Nashville News: Developer Eyes More Affordable Housing Projects

The Nashville Business Journal :: E.J. Boyer :: January 26, 2015
East Nashville
The topics of gentrification and the lack of affordable housing have dominated the current conversation around Nashville’s growth, even as new luxury hotels and high-rises change the city skyline.
With an $11 million bank loan nearly finalized, boutique developer Bruce McNeilage plans to break ground within the next two months on Solo East, a 130-unit affordable condo project in East Nashville. McNeilage, managing member of Harpeth Development LLC, has plans to expand his “Solo” brand of affordable housing to multiple Nashville neighborhoods, and hopes that other developers will copy him.
McNeilage received rezoning approval from Metro Council for Solo East, located at 1110 Litton Ave. in East Nashville, in late October. The proposed three-story complex, one block from a YMCA and the Gallatin Road bus line, will offer gated living, appliances, granite countertops and attractive prices: one-bedrooms will start at $149,900 and two-bedrooms will be in the $160,000 to $170,000 range.
“My goal is to have Solo East occupied 100 percent by the workforce – single mothers, nurses, cops, firefighters and musicians,” McNeilage said. “I don’t have to tear anything down, we’re not displacing anybody. I think the minute I do it, others will copy it.”
McNeilage anticipates being able to offer the condos below market rates because the dirt was cheap. The three undeveloped acres where Solo East will rise, if all goes to plan, were included in McNeilage’s purchase of a 162-unit adjacent apartment complex in 2011, now re-branded as the Park at Five Points. McNeilage and his partners bought the complex (and land) for $1.6 million from the The Bank of Nashville, or about $9,877 per unit.
McNeilage lays out his vision for affordable housing like a politician making a stump speech — ambitious plans peppered with first-person anecdotes about working with Section 8 housing voucher holders looking for vacancy. The back of his business card is emblazoned with a detailed shot of the American flag and the quote “Only in America.” On the front another slogan is written, “Helping people realize the dream of safe, affordable housing.”
McNeilage is in fact a former politician, a product of the Broward County, Fla., Republican Party. He grew up through the political system with Marco Rubio, he told me, and has personal ambitions of becoming Jeb Bush’s finance chair in Middle Tennessee, should the Florida-based Bush decide to run for president in 2016. McNeilage is a financial planner by trade, and got into single- and multi-family housing development in recent years when he moved to Middle Tennessee.
“Affordable housing issues are society issues, human issues, and economic development issues that have no party,” McNeilage said. “Nashville has got to have more of this [affordable] housing or else we’re in trouble. If you can’t afford Davidson County, where will you go?”
McNeilage plans to get Solo East built (he’s estimating 12 months of construction), prove proof of concept and take the idea to other parts of town.
He hasn’t closed on land or secured funding for any additional projects, but he wants to build Solo West End, which would be affordable micro-units; Solo West Nashville, targeted for the Charlotte Avenue corridor between White Bridge and downtown; Solo North, targeted for Jefferson Street near TSU, where he already owns an apartment complex; and a second Solo project in East Nashville.

But all of those corridors are hot and land is at a premium, and McNeilage is quick to admit that the economics of Solo East only work because the land was cheap. How then does he plan to replicate the concept off a corridor like Charlotte Avenue, where H.G. Hill Realty Co. is planning another higher-end mixed-use project?

“I’m making money, don’t get me wrong, but I could be making more. … I just feel like the next deal will come to me doing good for other people,” said McNeilage.
It sounds unusually squishy for business, especially in a dollar and cents game like real estate, but McNeilage points to the story of his bank loan. In trying to get Solo East off the ground, McNeilage wasn’t making any headway on financing. After four months of courting bankers, he had a chance encounter with a Franklin Synergy banker at a Christian men’s group around Thanksgiving, where McNeilage was collecting turkeys. The local bank, which filed for an IPO this month, has offered him an $11 million loan, according to McNeilage, which he plans to finalize this week.
“Churches are looking to sell, things close. There’s going to be another opportunity,” said McNeilage. “I know its sounds weird, but I think if I keep talking to people, keep looking, it will happen.”

News Source: Nashville Business Journal


 
 
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