The only complaint I have is I wish I had more time to spend with everyone. Definite new years resolution.
- an amazing first year for Post & Company. My best year as a Realtor coincided with my first year owning my own firm, and I know that doesn't happen often.
- physical challenges in 2015. Maybe another half marathon. Maybe another Avon Breast Cancer 39 mile walk. Hopefully dropping some lbs. Maybe all three. Gulp.
- Mexico in March. Already booked it and can't wait!
- Hot chicken. Then end.
- A still hot Nashville real estate market.
- Daunting but exciting new beginnings. We are contemplating moving next year, and while I am excited about it, the idea of moving makes me a little nauseous.
- The new golden age of television. I used to pride myself on not watching TV. But there are too many great shows not to. I love The Newsroom, Downton, Homeland, Modern Family, Justified, and Luther.
- My dream job and dream clients.
- The Cubs' chances in 2015. Quit laughing.
Thank you for your friendship, for your referrals, and for your continued support. I hope you have a wonderful Christmas and holiday season with your family and friends!
By Les Christie @CNNMoneyDecember 9, 2014: 9:29 AM ET
NEW YORK (CNNMoney)
In an effort to open up lending to more low-income and first time home buyers, Fannie Mae and Freddie Mac announced Monday that they will start backing mortgages with down payments of as little as 3% of the home's price.
But borrowers will still need to meet strict criteria first, the two government-backed mortgage giants said.
The new loans will only be doled out to those who buy private mortgage insurance, have a credit score of at least 620 and offer complete documentation of their income, assets and job status. And, to further mitigate risk, the agencies will require borrowers to receive home ownership counseling.
Both programs are for fixed-rate loans given to first time homebuyers and those seeking to refinance. Fannie will start backing the loans as soon as December 13, while Freddie will start offering them March 23.
The move should expand access to credit for first-time homebuyers, typically younger buyers who have not have had enough time to save a big lump sum.
Fannie and Freddie already back mortgages with as low as 5% down. And the Federal Housing Administration insures 3.5% loans.
Still, according to Mark Palim, who directs economic and strategic research at Fannie Mae, it's a welcome expansion of credit.
"It's not a radical departure from what we're doing now, but anything at the margins helps," he said.
The 3% loans from Fannie and Freddie should also offer some advantages over the 3.5% down loans offered by FHA, according to Palim.
For example, the FHA loans require borrowers to pay for private mortgage insurance premiums for the entire term of the mortgage -- typically30 years. That means adding an extra 1.35 percentage points to monthly mortgage rates. A loan carrying a 4% rate, for example, becomes a 5.35% mortgage.
In dollars, that's about an extra $80 a month for every $100,000 borrowed or $960 a year. That adds up to nearly $30,000 over the life of the loan.
Under Fannie and Freddie's programs, borrowers are permitted to cancel their private mortgage insurance premiums once the mortgage balance drops below 80% of the home's value -- either because they've made enough payments or the home's value has risen.
If home prices increase 5% a year for three or four years, for example, these borrowers may be able to cancel their insurance and save them tens of thousands of dollars over the next 26 or 27 years.
* 3,503 sq ft, 3 bedroom, 3 bath
* Spacious rooms, two fireplaces, possible 4th bedroom, ready for new owner's vision
* Loads of personality and not just another cookie-cutter home
* Lower level finished with fireplace, wetbar and full bath
* Pristine hardwood floors and custom blinds
* Private 2.5 acre wooded lot
* Attic with staircase - perfect for expansion
* Zoned for sought-after Percy Priest Elementary
Offered by Post & Company Real Estate
Mik... e Post, Broker
Apartments, retail coming to Colonial bakery site in Melrose
Getahn Ward, firstname.lastname@example.org 5:35 p.m. CST November 20, 2014
A previous conceptual perspective of Broadstone Germantown, which Alliance Residential plans. The company is pursuing another apartment building on part of the former Colonial Bakery site in the Melrose area.
