Some deals fall through in shaky economy

Some contend it's the gateway to East Nashville, being the first thing you see as you cross the bridge from downtown.

And as much as 5th & Main developers tried to create a trendy and eclectic project to reflect East Nashville, its real mission is to stimulate revitalization in the area.

Eddie Latimer, president of Affordable Housing Resources, believes the mixed-use development will have the same impact as other projects the company has developed, including Row 8.9 and Ireland Street, both in Hope Gardens.

"The community wanted us here," he said. "We want to have a positive impact and create a strong sense of community while revitalizing the core of the neighborhood."

Condos vary in price

The first phase of the project includes a mix of 118 one- and two-bedroom condominiums and 11 townhomes ranging from 850 to 2,333 square feet and priced from $194,900 to $537,900. More than 20 floor plans are available, all which offer panoramic views of downtown and East Nashville.

The project was eligible for tax-increment financing, an incentive used by Metro Development and House Agency to help developers lower their project costs.

This requires developers to sell 20 percent of the units as affordable for households earning 80 percent or less of the area's median income. The affordable condos are priced at $149,900.

The condos and townhomes are all built around a center courtyard in an effort to conserve green space.

Parking, which is included in the purchase price, is underground except for the townhomes, which have garages. Free parking is also available underground for patrons visiting the businesses that line the ground floor of the development.

Some deals fall through

Jeremy Morgan, who was the first resident to move into the development, was sold on the location and how "green" the development is.

"The building is very modern, and they did a great job with the layout," he said. "I looked at other properties in the same price range but knew this was the one when I walked in the unit. They optimized the space. It's very open for great sunlight, and they did a great job with the amenities."

While the economy didn't affect the construction of the building, sales have suffered. By July 2006 there were about 104 units under contract, but about 30 of those deals fell through as the mortgage crisis prevented many from obtaining financing, said Andy Allen, one of the realtors of 5th & Main. Currently there are contracts on about 74 units.

"Given the state of the economy, we have revamped the whole plan, and it will probably take about 30 months to be sold out," he said. "Right now we are selling about one unit a month. Our price points, financial options and design make for very appealing product."

Timing is off

The unique European designed six-story building that fronts Main and Spring streets can be seen for miles. And while developers hope it will be a catalyst for future redevelopment along Main Street, some believe the economy is too unpredictable to see an instant change.

"5th and Main seems a bit out of sync in terms of scale and timing right now," said Dan Heller, a local developer. "It's a mammoth-sized project compared to the surrounding buildings that could make it a good anchor for future development, but the economy is so shaky right now I suspect it'll be sitting by itself for several years to come.

"Once the credit markets improve, though, I'd expect to see more mixed-use projects popping up nearby. It's a great corridor with tremendous potential for the long term."

Plans call for two additional phases to be built at 5th & Main, but they are dependent on the future of the national economy, Latimer says.

Open for business

Otter's Chicken Tenders and Allium, the second venture for Germantown Café owners, are the first retail tenants to take up space on the street level of the mixed development.

At Otter's, which opened in October, business is beginning to pick up, especially before and after Tennessee Titan games.

"We love that this is a mixed-use development with condos and retail all in one area," said Stuart Ottinger, Otter's co-owner. "We just thought this would be a great for the helping to revitalize the area."

Chris Lowry and Jay Luther, the masterminds behind Allium, were sold by the project's design and concept. While Germantown Café has been dubbed as an American bistro, Lowry says the latest venture is more French influenced. The menu features entrees like steak frites, quiche and steak au poivre.

"We live in East Nashville, so we are very committed to this neighborhood," Lowry said. "With Allium on this side of the river, but we still are within a mile of downtown, and accessibility is still relatively easy.

"We are still striving to maintain the value that Germantown Café has, and both have views of downtown and the capital."

There are several businesses interested in leasing space at 5th & Main, but plans have yet to be finalized, Latimer said. He hopes to attract additional amenities that will benefit homeowners.