'Why open the flood gates now?' Developers propose hundreds of downtown apartments

Developers seek to build up to 471 apartments in two mixed residential and commercial projects proposed for downtown Murfreesboro.

The proposed urban apartment buildings that would change the landscape of the historic downtown area concerns elected City Council member Shawn Wright.

"I want to keep the downtown feel," said Wright, a real estate broker who's worried the apartment buildings will lead to a trend for other developers. "Downtown is the only area of town that doesn’t have massive apartment buildings. Why open the flood gates now? We could have 800 to 1,200 apartments within two blocks of the Square."

One of the proposed projects is for the $175 million Keystone development that would surround Murfreesboro City Hall and Linebaugh Library. Keystone developers seek to build 239 apartments in two buildings, a 80 to 100 residential condos in another building, a boutique hotel with 80 to 150 rooms, and 780 parking spaces either in two garages or on ground level near Broad, Church and Vine streets.

The other project is for the delayed One East College redevelopment of a historic church property. One East College developers propose to preserve the sanctuary and bell tower that dates back to 1888 to use either as a restaurant or event center space. They have previous council approval to build 163 apartments but want to add 69 more to replace plans for offices, city staff reported to the council.

The One East College developers also want to reduce plans for the size of an 11-story building that includes a 490-space parking garage that's below 28 condos and a rooftop restaurant, according to city staff.

Although city officials are leery of the delayed One East College project adding 69 more apartments to previously approved plans, the majority of the seven-member council appear to be in support of the proposed Keystone development.

Both projects also involve bottom floor spaces for restaurants and retail shops, such as with 30,000 to 40,000 square feet with the Keystone proposal.

A 'new face' for downtown: Proposed Keystone project includes hotel, condos, apartments

Keystone project awaits development agreement from city

The development agreement on the Keystone project may come up by an Aug. 31 council meeting, staff told the elected officials.

Mayor Shane McFarland, Vice Mayor Bill Shacklett and fellow council members Jami Averwater and Kirt Wade spoke in favor of the Keystone project during an Aug. 10 meeting.

"I think this is a good use for the property," said McFarland, who owns a construction business with an office in downtown Murfreesboro. "This is a true mixed-use development."

The mayor also said he doubts the city will see 700 to 800 apartments coming to downtown.

"I'm not an advocate for any more downtown units than what's being presented," McFarland said.

The mayor expects the Keystone project to bring in residents to support downtown businesses. He also said he'd rather have a large apartment complex managed by one group than 80 Airbnb vacation rental properties in operation in downtown Murfreesboro.

Shacklett suggested he was "excited" about the Keystone project.

"It's going to be a game changer," said the vice mayor, who's part of a family Shacklett's Photography business that operates on the city's downtown Public Square.

Averwater said she loves the overall Keystone project.

"I think this is awesome for downtown," said Averwater, an attorney who does real estate title work.

Wade noted that the Keystone project goes well with the city's daylighting of Town Creek project from underground pipes. The creek project on the southwest side of Broad Street across from Murfreesboro City Hall includes plans for trails by the creek, a proposed recreational splash pad and a pedestrian bridge that crosses Broad by Church Street.

The Keystone project will provide residents with opportunities to walk to restaurants and enjoy downtown, said Wade, the owner of Price Paving.

"We want a downtown where people can live downtown and work downtown," Wade said after the meeting. "We want a vibrant downtown."

Fellow Council member Austin Maxwell agreed with Wright in opposing the apartments.

"I don't want 700 to 800 apartments in downtown Murfreesboro," said Maxwell, a pharmaceutical marketing executive who's also chairman of the Rutherford County Republican Party that has an office in downtown Murfreesboro.

Fellow council member Madelyn Scales Harris was absent from the Aug. 10 meeting.

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Keystone project seeks tax rebate that's up to $26 million

Both projects also involve tax increment financing that provide developers with property tax rebates to help pay for public infrastructure. One East College has an approved $9 million property tax rebate from the Murfreesboro and Rutherford County governments to help fund the current 490-space parking garage plan.