Alliance Residential Co. is expected to be the developer of a 328-unit apartment complex planned on part of the former Colonial bakery site in the Melrose area.
The Phoenix-based multifamily developer is calling the apartments Broadstone Eighth South, according to a concept plan filed with the Berry Hill Planning Commission.
Alliance plans to buy a portion of the overall 6.41-acre site from local investment partnership Eighth South LLC, which two months ago paid up to $9 million for property at 2407 Franklin Pike.
In addition to the apartments, Eighth South plans a 71,000-square-foot separate retail building that's expected to have 340 parking spaces. The apartments will have 480 parking spaces.
Eighth South is seeking permission from Berry Hill's planning commission to consolidate the two lots that make up the property with plans to then partition the site into two parcels for the apartments and retail building.
The retail parcel would be 2.04 acres and the multifamily parcel would be 4.38 acres, according to the documents filed with Berry Hill official.
Under the concept plan, the four-story apartment building will mostly front Elliott Avenue with a section fronting Franklin Pike. The entire retail building would face Franklin Pike.
The former bakery site is split between Metro Nashville and the satellite city of Berry Hill.
In response to calls for preservation of the Southern magnolia tree in front of the bakery building, Eighth South said it is in talks with two individuals and a preservation group about moving the tree elsewhere. "That would be a win-win situation for everybody," said Bobby Kirby, a partner in Eighth South.
Earlier this month, Alliance also paid $5.15 million for property in Germantown where the multifamily developer plans its first Nashville area apartment project. Broadstone Germantown is expected to have 275 units.
Reach Getahn Ward at 615-726-5968 and on Twitter @Getahn.
A massive Beverly Hills, Calif., estate with its own entertainment complex, 27-car garage and vineyard has hit the market with a record breaking listing price of $195 million.
That makes it the most expensive home listing in the United States, according to Coldwell Banker.
Called the Palazzo di Amore (or "Palace of Love"), the estate is enormous with 53,000 square feet of living space, 12 bedrooms and 23 bathrooms. The master suite alone -- at 5,000 square feet -- is bigger than most McMansions.
On the 25-acre property, there's a vineyard that produces 400 to 500 cases of syrah, cabernet, sauvignon blanc and other wines each year. There's also a guest house, formal gardens, a spa and a 128-foot long reflecting pool.
The estate is owned by real estate mogul, Jeff Greene, who bought the place as an investment and rents it out for $475,000 a month. In fact, Greene barely spends any time at the Beverly Hills estate, instead preferring to spend time at his home in Palm Beach, Fla., or at his summer house in the Hamptons.
Visitors arrive through one of three sets of double gates and drive a quarter mile to the front entrance, where they encounter an Italian-made fountain carved of Carrara marble.
They can park pretty much anywhere. The estate has a 27-car garage and 150 additional parking spaces.
The main residence is more than 35,000 square feet with a front entryway that is a grandiose display of statue niches, inlaid marble floors, classical revival pilasters and a double staircase of marble and ornamental metalwork.
Don't feel like climbing the stairs? Take the elevator.
The Palazzo di Amore was made for entertaining.Not only can it accommodate 1,000 guests, but it also boasts a 50-seat theater, a bowling alley and a game room. There's also space to host a seated dinner for 250 guests.
The ballroom is outfitted with laser lights, a DJ booth and a revolving dance floor. It also features a trompe l'oiel, sky-dome ceiling with more clouds painted on it than the typical Southern Californian sees in aday. There are expansive views of West Side of Los Angeles, Century City and the ocean beyond.
The family room, with its parquet floor, built-in cabinets, fireplace and comparatively modest dimensions, is perhaps the coziest room in the house.
And any vineyard must have its own wine cellar and tasting room. This one has space for 3,500 bottles. If that's not enough space, there's a more utilitarian wine vault downstairs that holds 10,000 more bottles.
Without a doubt the Palazzo di Amore has a lot to offer, but can it bring in the full asking price?
