MEMPHIS | Development News

[Johnny Ryall]

Downtown Anticipates Residential Uptick
ANDY MEEK | The Daily News

For Downtowner Josh Thomas, it’s about the simple things. Like how, at the end of a long day at the office, he can unwind with a cigar and watch the sun set over the Mississippi River from the roof of his condo building. “That’s so cool, and you can only do it Downtown,” said Thomas, the campaign manager for Shelby County Dist. Atty. Gen. Bill Gibbons’ just-ended gubernatorial campaign. Thomas moved Downtown from East Memphis about a year ago. It’s a relocation Downtown backers expect to see repeated a few thousand times in the next five years, as more people flock to the bedrock of the city’s political, legal and entertainment sectors.

By 2014, more than 2,000 people are expected to make the same move Thomas did when he traded the familiarity of his old neighborhood farther east for the hip, happening vibe he saw Downtown. “As a young guy, I like the variety of things to do,” Thomas said. “Walk to a local pub, upscale dining, catch a baseball game or the art tour on South Main.” An additional 2,000 people means Downtown’s estimated 2009 population of 22,578 would grow to almost 25,000 in five years. That’s a 10 percent bump. The projection comes from a comprehensive housing demographics study prepared by the staff of the Center City Commission over the past 12 months.

The recent opening of the University of Memphis Cecil C. Humphreys School of Law on Front Street is responsible for bringing 460 college students Downtown. The Memphis College of Art’s relocation of its graduate program Downtown will bring about 100 students to the area next year. And later this year, the opening of the Visible School, a music and worship arts college, will add another 120 students to the mix. A little to the east, development of the University of Tennessee-Baptist Research Park is still under way. Once that bioscience technology campus is finished, it’s expected to generate about 9,000 jobs.

Those students and new workers will bring with them money to spend and housing needs, both of which are extra boons for Downtown’s residential market and business community. And both of those, because of the people bulge, are also growing. More than 138 apartment units now under construction will become available for lease in the next five years.

Downtown has 2,100 condo units, most of which were developed between 2000 and 2009. There are 20 active condo developments with new units for sale. Fresh business activity Downtown runs the gamut from the medical research hub between Union and Madison avenues to new and expanding restaurants and retail outlets.

A new law office opened this week on the fourth floor of the recently refurbished Lincoln American Tower. Four lawyers – T. Clifton Harviel, Barry McWhirter, Arthur Quinn and Michael Stengel – left their respective practices to open the new office Downtown, where they’ll practice individually, but share space and support staff.

The long-underused spaces circling the intersection of Main Street and Union are starting to come alive. An upscale grocery store is opening at that corner as early as next month. The owners of the new store, City Market Groceries & Deli, announced to their nearly 200 Facebook followers they’ll display a “Coming Soon” sign on their space soon.

The CCC report finds another reason to suggest Downtown businesses and service providers may be sitting pretty because of the population growth. The report forecasts the number of Downtown households with six-figure incomes will make a big jump in the next few years. The number of households with incomes between $100,000 and $149,999 is expected to grow about 37 percent – from 738 in 2009 to 1,013 in 2014. At the top of the income scale, households with incomes of more than $150,000 will grow almost 40 percent in the next five years, from 829 to almost 1,200. “Although retail and residential services have increased significantly over the past decade, Downtown residents continue to be underserved from a retail standpoint,” the report notes.

[Johnny Ryall]

New & Improved
Hickory Ridge reopens with shops, community center
REBEKAH HEARN | The Daily News

Photo: Lance Murphey

Just more than two years after being ravaged by a tornado, Hickory Ridge Mall will reopen this weekend under new ownership and having undergone millions in renovations. The mall now will be a community center featuring retail components and eventually will include a medical center. The owner, World Overcomers Outreach Ministries Church Inc., and the Hickory Hill Community Redevelopment Corp. will hold ribbon-cutting festivities to celebrate the reopening of the mall in an area affected by blight, crime and displacement.

The Martin Luther King-Hickory Hill Community Parade Saturday at 11 a.m. will kick off this weekend’s grand opening. The parade’s grand marshal is Elder Bernice King, the youngest daughter of Martin Luther King Jr. Following the parade, a series of contests, prizes, music, face painting, giveaways and amusement rides will begin. After that the official ribbon-cutting will take place, at which point the new Hickory Ridge Mall vendors will be introduced to the public. The Memphis Teen Icon Contest, to be hosted by “American Idol” contestant and Memphian Lil Rounds, will begin.

