What's taking historic church redevelopment so long? Project risks losing $9M rebate
Developers risk losing a $9 million tax incentive for a delayed downtown Murfreesboro redevelopment plan that preserves a historic church.
Their project is called One East College. Developers with One East College LLC previously expected to start construction in early 2022 and finish by the end of 2024. The plan includes using the tax increment financing agreement in 2021 that rebates paid taxes to help fund a parking garage with 490 spaces.
Developers also plan to preserve the former First United Methodist Church sanctuary and bell tower that date back to 1888 for a restaurant or event center. They've torn down other parts of the church property but are yet to start on new projects that include apartments, residential condos, offices and bottom-floor retail spaces.
"We're still positive about the project and working hard to get it moving forward," said Brian Davis, president of TRC Construction Services Inc. of Brentwood. TRC is a One East College LLC partner with Onicx Development, which is led by Chief Executive Officer Dhvanit Patel.
Murfreesboro City Manager Craig Tindall said he and other staff members plan to meet with the developers in August to discuss getting started on the projects soon or face a default notice from the city pertaining to the tax incentive. The Murfreesboro City Council sold the church property and adjacent city parking lot to the developers in 2019 for $1.8 million.
If the project on 2.4 acres continues to be delayed, the city will notify the developers about being in default for violations of an agreement that includes the tax rebate money, Tindall said after recently briefing the council about the issue on July 13.
Murfreesboro officials also are pursuing the sale of property that surrounds City Hall and Linebaugh Library for a proposed Keystone mixed-use development that involves buildings for boutique hotel, apartments, condos, bottom-floor retail spaces and parking garages.
Redevelopment of downtown: Tax rebate may climb to $9M for redevelopment of historic church in downtown Murfreesboro
Tax rebate agreement also involves Rutherford County government
The One East College developers will either move forward with their building plans or find another developer for the project, Tindall said.
The tax rebate agreement is also with the Rutherford County Commission and the county's Industrial Development Board. IDB Chairman Bill Jones confirmed that his board has not discussed the development agreement issues involving the city.
"If there’s a default, that would be between the developer and the city," Jones said.
Jones noted that he can see the church property from the window of his office at Pinnacle Financial Partners building where he works as an area executive for services in Rutherford and Bedford counties.
"Everyone would like to see the property developed," said Jones, whose IDB initially approved a $6 million tax rebate in 2019 before increasing the incentive in 2021 to $9 million.
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One East College developers face pandemic issues
Murfreesboro Vice Mayor Bill Shacklett said he wants to see quality redevelopment on the available One East College space.
"All the downtown community would like to see something that's aesthetically pleasing and is economically viable," said Shacklett, who's part of a family Shacklett's Photography business in downtown area. He also attends First Presbyterian Church, which is across Spring Street from the One East College property.
The One East College developers canceled a previous plan to build a 110-room boutique hotel because of a lack of interest from a hospitality industry that struggled during the COVID-19 pandemic that started in 2020, said Davis, the TRC president.
After eliminating the hotel project, developers increased the plans for residential dwellings from 55 to 191. The offerings range from studios to two-bedroom units. A third bedroom could be added to a condo if a buyer makes that request, developers said.
"We are working with the city to move this project forward," Davis said.
The One East College developers still plan four new buildings with 163 apartments, 28 residential condos, offices and bottom floor retail spaces, such as for restaurants and stores near the city's downtown Public Square. The project also will provide a Murfreesboro police precinct in one of the bottom floors.
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Developers struggle to find demand for offices
One of the remaining challenges is finding demand for offices after many businesses have allowed more employees to work from home since the pandemic started, Davis said.
"The office market has been destroyed," Davis said.
Three of the proposed new buildings will be four floors. The other building will be 11-stories with plans for a rooftop restaurant and the residential condominiums above the parking garage. The tall building will be about the same height as the nearby Rutherford County Judicial Building, developers report.
The project also would offer 56 additional street-level parking spaces.
"We're working diligently to move this project forward," Davis said, "in an economically challenging time."
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Reach reporter Scott Broden with news tips or questions by emailing him at sbroden@dnj.com. Follow him on Twitter @ScottBroden. To support his work with The Daily News Journal, sign up for a digital subscription.
One East College redevelopment plan
Location: Former historic First United Methodist Church on East College Street in downtown Murfreesboro and adjacent parking lot previously owned by city
Total acres: 2.4
Year church sanctuary and bell tower were built: 1888
Preservation project for historic church and bell tower: restaurant or event center
Number of new buildings: 4
Planned uses for buildings: apartments, residential condos, offices, retail spaces and parking garage
Residential offering options: studio and two-bedroom units, and third bedroom available for condo purchases
Number of apartments: 163
Number of condos: 28
Number of stories for three buildings: four
Plans for bottom floors: retail and a Murfreesboro police precinct
Number of stories for other building: 11
Height comparison for 11-story building: About same as nearby six-story Rutherford County Judicial Center
Uses for 11-story building: 490-space parking garage with 28 condos above and a rooftop restaurant
Street-level parking spaces: 56
Source: One East College LLC development partnership
This article originally appeared on Murfreesboro Daily News Journal: Redevelopment of historic Murfreesboro church could lose $9M tax rebate