Exact comparable sales are hard to come by but a similarly sized mansion in nearby Holmby Hills sold for $102 million in March, according to the record for Los Angeles County. The property, however, was on the market for years and sold for $23 million below the asking price.
Robin Williams' $30M vineyard estate
And it was only on five acres of land. "This property is five times the size of that," said Stacy Gottula, the Coldwell Banker Previews International real estate agent who, along with colleague Joyce Rey, is showing the estate.
Several other similarly sized mansionshavesold over the past few years in the Los Angeles area but none for more than $100 million, according to Jonathan Miller, an appraiser with Miller Samuel in New York.So asking for nearly twice that amount may be a stretch, he said.
"What's unusual is the estate size," he said. "Still, $195 million is a huge number."
Gottula said that several people have inquired about buying the Palazzo di Amore over the past few years while it was being rented out.
The name sounds catchy, even cute: the "blight bundle." Its contents, however, are far less appealing: 6,350 properties -- mostly abandoned homes in disrepair and overgrown vacant lots -- peppered across the city of Detroit.
No one was really expected to buy the so-called Detroit blight bundle when it entered the Wayne County tax foreclosure auction earlier this month. But someone did.
A group of developers led by Herb Strather put in a $3,183,500 bid -- just over the required minimum -- for the 6,000-plus properties and won the lot as the only bidders when the auction closed Tuesday afternoon.
16170 Washburn is included in the blight bundle. Courtesy Motor City Mapping.
Strather is one of the partners in Detroit Bundle LLC, along with Texas company Eco Solutions and others. He is also the chairman of real estate development firm Strather Associates and runs a real estate school "creating the next generation of developers in Detroit." This latest venture germinated as part of a class about online bidding at his Strather Academy.
"We were rather shocked [by the sale of the bundle]," Strather told The Huffington Post. "We turned on a dime, if you will, and decided to be the bidder, because we were concerned. We wanted to make sure the redevelopment of Detroit was in Detroiters' hands."
Strather said he has about two dozen students who will be working on the properties.
"They're going to add a lot of great value to the development project by doing a lot of sweat equity," he said.
The sale of the Detroit properties is not final yet. Winners in the county tax auction must pay 10 percent of the total price the day after winning, and the rest is due within 14 days.
Strather and his partners have more requirements to meet: Within six months, they must demolish all the blighted properties and have development agreements with the county for any deemed salvageable. If they fail to meet that timeline, ownership for all the properties could revert to the county.
Red dots indicate properties included in the blight bundle; blue indicates other properties in the tax auction. Map courtesy Why Don't We Own This?
Why does it seem so impossible? Because it was pretty much meant to be. The properties were bundled to discourage speculators from buying them individually. If Strather's group hadn't bid, vacant lots and houses in good shape would have gone to the Detroit Land Bank, where the sales agreement makes more demands on the buyer, and the blighted properties could be dealt with more efficiently.
"This process will speed the demolition of properties that continue to be a cancer in Detroit neighborhoods," Mayor Mike Duggan and Wayne County Treasurer Raymond Wojtowicz said in a statement when they announced the blight bundle.
16868 Monica is included in the blight bundle. Courtesy Motor City Mapping.
It was assumed that no one would want to take on the behemoth of 6,000 properties and that they would go directly to the Land Bank without bids.
"Now what we have to do is find out if indeed this group is serious about taking on such a task. And if they're willing to do so, we're willing to listen," Wayne County Chief Deputy Treasurer David Szymanski said.
In the next two weeks, the county will be working closely with the developers to attempt to come up with a plan that satisfies all parties, Szymanski said.
11203 McKinney is included in the blight bundle. Courtesy Motor City Mapping.
Strather said they had surveyed a large chunk of the properties so far. Szymanski told the Detroit News that 2,000 were vacant lots and about 3,000 would likely need to be torn down -- an undertaking that's bound to be pricey. The average $500 per property may sound like a steal, but that doesn't factor in the millions more that will be needed for demo and rehab. At Detroit's average demolition cost, it would take $30 million to tear down the blight.
