Each of Nashville’s last few mayors have had grand plans for the city’s riverfront. All have been filled with visions for recreational and community space on both sides of the water, and none of them have imagined a future that continues to include a massive metal scrap yard on the east bank.
But through it all, PSC Metals has stayed firmly in place.
Last week, we learned that the business was sold separately from the land. Although the new owners will continue to lease the site, and that’s raised a new slew of questions about the future of that key piece of riverfront property. Adam Sichko has been covering the story for the Nashville Business Journal.
NC: First of all, let’s try to understand the ownership situation because it’s kind of complicated. For years, PSC leased most of the site, and at times the previous landowners hinted that they might be willing to redevelop it. When did PSC come to own the land outright?
AS: So they cover about 45 acres of land at their site, and they had owned roughly half of that, when Carl Icahn bought the company in 2007. But they were leasing the other half from descendants of a prior scrap metal and iron recycling business that had operated there for decades. And in 2017, Icahn purchased the land that he had been leasing from those descendants. And so at that point, he controlled the whole 45 acres. So he has for about four or four and a half years now.
NC: And just to say here, Carl Icahn is the New York billionaire with a long history of buying businesses and then selling them for a big profit. So he bought PSC and he bought the land.
AS: He’s had the keys of the car, so to say. He’s controlled that entire site.
NC: What has now changed?
AS: So he has sold PSC Metals to a company based in California called SA Recycling, and he has sold everything related to PSC metals. They have more than 30 locations in seven states. Except he is going to retain ownership of the land on the riverfront and lease it to SA Recycling when this deal goes through.
NC: Well, for so long, so many Nashvillians have considered that site really a prominent eyesore. What do these deals indicate for the site? How much of a chance is there that the scrapping operations might move?
AS: To me, it’s the surest sign that Carl Icahn — who you know is worth $17 billion, I’m sure knows a thing or two about real estate — sees development potential in that land because he is negotiating a way in the sale of his company to hold onto that land. And I think it opens the potential for development on that site in a way that hasn’t really existed before. And the fact that Carl Icahn is keeping the ownership of this land, to me, signals that he has an eye on understanding the real estate value of that land and potentially looking to cash out in the years to come.
NC: And he’s not someone who tends to hold on to investments, is he? He is someone who does just buy something to sell it.
AS: He certainly loves business. And so part of that is that dealmaking activity, and I’d certainly would think that he’s got an eye on, you know, keeping an eye on the prospect for development on that site.
NC: Now you’ve reported on the past on talks with several Nashville mayors about relocating the scrap yards. That redevelopment can happen. And you’ve reported that those talks have repeatedly fallen apart. Do you think redevelopment could happen without government intervention?
AS: One of the major questions for PSC has always been, “But where will they go?” You know, they have land there on the riverfront that’s in the bull’s eye. They have great interstate access. They have rail. They can offload or haul some of that scrap on barges on the river. And they’ve never really had that prime alternative to try to find a comparable site that gave them all those options for hauling goods. And this company that Carl Icahn has sold to, SA Recycling, earlier this summer, they bought a company named Southern Recycling, and that company, which is now part of the SA Recycling, has an operation on the riverfront in West Nashville, near where the spooky, old state penitentiary is. It’s got water access. It’s got rail access. It’s right next to Briley Parkway. This deal, to me opens up the possibility in a way that, you know, government may not need to take the lead. They may need to be involved, but they may not need to take the lead necessarily like they have in years past.
NC: And then the other factor, of course, is the condition of the land itself. This has been an industrial site for roughly a century, which means the soil could contain a lot of toxins. And we’ve heard speculation through the years that private developers wouldn’t really want to deal with the remediation that would be necessary to make it safe. Has that thinking changed?
AS: When you look just a mile and a half to the north, to the site that Oracle has purchased for its waterfront tech campus, you know, a piece of that site was a Metro landfill decades ago. And under the deal that Oracle worked with Metro, Oracle is going to spend some money to do the remediation upfront and then get repaid over a series of years by keeping some of the tax money, the property tax money, that would have gone to Metro. That could be a model for how something might happen.
Adam Sichko is senior reporter for the Nashville Business Journal.
On Air - 90.3 WPLN-FM