The tornado of Feb. 5, 2008, destroyed a wall of the Sears store on the west side of the mall. In October 2008, the former owner, Carlyle Rock Ridge LLC, sold the mall to World Overcomers for $1.4 million. The first phase of renovations, which cost approximately $5 million, have been completed. The church, which is just down the street at 6655 Winchester Road, and the HHCRC are trying to revitalize the area by reopening about 40 stores in the mall and offering people a family-friendly community center. “We are honored to be able to give back to the community and the Hickory Ridge Mall as a restored entity,” said Jimmie Haley, the economic development director for the mall. Haley said the next two or three phases of the project will include the new Incredible Pizza Co., which is scheduled to begin after this weekend and slated to be completed by fall of this year.

Photo: Lance Murphey

“We’re going to pick up starting next week with that part, negotiations and touching base with different entities that can be in the community services (wing),” Haley said. The community services wing, as well as a medical mall wing, comprise phases two and three, as they both will begin in 2010 but the work will carry over into 2011. Haley said the Shelby County Clerk’s Office will reopen in the mall as part of the community services wing.

Thirty-two retail spaces are occupied, according to the Hickory Ridge Mall’s Web site, www.hickoryridge.com, and eight food court vendors, two training and education centers, a carousel and movie theaters are part of this first phase. “We have some other businesses that we’re still talking with right now; we’re going to have a baby thrift store, and our plans are to put a daycare center in the community services wing,” Haley said. “That’s a part of our infant mortality plan. We want to be very much in the middle of that and make sure we have a footprint here that works for the public.”

The medical mall wing will include 18 health services offices to occupy about 70,000 square feet. Phase three also will include a 72,000-square-foot banquet and conference center, reception and meeting rooms and classrooms, according to the mall plan information on the Web site. Phase four will include a 110,000-square-foot youth, enrichment and entertainment center, including a roller skating rink, recording studios and a computer lab. The fifth phase includes building a senior independent living facility, slated for completion in 2014. The total renovation has a projected cost of $52.5 million.

[Johnny Ryall]

Saint Francis to Renovate Thompson Tower Floor

Saint Francis Hospital-Memphis at 5959 Park Ave. has filed an $850,000 building permit with the city-county Office of Construction Code Enforcement to renovate the fourth floor of its Thompson Tower.

The hospital’s 42-acre campus sits along the south side of Park Avenue near Ridgeway Road. It is home to the hospital, two medical office buildings, the University of Tennessee/Saint Francis Family Practice Residency Building and a four-story parking facility.

Thompson Tower is one of the hospital’s two towers, a six-floor structure for patients. The fourth floor’s rooms will be converted to suites for Saint Francis’ joint and spine center, said hospital spokesperson Marilynn Robinson. Imagine 21 Inc. of Memphis is the project’s general contractor. Founded in 1974, Saint Francis now has 519 beds in private rooms along with tertiary and acute care services, outpatient services and wellness programs.

The hospital is owned by Dallas-based Tenet Healthcare Corp., which also operates Saint Francis Hospital-Bartlett. That facility is undergoing a $45.4 million expansion that will add 96 hospital beds to its existing 100 beds.

Source: The Daily News Online & Chandler Reports – Eric Smith

[Johnny Ryall]

Downtown Corner Ripe for Business
ANDY MEEK | The Daily News

For at least a year, empty storefronts ripe for redevelopment have greeted passersby at a key Downtown intersection. Developers are now reshaping that high-profile juncture of Main Street and Union Avenue, where all four corners have defiantly sat vacant at least a year as revitalization unfolds around them. Development entities within the past two months have staked a claim on a few of the underused buildings at the intersection. They’re separately planning a pair of commercial projects: one a grocery store and the other a retail and office development in the former Smooth Moves building. The grocery’s owners originally had talked about opening next month at 66 S. Main St., but they’re still hammering away at construction details. Meanwhile, they’re steadily building interest in what they say will be an upscale boutique store with the convenience of a major grocery.

Today, the Center City Commission’s Design Review Board will look over plans for the second project. It will be a $1.66 million retail and office development at 75 S. Main St. The DRB, which meets at 5 p.m. at the CCC office at 114 N. Main St., will vote on design plans that call for renovating the existing three-story, 17,000-square-foot building for mixed commercial use. The basement level and second and third floors will be fitted for office use. Retail is going in on the ground floor.

The start of construction for both projects may be only a few months away. Construction is tentatively scheduled to begin in May on the building that once housed Smooth Moves and should wrap up by October. Union Avenue Holdings LLC plans to apply for a development loan for the project from the Center City Development Corp., which meets later this month. The Memphis Landmarks Commission will review the project later this month as well. Together, the plans give Downtown development officials reason to rejoice. The projects stand to make two of the four corners at Main and Union – where the Main Street trolley rumbles through each day – bustle again with activity. “The intersection has always been and is the heart of Downtown,” said Adam Slovis, one of the co-developers of the Radio Center Flats apartment development at 66 S. Main. The new grocery, City Market Groceries & Deli, is going in the ground floor of Radio Center Flats. “There’s no better intersection in Downtown Memphis,” Slovis said. “With Radio Center hopefully getting the commercial space finished, Smooth Moves getting done will be the next step toward really revitalizing that major intersection for people who live, work and visit Memphis.” The grocery’s owners unveiled their plan in February to launch an upscale grocery in a little more than 2,800 square feet of space in May after signing a 10-year lease.