3964 Jeffries is included in the blight bundle. Courtesy Motor City Mapping.
Strather, however, seemed beyond enthusiastic about the challenge that lies ahead.
"I think I was born to do it," he said. "The idea of redevelopment in my community would be a work of love."
1338 Beard is included in the blight bundle. Courtesy Motor City Mapping.
And if it's a work of love that can't be completed in six months?
"With 6,300 properties, we'll probably give them a few extra days," Szymanski said dryly.
UPDATE: Oct. 30 -- Herb Strather and his partners made the Wednesday afternoon deadline to pay the initial 10 percent of their bid for the 6,350 properties. At a press conference held earlier that day, Strather spoke with passion and even shed a few tears while talking about rebuilding Detroit. However, he did not release extensive details about his development plan for the 6,000 properties, in part because he is still negotiating with the county.
Strather emphasized the importance of neighborhoods and community-led development, saying that every neighborhood in Detroit deserved a sit-down restaurant, retail shops and new housing. He said he believes it's "homeowners first" and said if any struggling families were currently residing in the properties he would work with them. He also plans to work with community groups and individuals who had earlier plans to buy vacant lots included in his bundle.
"We have the chance to arrest the decay and rebuild," he said.
A potential issue with Strather's plan arose when he addressed his blighted properties. He referenced using public dollars by working with the Detroit Land Bank and accessing the federal funding they've used to raze abandoned buildings. But the demolition funds could legally only be used for properties owned by the Land Bank, a spokesman told the Detroit Free Press. Strather said demolition would take much longer than the required six months, which would only be allowable if the county agrees to new terms.
Realtor spotlight: Mike Post, broker,Post & Co. Real Estate
Bill Lewis 11:04 p.m. CDT October 18, 2014
Mike Post, broker, Post & Co. Real Estate
Mike Post, broker
Post & Co. Real Estate
501 Ligon Drive, Nashville 37204
Years in business: Eight
Describe the company and explain what makes it unique. How did you become involved in real estate? Post & Co. is a boutique residential real estate firm working with buyers and sellers all across Middle Tennessee.
We are located on Ligon Drive in Berry Hill. We strive to be forward-thinking and unique in areas like marketing, communication, branding, service and technology.
Every home has a story, and with each listing, we ask the owners to hand write, in their own words, a "home bio." They share intangible and personal specifics about the home that are more than just the square footage and number of bedrooms. We then incorporate the bio into a "home movie" presentation with professional pictures and video to highlight the home's charm and uniqueness.
All of our listings have lighted real estate signs so a home is always selling itself, day or night. We have a company truck that we purchased for the sole purpose of allowing clients to use it, free of charge, when moving. We hire a stager to prepare each home for professional pictures and for showings. And we have even begun incorporating drone photography and video into our marketing.
I began in real estate eight years ago, and I worked with David Pearson Real Estate in Green Hills. David is a mentor and a great friend, and I knew I had found my calling with the first client I ever helped buy a home.
Where in the Nashville region are you active? I am most active and specialize in Davidson and Williamson counties, but I have also had closings this year in Wilson, Cheatham, Sumner, and Maury counties. In short, I go wherever my clients want me.
When selling a home, what can the owner do to maximize its value? The moment a homeowner decides to list their home for sale, it becomes a product. The way a home is sold versus how a person lives in it is vastly different.
It's best to appeal to as many prospective homebuyers as possible. This means decluttering, using neutral colors, and possibly â€‹removing furniture to help it feel as spacious as possible.
The first impression is vitally important, and the walk from the car to just inside the home entryway is where prospective buyers are often won or lost. A freshly painted front door, attractive landscaping on the front of the home, and a good smelling home (without five Glade plug-ins immediately overpowering you) can make a big difference.
Also, making sure the listing looks as attractive as possible online with outstanding pictures and videos will lead to more showings, which will ultimately lead to more interest and a higher sales price.