The Keystone developers seek an up to $26 million tax rebate from the city, Rutherford County Industrial Development Board and Rutherford County Commission.

The proposed annual rebate to Keystone would be nearly $1.3 million, and that would continue until the proposed tax incentive reaches a cap of either $26 million or 20 years, city staff reported to the council.

The proposed Keystone tax increment financing agreement would be a rebate to help fund on-site improvements to the development, such as building sidewalks, two parking garages with 715 spaces and 65 additional parking spaces near the streets, said Sam Huddleston, an assistant city manager for Murfreesboro.

The proposed Keystone development agreement also includes the city reimbursing the developers to complete the realignment of the Broad Street intersection with Front Street on the southwest side and Vine Street on northeast side, Huddleston said.

Both Maxwell and Wright were elected after the council approved the development agreement for the One East College plan. Both oppose the tax rebate for apartments.

Maxwell said he has concerns the Keystone project would generate less in property taxes for the city than the rebate.

"So why are we doing it," Maxwell said.

City leaders worry about apartments: Murfreesboro officials weigh in on plan for hundreds of downtown apartments along this street

City leaders hope to attract downtown hotel

While the One East College developers canceled their hotel plans, Keystone developers say they can build a boutique hotel off Broad and Vine streets with 80 to 150 rooms.

Council member Wade suggested he'd like to see a higher standard downtown hotel "taking Murfreesboro to another level." He mentioned wanting a downtown hotel that's similar to The Harpeth, a "Curio Collection by Hilton" operation in Franklin.

The city has older motels along Broad Street. Most of Murfreesboro's hotels are near Interstate 24 interchanges with Old Fort Parkway, Church Street and Medical Center Parkway.

Downtown Murfreesboro previously had a four-story Polk Hotel that opened in 1929 on East Main Street between Spring and Academy streets. Demolition workers tore down the Polk Hotel in 1977 at a location where a Truist Bank now operates.

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Mixed-use developments both involve city property sales

Both projects involve the sale of city property. One East College developers paid $1.8 million in 2019 to buy about 2.5 acres that included the historic former First United Methodist Church and an adjacent city parking lot.

Keystone proposes to pay $5 million for 7 acres that include the former Murfreesboro Police Department headquarters, and the current administrative offices for Murfreesboro Fire Rescue and Water Resources before those staffs relocate to two buildings the council purchased.

Wright wishes the city's standard for selling property was for commercial uses, such as when the council sold land for Ascension Saint Thomas Rutherford Hospital, Murfreesboro Medical Clinic, the Vanderbilt's Children's Surgery and Clinics and the Fountains at Gateway off Medical Center Parkway.

"I don’t think the city should be selling land to an apartment development," Wright said.

Once the city allows large apartment buildings in downtown Murfreesboro, "it becomes harder and harder to turn them down (for zoning) when they come," Wright said.

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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.

Proposed Keystone mixed-use development facts

• Location: property surrounding Murfreesboro City Hall and Linebaugh Library in downtown Murfreesboro off Broad, Vine and Church streets

• Boutique hotel: 80 to 150 rooms

• Two apartment buildings: 239 rental units

• Building with with residential condos: 80 to 100 units

• Parking plans: 780 spaces in either two garages and on ground level near Broad, Church and Vine streets

• Bottom floor commercial spaces for restaurants and shops: 30,000 to 40,000 square feet

• Estimated value of development: $175 million

• Acres: 7

• Sale price for city property to developers: $5 million

• Property that would be sold: former Murfreesboro Police Department offices; current Fire Rescue and Water Resources offices that will be relocating; other city buildings

• Note: WGNS would relocate from westside of Church Street to eastside in a new building in a private arrangement with the Keystone developers

Source: Murfreesboro government staff

This article originally appeared on Murfreesboro Daily News Journal: 2 developments propose hundreds of apartments in downtown Murfreesboro