An opening date is still a few months away. But interest among Downtowners is building for the store, whose owners will offer freshly prepared food with a local and international flair alongside the usual grocery staples such as milk and eggs. City Market’s Facebook page attracted its 200th fan this week. Comments left by fans of the page show general anticipation for the store, which will offer the look and feel of an Old World market and will feature exposed bricks, ceiling beams and concrete floors.

The CCDC has already approved more than $60,000 in development incentives for City Market. In February, the board approved a $40,000 retail forgivable loan for the grocery. The board followed that in March by approving a nearly $22,000 façade grant to facilitate exterior improvements such as signs and lighting. In a presentation to CCC officials, City Market’s owners said their store will have an outdoor patio and limited menu for breakfast, lunch and dinner featuring items prepared each morning.

[Johnny Ryall]

Memphis Theological Seminary to invest $4.2M in campus expansion
Memphis Business Journal



Memphis Theological Seminary unveiled the beginning of a multi-phase expansion and beautification plan at a press conference Thursday. The $4.2 million first phase of the capital campaign has three major components: developing the west portion of the campus with landscape beautification; restoring the fountain on the front portico of the building and improving irrigation and lighting; and constructing a new chapel building.

Ruby Wharton, a Memphis Theological Seminary trustee, said the construction of a free-standing chapel will be on Union Avenue, with groundbreaking projected for late 2011. “In keeping with the limestone and marble facade of this historic building (Founders Hall), the new chapel and any future buildings will have the same look,” Wharton said. “In addition, the expanded campus will be designed using good urban planning guidelines that mirror the desires of our Midtown neighbors.” Ralph and Barbara Hamilton donated the lead gift of $1 million. The donation is intended to support the building of the chapel.

Memphis Theological Seminary president Jay Earheart-Brown said that despite encouragement to relocate the seminary throughout the years, it remains committed to deepening and expanding its roots in Midtown Memphis. It is located at 2385 Union Avenue. “It is because of the commitment to the people of Memphis and the entire Mid-South region that leads us to launch Phase I of a multi-year campus expansion and beautification plan,” he said. Earheart-Brown pointed out several benefits of the campus expansion despite this time of economic uncertainty.

As the campus expands through the construction of new buildings and increased enrollment, Memphis will benefit from jobs created for the landscaping and construction projects, an increase in housing needs and money spent at local stores and restaurants by a larger student body. Memphis Theological Seminary has a total enrollment of 405 students.

[Johnny Ryall]

Center City Commission could expand streetscape improvement funds
Memphis Business Journal - by Andy Ashby

Downtown’s infrastructure could benefit from expanded funding mechanisms used by the Center City Commission. The state legislature recently passed a law which would broaden the Center City Commission’s use of funds for infrastructure Downtown. The new ruling would widen the definition of infrastructure to include streetscape improvements. Center City Commission’s financing of infrastructure has been limited to building parking structures, such as the garage at 250 Peabody Place.

The Center City Commission is hoping it can leverage that new money against public Capital Improvement Project dollars to fund immediate priorities, according to Andy Kitsinger, senior vice president at the commission. There are $43.5 million of immediate priorities across Downtown, according to a report issued in November. There will be a public meeting Thursday to talk about some of those potential improvements. The commission is inviting South Main neighbors to the meeting at 5:30 p.m. at Central Station.

Ritchie Smith Associates, the project consultant, and Tetra Tech developed construction documents for streetscape improvements along South Main from Linden Avenue to St. Paul. They will show some preliminary designs and get feedback from area residents. The Center City Development Corp. funded the architectural and engineering fees to create the documents and will now seek funding for the construction. This is part of the larger streetscape master plan the commission is implementing. It is submitting these projects for the city’s Capital Improvement Projects budget.

[Johnny Ryall]

NuVasive expanding Memphis operations
Spinal surgery kits provider seeing 35% revenue growth
Memphis Business Journal - by Michael Sheffield



San Diego-based NuVasive, Inc., is investing $1.6 million to double the size of its 40,000-square-foot Memphis distribution facility. NuVasive, which owns its 100,000-square-foot building on Shelby Drive, was using 40,000 square feet for its operations while subleasing 20,000 square feet. The company’s growth, says Keith Valentine, president and COO of NuVasive, led to the decision to build out the remaining 40,000 square feet. NuVasive is approaching $500 million in revenue in 2010, after recording $370 million in 2009, Valentine says. That growth is largely attributable to Memphis. “Memphis gives us an advantage because of FedEx,” he says. “That gives us greater access across the country.”