What advice do you have for clients who are preparing to buy a home? What steps should they take? I think the two most important steps any buyer can initially take are to work with a Realtor they trust and find a lender that can help them navigate the preapproval and mortgage process.
My advice for clients is to look and explore as much as possible. Go to open houses. Look at homes in areas you don't know as well. Look online at as many listings as you canâ€‹. Drive streets at night to see how they feel.
And when you finally find "it," move quickly and decisively. In most cases, you will be competing with many other buyers, so overnegotiating or being indecisive will likely mean you'll lose the home to another buyer. â€‹
How is technology changing the way people buy and sell houses? Technology is helping buyers and sellers, but it comes with a risk of information overload. A home search now almost always begins online. Apps, maps and websites are all available and screaming for attention.
Technology and all of this information at buyers' fingertips helps sellers get their home seen by as many people as possible. And it helps buyers be aware of new listings instantly. Zillow and Trulia are two of the most popular real estate sites, and ironically, two of the least accurate. But all of â€‹the information that's available to the public, when used correctly, means buyers and sellers are better informed and can make better decisions in their buying and selling.
What features are the most popular with today's buyers? Buyers today want open space, shorter commutes, less square footage but a very usable floor plan, updated kitchens, and usable outdoor space.
What is the hallmark of the service you provide to your clients?
I focus on providing the best service I can rather than just selling my clients something. I am a no-pressure Realtor, and my goal with every client is to work with them for life.
I am honest, and I promise to always put their needs first. I am patient, not pushy. I call and email and text back promptly. And I focus on service more than the sale.
Nashville and its economy are on fire, sparked by a booming cultural scene, world-class health care, rising universities--and a really good spot on the map
It was, I think, the hum. At Midday recently at Joe Ledbetter's BrickTop's restaurant in Nashville a busy spot on West End Avenue near Vanderbilt University and the city's Music Row the Tennessee state commissioner of economic development was lunching nearby, at a table adjacent to the head of a private K-12 school. The rector of the city's largest Episcopal church sat in one corner near the general counsel of a huge privately held technology company that migrated to town from the West Coast a decade ago; the head of a major private-equity firm was in a booth across the way, debating between the bistro chicken and the Cobb salad. Absorbing the scene, a visiting out-of-towner looked up from his iced tea and shook his head with an admiration that bordered on envy. "This place," he said, "just sounds prosperous."
So it did and so does Nashville, where my family and I moved from New York in 2012. In the buzz, the visitor heard what Jay Gatsby heard when he listened to Daisy Buchanan, whose voice, Fitzgerald wrote, was "full of money." Loud but not deafening, energetic but not frantic, the BrickTop's vibe is a kind of running fever line tracking the upward mobility of a city so culturally and economically hot that parents at kids' basketball games joke about how the only place to go is down. The story of Nashville's current prosperity is a case study in how to make the most out of organic advantages. The specific factors behind its rise aren't readily transferable, but the larger lessons about what works are. Chief among the takeaways from the Music City's revival: culture is commerce.
Middle Tennessee is one of at least a dozen red-hot but sometimes overlooked regions that have successfully pulled themselves out of the Great Recession and into a broad, rising prosperity. Though the ingredients for the booms are often similar, each region has a different recipe. So what's Nashville's secret?
Tommy Frist, a son of Hospital Corporation of America's (HCA's) founding Frist family, who left Nashville in the late 1980s but returned a decade ago to work and raise his own family here, ticks off "four buckets" that he believes contribute significantly to the city's good fortune. There is employment stability in health care, entertainment, higher education and government. There is the wealth effect of ownership that extends deep into the ranks of some large enterprises, such as HCA, Ingram Industries and Dollar General, and those people and their money generally stay in middle Tennessee. There is a single metro government, thus reducing friction in governance and facilitating more private-public partnerships. And there is the more ineffable but no less real issue of livability. "Nashville is a soulful city in a way that Charlotte or Atlanta just don't seem to be," says Frist. "The vibe is cool, but it's warm and comforting too."
