After a 10-day delay, Tennessee state officials approved a waiver to move forward with the next phase in finding a master developer for parking lots near the State Capitol. 

The Tennessee State Building Commission unanimously approved a waiver allowing the Department of General Services to skip its normal disclosure process and seek bids for a master developer for roughly 10 acres of parking lots surrounding the Capitol in downtown Nashville. 

The lots include the one on which Elon Musk’s Boring Company is building the first phase of its underground tunnel connecting parts of downtown to the airport with Tesla vehicles. 

State officials plan to choose a master developer to turn the parking lots into a mixed-use development with housing, hotels and retail. The chosen developer will also receive an option to redevelop the James K. Polk building, which currently houses the Tennessee Perfomring Arts Centers, and build a garage for state employees. 

The deal will be a land lease agreement, allowing the state to keep ownership of the land. 

Tennessee State Building Commission to vote again on mixed-use development in Nashville

Gov. Bill Lee, who made a rare appearance to chair the building commission meeting, said the overall plan focused on better “utilizing” the valuable land in Nashville.

“We’ve been working on this for some time,” Lee said during the meeting. “At the end of the day, the taxpayers will benefit from decisions being made here. It was something I was hoping to get done before I left.”

Lee is term-limited and will no longer be governor after January.

Two weeks ago, the building commission deadlocked in a 3-3 vote because Lee, one of the designated board members, did not attend the meeting. 

State Sen. Heidi Campbell and state Rep. John Ray Clemmons, both Nashville Democrats, opposed waiving the normal disclosure process during the meeting’s public comment period. 

Without a waiver to skip its normal disclosure, state officials would have to wait until spring 2027 to move forward with a bidding process.

Campbell said she favored redeveloping the lots, but was concerned that the state was moving too quickly and not getting a competitive deal on “$160 million in state-owned land.”

”The state wants permission to bypass the normal disclosure timetable and select one developer to negotiate a long deal… without first holding a competitive price stage,” Campbell said.

The next step in the process is for the Department of General Services to release a request for qualifications, allowing it to receive bids from those wanting to be the master developer of the land. 

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