[Johnny Ryall]

CCC narrows president search list to 20
Memphis Business Journal - by Andy Ashby Staff writer

The Center City Commission has narrowed its search for a new president to about 20 candidates after a committee meeting today. Search firm HRS Inc. issued a report with 77 individuals and graded them as A, B or C candidates after a preliminary review of their credentials. The search committee asked HRS to begin interviewing and testing the 18 “A” candidates immediately and two of 38 “B” candidates. All "B" candidates eventually will be interviewed. The 18 “A” candidates were (alphabetically):

• Scott D. Adams, chief urban redevelopment officer for the city of Las Vegas

• Thomas C. Chatmon Jr., executive director of the Orlando Downtown Development Board

• James H. Edwards, redevelopment director of the Florist Community Redevelopment Agency

• James N. Graham, former economic development manager with the Reno Redevelopment Agency

• Mason Kauffman, founder and CEO of the World Logistics Organization

• Andy Kitsinger, director of planning and development for the Center City Commission

• Paul L. Krutko Jr., chief development officer for the city of San Jose, Calif.

• John Lawrence, economic and community development consultant in Memphis and former director of planning for the Center City Commission

• Myron Lowery, Memphis City Councilman

• Rick Masson, executive director of the Shelby Farms Park Conservancy

• Brett McNeal, manager of diversity and staffing for the University of Memphis Physicians

• Paul Morris, shareholder at Martin, Tate, Morrow & Marston PC

• Eric Robertson, chief administrative officer at the Center City Commission

• Frank W. Robinson, town manager of Apple Valley, Calif.

• Jerome E. Rubin, vice president of operations for the Center City Commission and former Memphis City Councilman

• Susan Shannon, former director of economic development for the city of Seattle

• James A. Slaughter, president of Beacon, N.Y.-based The Slaughter Group

[Johnny Ryall]

Carlisle Corp. files PILOT for Downtown office building
Memphis Business Journal - by Andy Ashby

Carlisle Corp. could be building itself a Class A environmentally-friendly office building Downtown. Carlisle Hotels Inc., a wholly owned subsidiary of Carlisle Corp., is applying for a payment-in-lieu-of-taxes abatement from the Center City Revenue Finance Corp., which will hear the request April 14. Carlisle plans to develop and occupy a 16,000-square-foot office space at 263 Wagner Place. The company will try to get a Leadership in Energy and Environmental Design designation for the building. Carlisle currently employs 35 people and leases space in Peabody Place. The company’s lease expires in July and it has considered a move to Olive Branch as well as this new office building, according to CCRFC documents. Gene Carlisle, founder, chairman and CEO of Carlisle Corp., owns a hanger at Olive Branch Airport. He also owns land next to it which could be used for an office building.

The total development cost will be $2.7 million, which includes $933,300 in property acquisition, $1.68 million in construction costs and $100,000 in architecture, financing and legal fees. Construction is scheduled to begin in May and be done by August. The design plans will be presented to the Center City Commission’s Design Review Board on May 5. The Center City Commission staff determined the project is eligible for a 7-year PILOT. If Carlisle submits exterior lighting plans which meet the requirement of the CCC’s Light It Up program, the project might be eligible for an additional year of tax abatement. Carlisle acquired the property, which included Joe’s Crab Shack and two other parcels, for $2.75 million in 2004, according to Shelby County Property Assessor’s records.

Since this cost would make the office project ineligible for the PILOT program, the company is asking the CCRFC to use the current appraised value of the property, $933,300, since the initial purchase included an operating restaurant that was subsequently destroyed by fire. To be eligible for a PILOT, the value of a project's renovations, improvements or new construction must be equal to or greater than 60 percent of the total project's costs, including property acquisitions. Chad Stewart & Associates is handling the project’s engineering while Looney Ricks Kiss is designing it. Another Carlisle subsidiary, Wendelta Inc., operates more than 97 Wendy’s restaurants in four states.

[Johnny Ryall]

Highwoods in talks to buy Crescent Center
Premier office space in coveted Poplar corridor
Memphis Business Journal - by Andy Ashby



Real estate investment trust Highwoods Properties, Inc., is in negotiations to buy the Crescent Center office building from Behringer Harvard, according to numerous real estate sources. The 336,396-square-foot building on 10.1 acres at Poplar and Ridgeway is considered one of the premier office spaces in Memphis. The building and land were appraised for $58.5 million in 2009, according to the Shelby County Assessor of Property documents. Highwoods currently owns, manages and operates 2.2 million square feet of space in Memphis, of which 1.4 million square feet is along the Poplar corridor. When completed, the sale would put a majority of the Class A office properties in the coveted East Memphis submarket into the hands of three companies: Highwoods, Boyle Investment Co. and Parkway Properties, Inc. Parkway owns 533,000 square feet of Class A space in East Memphis. Boyle owns, manages and leases 1.5 million square feet of Class A and B space in the East Memphis submarket. The company has 2 million square feet of total office space in Memphis. Officials with Highwoods declined to comment for this story.