In some ways the current boom can be traced to a conversation at the Masters Golf Tournament that took place nearly half a century ago with legendary Nashville banker Sam Fleming. There Frist's grandfather and father, Drs. Thomas Frist Sr. and Jr., and Jack Massey, who was part of the deal to buy Kentucky Fried Chicken from Harland Sanders, talked over the economic virtues of privatized hospitals built to accommodate the growing Sunbelt. They saw an opportunity to professionalize the management of, and attract capital to, a heretofore cottage industry.
They were right, and HCA was soon born. The Nashville Healthcare Council has published a "family tree" of more than 500 companies, many of them spun off from HCA, Vanderbilt University Medical Center and HealthTrust, a cost-management company partnered with 1,400 hospitals that is itself an HCA descendant. More than 250 health care companies remain in the city, including 13 publicly traded companies directly employing over one-eighth of the city's workers and putting $30 billion into the local economy annually. HCA has bounced back from a massive health care fraud settlement, and the sector has experienced overall growth of over 63% since 2000 and employment growth of nearly 20% over the past decade.
Then there's music, a primal element in the life of the city. In the 1960s, a young Columbia Records staffer named Kris Kristofferson flew a helicopter into Johnny Cash's backyard in a Nashville suburb, recording demos in hand. In 1973 a drunk, depressed Willie Nelson left the downtown honky-tonk Tootsie's late one night to lie down in the middle of a snow-covered Broadway hoping to get run over. "It was a town of characters for a long time," says Don Cusic, a leading country-music historian and a music-business professor at Belmont University. "They haven't disappeared, but it's so corporate now."
The shift from chaos to corporatism might be bad for adding to lore and legend, but it's been fabulous for the bottom line. The music and entertainment industry provides $10 billion to Nashville's economy annually, sustaining more than 56,000 jobs. "It's like high school with money," says Gary Overton, CEO of Sony Music Nashville. "We all know each other. We know the spouses. We know the dogs. Our kids go to school together."
Taylor Swift's story blends the old and new Nashvilles she arrived because of the former and stays because of the latter. "I decided to move to Nashville when I was about 10 years old," Swift tells Time. "I was obsessed with watching biography TV shows about Faith Hill and Shania Twain, and I noticed that both of them went to Nashville to start their careers. From that point on, I began relentlessly nagging, begging and pleading with my parents to take me on a trip there. When I was 11, my mom took my brother and me to Nashville on spring break, and we drove up and down Music Row." By the time Swift was 13, she had a development deal and her parents made the move from Pennsylvania.
Swift has not considered decamping to Los Angeles or New York City as her star has soared. "Choosing to have my management company based in Nashville just made sense because my family is there as well as my record label," she says. "I never think about moving home bases. It's hard to describe why you consider a town your home base, except that when people ask me, Where's home?' I don't even think before I say, Nashville.'"
Swift loves the Nashville code: the city leaves its stars alone. "The cool thing about spending time in Nashville is that no one knows when I'm there," she says. "In New York and L.A., there are photographers waiting on the street, and it seems like every errand I run is photographed and documented. You don't see as much evidence of me spending time in Nashville because I'm not being photographed at the grocery store."
In the beginning, however, there was not music but education and lots of it. Nashville's first pass at branding was not Music City but the Athens of the South, a designation that recognized the high concentration of colleges and universities and a civic fondness for classical architecture. Beyond the aesthetics, the education sector is hugely significant. "It's a really powerful, synergistic relationship," says Vanderbilt chancellor Nicholas S. Zeppos, whose trajectory reflects Nashville's culture of organic growth. Zeppos went to Vanderbilt to teach in the law school, rose to become provost and now presides over one of the hottest schools in the U.S. (A word of disclosure: I am a visiting faculty member at Vanderbilt.)
