A decision on Blue Building proposals has been put on hold until this coming Tuesday, Nov. 23, with city officials voicing a desire to absorb information from an almost three-hour session.

McMinnville's Board of Mayor and Aldermen met Monday night at 6 p.m. During that session, members listened to four proposals, considered an economic impact study on two of the four, questioned two developers seeking to make multi-million dollar improvements to the property, and listened to public comment. 

Representatives from both Investment Partners and Hickory Creek Capital Partners were questioned. 

However, the latter drew most of the attention during questioning by board members, who were each given seven minutes for inquiries. 

Hickory Creek Capital Partners, according to Buzz Goss and Kent Leach, will be seeking tax credits from the state to develop the Blue Building into affordable housing – 40 units that would be considered Section 42 Housing, meaning they would be affordable to those with a household income at or below the median income.

Alderman Sally Brock questioned the length of that process. 

“Our application will go in in April and then we would hear back probably in August,” said Goss. “We would close that partnership and credits would be sold to raise the capital – probably about 80% of the capital – by about this time next year.”

“What happens if you don’t get the tax credits?” asked Brock.

Leach replied, “If we can’t get awarded tax credits or find a way to get it funded, then we would graciously step out.”

Hickory Creek Capital Partners has also proposed development of townhomes behind the Blue Building. Those would be sold to private owners and would not be part of the affordable housing development. 

Investment Partners and Hickory Creek Capital Partners were asked if they would be willing to sell, or allow the city to sell, the lower lot called “Old Garage Property” to McMinnville Aluminum & Vinyl. That business has offered the city $50,000 for the lot next to its business on Chancery Street. Both developers expressed an interest in retaining that property. 

“We need a portion of it,” said Goss. “We would be willing to work with them, as well as all three of the other proposals.”

Leach added, “We would love to see the money generated from that possible sale put into the project.” 

Investment Partners developer Bobby Kirby stated the project is so large that they would like to maintain control of that property, until it is determined if that lot will be needed in the development. 

Unlike Hickory Creek Capital Partners, which will be seeking tax credits from the state for its development, Kirby says Investment Partners has its funding in place and ready to go for the Blue Building development – 24 units and one commercial unit. Also constructed would be 40 townhomes on the lot.

Investment Partners intends to request a tax increment financing (TIF) from the city and county. TIF is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community improvement projects. If approved, it would be similar to a tax freeze with the city and county reimbursing 100% of after-development property taxes.

In the Investment Partners proposal, requested was a “similar plan as the Hampton Inn.” That developer received a 20-year TIF. That agreement provides 100% reimbursement of after-development property taxes, which are then divided: 70% to the developer, 29% to Warren County Schools, and 1% to the Industrial Development Board. 

“Have you determined if the units in the Blue Building units would be rented or sold?” asked Alderman Steve Harvey. 

Kirby replied, “They would, most likely, be for sale/ private. I don’t think we could ever do a development such as this and make the numbers work if we turn it into a rental community. I’m 99.9% sure that the units would be for sale.”

TIFs are not transferrable. Because it is used to promote economic development, TIFs end as the units and townhomes are sold by the developer. New owners would not receive that benefit. 

Harvey asked if the purchase price of $250,000 by Investment Partners would be negotiable, to which Kirby replied, “No.”

Hickory Creek Capital Partners offered $1 million. However, that amount is contingent upon the developers receiving financial assistance from the city in replacing the roof. 

While Investment Partners will be seeking the benefit of a TIF, Hickory Creek Capital Partners will be requesting a PILOT (payment in lieu of taxes) program. That program actually freezes property values up to 15 years at their rate before upgrades are made. That freeze would be exclusive to the Blue Building development and the affordable housing rental units within it. 

Board members were presented economic impact studies in relationship to both developments. However, those numbers were criticized as “misleading” because they did not take into account the developers’ desire for property tax relief through TIF or PILOT. 

Seven members of the public opted to speak. Among those were Leah Edwards, a resident of South High Street, who expressed concerns for low-income housing negatively effecting her property taxes and increased traffic congestion from the development.

Edwards says it’s almost impossible to back out of her driveway, “What will it look like after you put all those units in that property? Please tell me that. I can barely get out of my driveway. There will be too much traffic. People walk up and down that street because they use it as part of the greenway. Are they still going to be able to do that with the increased traffic? Please, when you go to vote on this, think about the citizens who actually live on that street.” 

Alderman Stacey Harvey suggested an impact study to ease those concerns. 

“To her point about the traffic,” said Harvey, “I believe that before we take any vote on this that we should have an impact study on the neighborhood, on the traffic flow, to determine what kind of impact this intense density of residential development will have uniquely on the people on South High Street and Colville Street.”

Chastain recommended negotiations with a developer could run alongside an impact study on the neighborhood.

“We are this close to having something done with this property,” said Chastain. “This has been a goal of the city for years and years and years. Right as we are at the precipice, let’s not do some more studies. We have done study, after study, after study on this property.”

The next regular session of the Board of Mayor and Aldermen is Nov. 23 at 7 p.m. 

That agenda has yet to be set.