By removing a landlord of Class A multi-tenant space from East Memphis, the remaining property owners get more control of the submarket. “It reduces tenants’ ability to leverage owners against each other to get the best deal,” says Ron Riley, executive vice president with In-Rel Management, Inc. In-Rel owns, manages and leases Clark Tower, Poplar Towers and Lynnfield Office Park, which is 1 million square feet of Class B space in East Memphis. Riley expects Highwoods to be successful with the Crescent Center. “There’s no question they’re a top-notch operator and that it’s one of the best properties in town,” he says.

Everclear Acquisition Corp., a wholly owned subsidiary of Behringer Harvard REIT I, Inc., acquired Crescent Center in December 2007 as part of its acquisition of IPC US REIT for $1.4 billion. Behringer Harvard currently owns the office property at 6075 Poplar through IPC Crescent Center LLC. IPC US REIT bought Crescent Center from Cooper Realty Investments and the Arkansas Teacher Retirement System for $63 million in October 2005. Since Weston Cos. developed Crescent Center in 1986, the property has also been owned by Travelers Insurance Group and Archon Group, the company that sold it to Cooper Realty Investments. Mark Halperin, executive vice president with Boyle, says the Crescent Center sale won’t have a significant initial impact on the submarket because Highwoods will take care of the property and have qualified people leasing it, similar to Behringer Harvard’s ownership. CB Richard Ellis Memphis has handled leasing at the property since 2005. However, he does say the sale will continue to concentrate East Memphis Class A office space into a few hands. “How that will impact the marketplace, I’m not sure,” Halperin says. Highwoods’ basic strategy, like Boyle’s, has been to manage and lease the buildings it owns. “I think there is an advantage for the tenants to be dealing with the same entity from the initial process through occupancy,” Halperin says. “Leasing office space is kind of like being married and I don’t think people emphasize enough who owns the building and who runs it.” Halperin says the East Memphis submarket has seen minor office leasing activity recently, but there could be more.

Boyle recently brought its newest property, the 155,000-square-foot 999 S. Shady Grove building, to 75% occupancy. Meanwhile, across the street from Crescent Center, Highwoods recently opened Triad Centre III, a 155,000-square-foot property that is the first Leadership in Energy and Environmental Design speculative office building in Memphis.

Highwoods Properties, Inc.
Office management, leasing and development
HQ: Raleigh, N.C.
NYSE: HIW
President: Edward J. Fritsch
Employees: 407
2009 revenue: $454 million
Local Address: 6410 Poplar, Suite 140
Local Phone: (901) 683-2444
Web site: www.highwoods.com

Crescent Center
Class A office building
Address: 6075 Poplar
Developed by: Weston Cos.
Total square footage: 336,396
Available square footage: 44,196
Stories: Nine, plus basement
Asking lease rates: $29/sq.ft.

[Johnny Ryall]

Methodist, University of Tennessee to develop Memphis sickle cell center
Memphis Business Journal

A coalition of city, community and health care leaders have announced a $5 million effort to start a center for the treatment of adult sickle cell. The Comprehensive Sickle Cell Center of Memphis is a joint program between Methodist Le Bonheur Healthcare and the University of Tennessee Health Science Center. More participants are planned, according to a news release. The new center and the fundraising effort were announced during a 10 a.m. event at City Hall Tuesday. The fundraising committee is being chaired by Jim McGehee, chairman, of McGehee Realty and Development Co., and Gayle Rose, owner and CEO of Electronic Vaulting Service Corp. and chairman of the Rose Family Foundation. McGehee donated $250,000 to start the fundraising effort.

The unit, which will be located at Methodist University Hospital, will consist of 24-hour acute care, an infusion unit and outpatient care that will provide patient education, genetic counseling, social work services and psychosocial support for adults. Methodist will incorporate the outpatient clinic into the existing Methodist University Hospital Teaching Practice in the Medical Arts Building. The 40-bed inpatient unit will be located in the Crews Wing. No programs are being eliminated to create space for the program, said Methodist spokesman Ruth Ann Hale. “Filling this gap is essential,” said Mark Yancy, coordinator of major gifts at the Methodist Healthcare Foundation. “The approximately 1,500 sickle cell patients in the Memphis Metro area often suffer bouts of excruciating pain in the chest, arms, legs or other parts of the body. In crisis mode, they need a place to go where their disease is understood and can be quickly addressed.”

