The Tennessee Valley Authority on Friday sold a 900-acre portion of the site where the federal utility began in 1933 as TVA continues to scale back its operations and holdings in response to a leaner mission and budget.
A Knoxville-based investment group, organized as a real estate limited partnership known as Muscle Shoals Holdings LLC, paid $5 million, or $5,556 per acre, to acquire part of Muscle Shoals Reservation property in northwest Alabama near the Wilson Dam where TVA was headquartered when it was first created by President Franklin Roosevelt.
The land near the Tennessee River was once used for munitions production during both World War I and World War II and later for fertilizer research. But the TVA board declared the property surplus in 2012 after TVA ended its federally funded programs in 1999 and phased out much of its natural resources projects once housed on the property.
TVA sold 12 acres of the site in 2015, part of which was purchased by the TVA Community Credit Union.
The winning bidders for the 900 acres sold Friday declined to discuss their plans, according to Knoxville attorney Water Winchester, who represented the group.
TVA will retain possession of about 100 acres of the redevelopment area and an additional approximate 1,200 acres located along the Tennessee River, including the Rockpile Recreational Area and buildings that provide workspace for nearly 500 employees.
"Selling this property is an economic investment in the community while preserving local recreational opportunities," David Bowling, TVA's vice president of land and river management, said in a statement after the auction among three bidders ended. "One of TVA's core missions is economic development.'
In a similar sale, TVA sold its Edney Building in downtown Chattanooga four years ago and the 11th Street building now anchors Chattanooga's innovation district. TVA also recently sold 600 acres at TVA's Widows Creek Fossil Plant, near Stevenson, Ala., where Google is now building a $600 million data center.
TVA has sold or reduced office space across the Tennessee Valley and has cut its annual operating expenses by more than $600 million over the past five years in response to stagnate or declining demand for its electricity.
Friday's auction ends TVA's six-year project to prepare the Alabama site for sale and complete city zoning requirements.
"The hard work is done and now it is time to see the fruits of our labor," Sheffield, Ala. Mayor Ian Sanford said.. "With the number of potential customers who drive by this site every day, I'm excited to see the opportunity that the private sector has to develop this site."
TVA, which retained the CBRE real estate group to sell the land, set the minimum auction price at $3.85 million.
TVA's reservation, near the Wilson Dam, has played a significant role in Muscle Shoals history. In 1921, Henry Ford wanted to acquire Wilson Dam to build automobiles in the Shoals. TVA used the site for fertilizer research which lasted into the 1950s—many of the farming and fertilizer practices developed on the reservation are still used today.
Muscle Shoals Mayor David Bradford said he is mindful of the site's storied past.
"In 1963 President Kennedy stood on the reservation and said 'the initials T-V-A stand for progress and the people of this area are not afraid of progress," Bradford said.
Contact Dave Flessner at firstname.lastname@example.org.