A long-vacant shop in downtown Nashville could get torn down and rebuilt if a local couple’s plan comes together.
Part of that plan is to get a tax abatement, which would allow them to pay taxes only on the current value of the property, not on its full value after it is redeveloped.
If granted, this would be only the second tax abatement the town has allowed. The first was for Hawthorne Hills senior apartment complex.
Kara and Clint Hammes of Nashville approached the Nashville Redevelopment Commission and the Nashville Town Council in May to ask for the abatement.
Their plan is to raze the Barnyard Shoppes buildings at 185 S. Jefferson St. and replace them with a two-story, multi-use building. Their business plan includes having a rentable commercial kitchen for food entrepreneurs to share and an indoor play space for young children on the lower level, and office or residential space on the second level.
They plan to invest close to $500,000 in the new building.
Getting a tax abatement would give them more “breathing room” in their business plan, Kara Hammes said. They are in the process of trying to secure bank financing. Because there is nothing like these businesses already in the county, the couple have budgeted conservatively, but how well it will do within the first few years isn’t guaranteed, she said.
The couple requested a five-year, declining tax abatement on the value of the land and building improvements, at 100 percent the first and second years, 75 percent the third year, 50 percent the fourth year and 25 percent the fifth year.
The tax bill on that property for 2017 (payable 2018) was $3,901, according to online records.
Kara Hammes told the town council that while it may seem like tax abatements are normally done for large projects, there are other kinds of investment that are important in a community.
“It’s not just dollars that bring people or bring businesses here, it’s also the amenities in a community,” she said. The couple wants to provide another activity option for families that they could do on a rainy day. Those kinds of things increase the “quality of life” of residents, as well as tourists, she said.
Hammes, who’s also active with the Nashville farmers market, said that other vendors have talked about needing commercial kitchen space so that they won’t have to drive hours to get to one. In order to grow some food-based businesses, that access is needed, she said.
At their separate meetings, the RDC and town council members talked favorably about the proposal. At both meetings, right before a vote was taken, Pam Gould raised her hand.
Gould, owner of the Cornerstone Inn, has been a small business owner in Nashville for 25 years.
It’s never been easy for her to pay property taxes, she said, but she considers it her civic responsibility. Asking for a tax abatement never crossed her mind.
She said she sees a need for the commercial kitchen concept the Hammes are wanting to build, and she agrees with their point about wanting to attract people with families here. However, “If a property tax abatement is offered to help them reduce their risk on their personal business plan, I’m very opposed to that as a precedent-setting maneuver on the part of the town council,” she said.
She said she would have liked to have seen the council and redevelopment commission do an assessment of how the community could benefit financially before they consider a property tax abatement.
The redevelopment commission voted 2-2 on the couple’s request to grant the abatement. The fifth member, Rick Kelley, was absent from the May 16 meeting. A sixth member, Carol Bowden representing the school board, is not able to vote by statute, but she said if she had a vote, she would vote yes because of the business’s appeal to young families.
The Hammeses presented their request to the town council the following evening. Town Attorney James T. Roberts told them that he didn’t think the council could grant them the kind of abatement they are asking for without a favorable recommendation from the redevelopment commission. The RDC also would have to make the property an economic development target area, he said.
That means the Hammeses will have to go back before the RDC when the whole board is present.
The town council voted 5-0. “I think this motion is not granting it, but if it passes all these things we just talked about, we’ll do it,” said President “Buzz” King.
Gould also reminded the town council that when they granted the Hawthorne Hills tax abatement in May 2015, a commitment was made to establish guidelines upon which to evaluate future requests, both for abatements and for the use of tax-increment financing money. “It doesn’t look like this has been done,” she said.
King said that regarding this particular case, the couple would be demolishing a property that’s been a problem for at least three years, and the town has potential to receive more tax money over the long-term than they’d be losing from the five-year sliding abatement. “It’s a gamble, that’s all it is,” he said.