[Johnny Ryall]

Seismic issues resolved; Memphis, Bass Pro on way to finalize Pyramid deal
By Amos Maki

The city and Bass Pro Shops have reached a consensus on seismic issues at The Pyramid, paving the way for the two sides to finalize contract negotiations. “We reached an agreement with standards for seismic and adaptive reuse of the building,” said Mayor A C Wharton this afternoon during an executive committee meeting of the City Council. “They didn’t want to make any investment until we reached an agreement on seismic standards and the retrofit.” Wharton said he'd like to see the revamped Pyramid open in November 2011.

In the coming weeks, city officials will ask the state to extend the Tourism Development Zone, which now covers Cook Convention Center, to cover the Pyramid, a key part of Bass Pro’s plan to finance the transformation of the old arena. Wharton is scheduled to meet Bass Pro officials in Memphis on April 20 to hammer out contract details. Bass Pro and city officials have been considering an initial 20-year lease on the building, with seven renewal periods of five years each. The city and Bass Pro have been negotiating since late 2005, when the company signed its first letter of intent. Bass Pro plans to transform The Pyramid into a $100 million regional center with retail space, restaurants and a large conservation exhibit focusing on the Mississippi River.

In February 2009, the city signed an agreement giving the company until Dec. 31 to finish planning and gathering the necessary permits before signing a long-term lease. In December, the City Council agreed to extend the agreement with Bass Pro until March 31. Bass Pro has been paying the city $35,000 a month since signing the 2009 agreement and has committed to paying a $500,000 penalty if it pulled out of the deal.

Even though negotiations have dragged on for years, council members are still excited about the prospect of Bass Pro redeveloping the Pyramid, which they say could create hundreds of jobs and bring shoppers and tourists to Memphis from across the Mid-South. “Everyone they build is better than the last one they built so we should be the best in the country when they get started,” said councilwoman Barbara Swearengen Ware.

[Johnny Ryall]

UPDATE: Bass Pro Shops Sets Nov. Opening Date For Pyramid
Wharton Sends Draft Lease Agreement To Retailer

BILL DRIES | The Daily News

Bass Pro Shops executives have set a November 2011 opening date for their planned renovation of The Pyramid as a retail store with other attractions. Memphis Mayor A C Wharton Jr. announced the date to City Council members this afternoon. During the council’s executive session, Wharton circulated a letter he sent today to Bass Pro Shops founder Johnny Morris and CEO Jim Hagale. The city and Bass Pro Shops could have a lease for the redevelopment of The Pyramid signed by the end of April with work beginning almost immediately. The letter from Wharton includes a draft lease agreement between the city and the outdoors retailer.

“As we have jointly identified and removed … critical barriers, we are now prepared to move forward and finalize the lease terms relative to this key redevelopment project,” Wharton wrote. The city and Bass Pro executives are to meet April 20 to “discuss and finalize our negotiations of the business terms for the project. Wharton told the council developers from Poag & McEwen also will be involved in the meeting next week to answer questions about possible development of the surrounding Pinch district. An April 29 meeting is also set in Springfield, Mo., at Bass Pro headquarters to draft final versions of all of the agreements.

The “barriers” cleared this week include:

•An agreement that the floodwall system and maintenance program around The Pyramid are “sufficient” to protect it in the future.

•Using FM Global standards as the benchmark for seismic efforts as specific plans for the building are designed.

•An expansion of the Tourism Development Zone (TDZ) that now covers the Memphis Cook Convention Center. The TDZ status is essential for tax rebates or refunds to finance the Pyramid project.

The city of Memphis will remain the owner of The Pyramid.

[Johnny Ryall]

One Beale developer gets tax break to turn restaurant into offices
By Wayne Risher

Developers of the stalled One Beale project won a tax break today for renovation of a former seafood restaurant into top-tier office space. Carlisle Hotels Inc. was approved for a tax freeze up to seven years for a $2.7 million project to retrofit the former Joe's Crab Shack at 263 Wagner for developer Gene Carlisle's company offices.

The Center City Revenue Finance Corp. also approved a 10-year tax freeze for a 25-unit apartment building with ground-floor retail at 436 S. Front for Greenbrier Partners LLC. It granted a one-year extension for closing on a previously approved tax freeze for Grand Island LLC, which proposes to build 204 apartments on Mud Island south of the A.W. Willis Bridge.

Chance Carlisle said the family company, which has given notice to leave Peabody Place Tower, had a choice between moving some operations to Olive Branch or keeping everything Downtown.

Carlisle and company representative Earl Blankenship said One Beale isn't dead, just indefinitely delayed by a continuing drought in financing for such projects. Carlisle said officials envision the renovated office space eventually being flattened to make way for a new office component of One Beale. As originally envisioned, One Beale was a $186 million, mixed-use project including high-rise luxury hotel, condos and office space. In September 2008, the company said the project would be broken up into smaller piece, starting with a $25 million to $30 million low-rise hotel.