Nashville is home to more than 100,000 students and 21 higher-education institutions, with 60% of graduates choosing to stay in the area. The leader is Vanderbilt, the second largest private employer in the state. Middle Tennessee State University, which has more than 24,000 students, pumps over $1 billion of revenue and nearly 12,000 jobs into the Nashville area. Belmont, which hosted a presidential debate in 2008, has more than doubled its enrollment since 2000, and its music-business program serves as a pipeline to Music Row.
The political element in Nashville's rise offers powerful evidence that reflexive partisanship is bad for business. Under the mayoralties of Democrats Phil Bredesen (who went on to serve two terms as governor), Bill Purcell and Karl Dean, Nashville has become the richest city in the most Republican of states. Part of the secret is that metro elections are nonpartisan. For the mayor and council members (there are 40 of them), there is a general election, and if you don't get 50% of the vote, there's a runoff. "It truly is nonpartisan there's no party labels, and people don't talk about it," says Dean, the current mayor. "Historically, the city is just very moderate."
And very lucky in its political leadership. Purcell, Bredesen and Dean have given the city several decades of shrewd service. In the early 1990s, BellSouth (now AT&T) built the "Batman Building" as its regional headquarters in downtown Nashville. The building, the tallest in Tennessee, has become the anchor of the city's skyline. Bredesen also pushed ahead with plans for what would become Bridgestone Arena, without knowing what team or sport it would field. "We just went ahead and almost like a leap of faith put up this really monumental and iconic arena," says Steve Turner, a local entrepreneur and philanthropist.
To bring the NFL to town, Bredesen wooed Houston Oilers owner Bud Adams with the promise of a free, brand-new stadium, a $29 million relocation-fee sweetener and 100% of stadium-related revenue. A prominent family, the Ingrams, agreed to move one of its distribution facilities down the river to make way for what would become LP Field, home to the Tennessee Titans. At about the same time, Nashville changed its zoning codes, allowing residential projects in much of downtown that had been blocked off since the mid-1970s.
In 2010, with construction under way on the nearly $600 million Music City Center, Nashville offered huge tax incentives to attract a luxury hotel, eventually hauling in the $268 million, 800-room Omni. The hotel shares a lobby with the Country Music Hall of Fame and Museum, which will double in size in the midst of this year's $100 million fundraising campaign. The expanded music shrine may bring even more visitors to town. The current tourist boom helped area hotels book nearly all their rooms on 31 weekends in 2013.
Generating growth is one thing. Sustaining it is another. Tennessee has no income tax a great starter for attracting businesses and new residents but not a great finisher for raising large sums for public-sector investment, particularly for education, a longtime area of concern. One thing about prosperity is that it tends to put a city's vices as well as its virtues on vivid display. Over 72% of students in metropolitan Nashville's public schools are economically disadvantaged. Only a third of elementary- and middle-school students meet grade-level standards in math, and 2 out of 5 meet the grade level in reading. Nashville is now on the map for education-reform activists, largely because in 2010 Tennessee was one of the first two states to win a Race to the Top grant, receiving $500 million over four years from the federal government. Dean considers education one of his top two priorities for the future. (The other is transit, and his plan to connect the city's east and west sides through a bus rapid-transit line has ignited fierce debate.)
On any given day at BrickTop's, usually over deviled eggs and sugar bacon a specialty of Ledbetter's there are reformers and politicians and bankers and artists and academics talking about all of this and more. Nashville has done a masterly job of assessing what's right in front of it the health care story, the music story, the higher-education story and then figuring out how to use those stories to create appealing lives and livelihoods. And the city has managed all this with more than a little grace and graciousness; rough edges tend to be smoothed out by an ethos of manners and hospitality. Running into neighbors and new colleagues in the bar that connects the front door to the dining room, newcomers to town hear a common refrain. "We're glad you're here," people say words that ring true amid the buzz of good times and that help explain why so many folks are glad to be coming to a big civic party that shows every sign of having only just gotten started.
With reporting by Alex Rogers/Washington
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Correction: The original version of this story incorrectly described the driving force behind the project that would become Nashville's Bridgestone Arena.
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