Fallon master development agreement: 99-year lease, affordability targets and infrastructure responsibilities explained to East Bank board

Metro staff provided the East Bank Development Authority an informational briefing on the master development agreement with the Fallon Company for the first 30 acres of Metro-owned land in the East Bank central waterfront.

Staff described the 30-acre area as selected for proximity to the stadium and existing infrastructure availability. The agreement is a 99-year ground lease; Metro retains land ownership and a fair-market rent will be set by appraisal, with an annual increase mechanism until ground is broken and a fixed rent thereafter.

Affordable housing: The development agreement ties residential milestones to affordability commitments. Staff summarized that if Fallon builds the minimum number of housing units in the agreement (1,550 units), 695 units would be affordable under the agreed benchmarks, representing a substantial share of the minimum. Affordability levels were described in terms of area median income (AMI); staff noted AMI is defined by federal rules across a multi-county area and that percentages of AMI translate differently for Nashville residents than for the larger AMI geography. The agreement includes a 99-year affordability term for committed units.

Infrastructure and phasing: Fallon's infrastructure commitments in the exhibit shown to council place primary responsibility for key near-stadium infrastructure with the developer. Parcels C and G, closest to the stadium, are expected to be developed first because infrastructure is available there. Parcels E, E1 and F were described as later in the schedule due to infrastructure needs. Parcel E is identified in the development agreement as the parcel that would be held for TPAC (the performing arts organization) if Metro reaches a separate agreement with TPAC; if TPAC does not reach an agreement, Fallon would develop parcel E under the previously issued RFP. Staff said the agreement contains a contingency path: Metro and Fallon agreed to negotiate subsequent dispositions if the TPAC arrangement falters.

Parking and stadium obligations: Staff said Metro agreed as part of the stadium arrangement to provide 2,000 parking spaces for Titans events indefinitely. In the near term, staff expects to rely on existing surface parking while opportunistically addressing parking as development and sales-tax-capture funds become available. Under the downtown code as applied to this area, parking requirements can be zero; staff said developers commonly include parking based on market demand.

Financial participation and taxes: The lease includes a participation rent provision under which Metro will receive 1% of gross proceeds when a Fallon-developed building changes hands or on cash-out refinancing events; staff said the provision is designed to capture value through future sales or refinancings. Staff also noted the properties will pay full property taxes because Tennessee law subjects long-term private leases of publicly owned land to taxation.

TPAC timeline: The master development agreement and a nonbinding MOU with TPAC set dates for TPAC to demonstrate financing and commitments; staff said TPAC needed to demonstrate financing and commitments by the end of the current year (the transcript places that deadline in 2025) or Metro would proceed under the fallback terms in the development agreement.

Workforce and construction protections: Fallon committed to participate in workforce-development programs, support wage-theft prevention processes and follow construction safety standards; staff said Fallon planned to incorporate on-site reporting mechanisms for subcontractor issues and had indicated Turner Construction would be involved on the stadium and related projects.

Other terms: Staff described a cap on the number of hotels within the first 30 acres to encourage a neighborhood balance rather than a tourism-dominated district. Parcel uses shown in the agreement: Parcel A (future transit hub, affordable housing), Parcel B (near stadium, expected hotel/construction trailers in near term), Parcel C (hotel/residential mix), Parcel D (residential and possibly hotel), Parcel E (reserved for TPAC or Fallon if TPAC does not proceed), Parcel E1 and F (future mixed uses; F likely retail on ground floor with residential above). Some parcels were noted as having significant geotechnical or easement issues that must be cleared before pad-ready conditions are achieved and a two-year clock to break ground begins once Metro provides pad-ready parcels.

Staff said the development agreement was negotiated through a robust RFP and subsequent council review and was intended to deliver a large share of residential units with deeply committed affordability periods while placing near-field infrastructure responsibilities with the developer. Staff emphasized the project will require interagency coordination and substantial engineering work to realize the vision plan.

Board members asked several clarifying questions about specific parcels, parking expectations, the contingency if TPAC does not proceed, and when the affordability clock begins; staff responded with the text in the agreement that starts the affordability timeline when a parcel is pad-ready with utilities and access and noted many implementation details remain in technical work and subsequent coordination with Fallon and contractors.