[Johnny Ryall]

Previously:

Hino Motors to unveil latest expansion
Memphis Business Journal

Hino Motors Manufacturing USA will hold a grand opening Feb. 7 for the latest expansion at its Marion, Ark. plant, the company announced Friday. Hino announced in May it would invest $70 million to expand the facility that makes axles and suspension components for the Toyota Tundra pickup truck. Hino Motors has invested $230 million in the facility since the company opened its first plant in Marion in 2004. Since 2004, Hino has expanded its employee base in Marion to 700 employees.

The grand opening event will start at 11 a.m. and feature Arkansas Gov. Mike Beebe along with Koichi Funayama, acting consul general of Japan; Seiichi Sudo, president of Toyota Motor Engineering & Manufacturing North America Inc.; and Shoji Kondo, president of Hino Motors Ltd. About 200-plus community leaders and Hino suppliers are expected to attend the opening. Japan-based Hino Motors manufactures trucks, buses and other automobiles.

[Johnny Ryall]

Hino brings new production line to Marion
Memphis Business Journal

Hino Motors Manufacturing USA is a division of Japan-based Hino Motors Ltd. which manufactures trucks, buses and other automobiles. Hino Motors Manufacturing USA Inc. will begin producing truck frame rails at its Marion, Ark., plant April 19. Hino is shifting production of the rails from its plant in California to the Marion plant. From Marion, the rails will be shipped to Ontario and West Virginia for assembly. Hino manufactures truck parts for its own vehicles and Toyota’s Sundra and Sequoia vehicles in Arkansas. It currently employs about 325 people in Marion. Hino officials could not immediately be reached for comment on how many jobs would be created through the new production lines.

Frank Fogleman, mayor of Marion, said Hino’s local management has worked to expand the services the plant can provide to keep its workers employed. Last February, Hino announced it would permanently lay off 157 of its Marion employees after months of decreasing production at the plant during the summer of 2008. Fogleman said he didn’t know how many jobs the new line would create. “It’ll stabilize their work force and give them the diversity to produce and expand,” Fogleman said. “The economy has been hard on everybody and their efforts have paid off.”

[Johnny Ryall]

Ernest Withers museum to open in May on Memphis' Beale Street
Memphis Business Journal

Exterior of 333 Beale, where the Withers Museum Collection & Gallery will open next month


The Withers Museum Collection & Gallery will open a 3,000-square-foot storefront operation at 333 Beale Street in six weeks. The entire museum project will be 7,000 square feet. The first phase will include a set of Withers images curated and installed by Tony Decaneas of Panopticon Gallery in Boston. In addition to about 40 pieces of art hanging in the space, smaller versions printed as posters and postcards will be available for sale. Initial plans call for the space to be open to the public six days per week and also available as a rental venue for events.

The Withers Collection, a nonprofit organization dedicated to preserving the cultural archive of Ernest Withers photography, is developing the gallery and museum. Withers, who died in October 2007, had a 60-year body of photography work. His subjects included everything from Elvis Presley to Beale Street to the civil rights movement.

Developers are targeting the last weekend in May to open the initial gallery on Beale. The opening will coincide with a spate of recent development on the east end of Beale Street including the opening of Lil’ Anthony’s Cafe, renovations to the entrance to the W.C. Handy historic home and the imminent openings of the Red Rooster and Ground Zero Blues Club.

“Truly a cultural linchpin holding together so much history of Beale and Memphis, the addition of Withers’ images will mean a great deal to our daytime tourism efforts,” John Elkington, chief executive officer of Performa Entertainment Real Estate Inc., said. “We hope that every school in the area will add the Withers Museum Collection & Gallery to the field trip list and show students these important images.” Plans for the museum were originally announced in May 2009.

[Johnny Ryall]

Lucite International to invest $90 million in Memphis facility, seeks PILOT
Memphis Business Journal - by Andy Ashby

Lucite International Inc. is applying for a payment-in-lieu-of-taxes abatement from the Memphis and Shelby County Industrial Development Board to modernize its Fite Road facility and invest in its office headquarters at 7275 Goodlett Farms Parkway. The potential $90 million project would retain 200 jobs with an annual average base pay of $89,531. With benefits, the average annual salary is $129,463. Lucite’s initial $90 million investment could ramp up over the next five years to a total capital investment of $135 million.

The IDB staff is recommending a 15-year tax assessment freeze on real and tangible person property. The board will meet on April 21. The PILOT could save the company $6.6 million in taxes over the 15 years. The IDB staff notes the project would have a cost/benefit ratio of 3.36, meaning every tax dollar abated would result in $3.36 of monetary benefit to the community in the form of indirect jobs created as a result of this project, sales taxes and residential property taxes.

