Final vote looms on eminent domain for zoo-adjacent data center

Catch up quick: Metro leaders have thrown down a bureaucratic and legislative gauntlet in order to stop DC Blox from building a medium-sized data center next to the zoo.

• As new data centers pop up, leaders are rushing to regulate their construction. Council has imposed a moratorium on new data centers and created new land-use regulations in addition to O'Connell's eminent domain plan.
• Two challenges to the city zoning administrator's land-use designation for the DC Blox property have also been filed with the Board of Zoning Appeals.

Yes, but: None of that has deterred DC Blox from pursuing its project. In fact, in the midst of those government hurdles, the company closed on the $23 million purchase of the property and applied for a building permit for the 69,000-square-foot facility.

• DC Blox also offered to donate 13 acres of land to the zoo and to abandon plans for additional, larger data centers on the Grassmere Park property, according to a memorandum of understanding shared with Axios.
• For now, council's moratorium prevents the firm from starting construction on the site.

Flashback: The last time Metro found itself in a controversial condemnation case was 2011 when the city lost a lawsuit against Tower Investments, which owned land inside the footprint for Music City Center.

• Metro offered Tower $14.8 million, but a jury found the land worth $30.4 million. That case shows the risk in fighting a savvy real estate owner in an eminent domain lawsuit.

Between the lines: According to the legislation, Metro wants to use the property for office space, warehouse and employee training purposes.

Zoom in: Although the property sold for $23 million last month, it appraised for $37 million last year.

• If council approves the eminent domain legislation and the city condemns the land, DC Blox would make the case in court that it lost significant business and ask for more money.

• Metro Councilmember Quin Evans Segall raised questions about the city's financial risk during a committee meeting about the legislation earlier this month.

By the numbers: For comparison, Metro earmarked $28.5 million for a new Antioch-area elementary school in the most recent capital spending plan.

Counterpoint: The legislation doesn't technically mandate that the city condemn and take the land. It actually empowers the mayor's office to acquire the land through "negotiation or condemnation."

• The city won't need to do either if the BZA appeals derail the project first. Those challenges won't be heard until December at the earliest.
• If negotiations with DC Blox prove the company is unwilling to compromise, then the O'Connell administration could either head to court to determine the fair market value or walk away from the condemnation in order to save taxpayers' money.

The bottom line: Although a deferral is possible, council is likely to pass the eminent domain legislation despite some opposition from fiscal conservatives upset at the potential price tag.