Lucite is a wholly-owned subsidiary of Lucite International Group Limited, which was acquired by Mitsubishi Rayon Co. Ltd. in 2009. Lucite has a manufacturing facility at 2665 Fite Road which was constructed in the 1960s. The company is looking to upgrade its facility to utilize its Alpha Technology, a process which saves it money on its core business, which is designing, developing and manufacturing acrylic products. If selected, Memphis would be the only Lucite facility in the U.S. to use this technology. The company has a facility which can do this in Singapore. Lucite had received PILOTs in 1995 and 1998, both of which have expired. The company is paying real and personal property taxes on those previously exempt properties. The company’s application states that if the investment is not made, production would be shifted to Lucite’s facilities outside Shelby County and would probably lead to the plant closing.

The IDB passed a retention program late last year that makes companies eligible for PILOT benefits for expansions even if they don’t add jobs. A company must invest at least $10 million in capital improvements and remain in Memphis to be eligible. The program was initiated so good, long-standing companies in Memphis would remain here and not take jobs elsewhere.

[Johnny Ryall]

Center City committee clears path for construction of two new Downtown Memphis buildings
Memphis Business Journal - by Andy Ashby

The Center City Revenue Finance Corp. approved on Wednesday a pair of tax abatements for commercial projects Downtown. The first payment-in-lieu-of-taxes, a seven-year abatement, was for Carlisle Corp.’s plans to build a 16,000-square-foot office at 263 Wagner. Carlisle Corp. currently leases office space at Peabody Place for its 35 employees. It is considering a site in Olive Branch as well. If it picks Downtown Memphis to build its new office building, the company would try for a Leadership in Energy and Environmental Design designation. The total development cost will be $2.7 million, which includes $933,300 in property acquisition, $1.68 million in construction costs and $100,000 in architecture, financing and legal fees. Construction is scheduled to begin in May and be done by August.

The CCRFC also approved a 10-year PILOT for Greenbriar Partners LLC to build a new mixed-use building at 436 S. Front. The company plans to demolish the existing building, which formerly housed S&S Custom Cabinets, and construct a property with 1,500 square feet of ground floor retail space, 25 apartments and 25 underground secured parking spaces. The apartments will consist of 20 one-bedroom units and five two-bedroom units. The total development cost is $2.5 million. Construction on the 29,000-square-foot building is planned to start in August and be completed by June 2011. The CCC’s Design Review Board will review the design plan on May 5. Kendall Haney Realty Group and the Downtown Condo Connection will lease the apartments and retail spaces. Greenbriar Partners owner Vince Smith has experience Downtown, having developed 420 South Front Condos, a 36-condo mixed-use project across from The Nettleton Luxury Condominiums.

[Johnny Ryall]

Graceland owner sees development, attraction fit for a king
Bullish Sillerman short on development details
the Commercial Appeal | By Wayne Risher

Graceland's corporate owner came to Memphis on Wednesday bearing assurances that he's committed to a massive redevelopment of the area surrounding Elvis Presley's iconic home. Emerging from a City Hall meeting with City Council, Greater Memphis Chamber and Graceland officials, Robert F.X. Sillerman, chairman and CEO of CKx Inc., had some advice for Memphians: "They should get out of their chairs and go to Graceland five or six times now and five or six times again during the year so they can say they remember it before we turned it into the spectacular that it is going to be."

Sillerman, whose entertainment company added Graceland to its portfolio in 2004, and his legal team met with council chairman Harold Collins, chamber president John Moore and Elvis Presley Enterprises CEO Jack Soden. Collins said discussion included the status of plans to improve Elvis Presley Boulevard and importance of a top-quality redevelopment for residents of long-established Whitehaven neighborhoods that border the site. Public improvements and the creation of a tourist-development zone are among incentives that city government has put on the table. "There was some discussion about timetables, but there was nothing definite except for Mr. Sillerman making a commitment that they were willing to do the development," Collins said. "This is a project that's going to be a massive undertaking. It's important that before it's unveiled, the community gets to share in the presentation of the project," Collins added. "It's important that Mr. Sillerman understands this is a high level of people he's going to be talking to when he unveils his plan."

City engineers have scheduled a meeting to present preliminary information about the road project and get residents' input from 6 to 8 p.m. April 26 at Whitehaven Community Center, 4318 Graceland. The revamp of Whitehaven's main street will start at the Brooks Road intersection and extend perhaps as far south as Shelby Drive, with state of Tennessee approval necessary since it's also U.S. 51.

Collins said Sillerman didn't give details of the development master plan, which CKx said in its annual report last month was being reconfigured after original designs were discarded. "He did not talk specifics of what the design would be or what it would look like, and I did not press him on that," Collins said. Chamber officials wouldn't comment, citing confidentiality of pending development matters.

CKx confirmed sale rumors last month after The Wall Street Journal reported that the company might be sold to a private-equity division of JP Morgan Chase. CKx spokesman Ed Tagliaferri said Wednesday that there was nothing new on the potential sale. Staff reporter Amos Maki contributed to this article.