Tag: development

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Opinion

Auctioning Memphis

From South Memphis to Southwind, Memphis is losing value. Two people who ought to know say so. Both are professionals, and neither is an alarmist or a naysayer.

One of them is Shelby County asssessor Rita Clark, whose job is putting a dollar value on houses, buildings, and land for tax purposes. The other is auctioneer John Roebuck of Roebuck Auctions, one of the leading real estate auction firms in the South.

They calculate value differently. Clark and her staff use computer models, comparables, sales histories, and first-hand “windshield” inspections. Roebuck wields a microphone and a gavel and stands in front of a group of buyers and opens the bidding.

But they’ve come to the same conclusion: Real estate prices are declining, which reverses a long trend of increasing values.

“Memphis is a strange city that does not dip and rise like other parts of the country,” Roebuck said. “Right now, Memphis is down about as far as I can remember in 30 years.”

He said people are leaving the city, demand for housing is low, and there is a surplus of new homes and condos. Even the owners of some million-dollar homes are turning to auctions as a way to unload their property.

“Auctions get a bad rap,” Roebuck said. “An auction typically brings the true market value that day. Appraisals are just one man’s opinion.”

He expects to see “a substantial reduction” in home values in the next countywide reappraisal in 2009, leading to an overall decline in the tax base.

Clark doesn’t disagree with that evaluation.

“Absolutely,” she said, when asked if the tax base in Memphis could be shrinking, although she declined to put a number on it at this time. “We follow the market. We don’t predict the market.”

Clark will leave office next September after serving 10 years. In the 1998, 2001, and 2005 reappraisals, the total value of assessed property in Memphis increased an average of 14 percent each period. The suburbs were up even more, led by Collierville (up 24 percent in 2005) and Lakeland (up 30 percent in 2005).

Higher property appraisals are an indication of a healthy economy and provide a cushion for Memphis and Shelby County governments, which operate primarily on property taxes and sales tax. If housing prices continue to fall, lower appraisals will mean lower tax collections and less money for schools, police and teacher salaries, sports facilities, parks, and debt service.

There is also the prospect of no tax collections at all from some property owners. Memphis is one of the top foreclosure markets in the country. Foreclosures are expected to get worse in 2008 as subprime mortgages are reset at higher rates.

The usual way to balance the budget in Memphis and Shelby County is with a tax increase, but Memphians already pay the highest property tax rate in Tennessee. The smell of scandal is in the air. Houses aren’t selling. Values are declining. Mayor Herenton got only 43 percent of the vote. The 2008 City Council will have nine new members. And they’re going to increase taxes? Don’t think so.

Other signs point to a stagnant city that is getting poorer, not richer. In banking as in real estate, it looks like the big money has been made for a while. This has been an awful year for banks. The stock price of First Horizon, the last of the big Memphis-based banks, is $21 a share compared to $43 a year ago. The share prices of other regional banks with a big presence in Memphis, including Regions, Renasant, Trustmark, and Cadence, are all down at least 30 percent this year and are at or near five-year lows. FedEx, our corporate jewel, is off 15 percent so far this year.

At the risk of piling on, there is an unsettling tone in the public relations campaign to “liberate” the National Civil Rights Museum from “corporate interest domination.” Unsettling because it sounds like the preelection rhetoric of our soon-to-be fifth-term mayor who as much as wrote off the white vote. So much for public-private partnerships.

The $30 dinner entrée, the $570 a night hotel suite, the $140 Grizzlies ticket, the $45,000 SUV, the $40,000 a year college tuition, and a $30 million public boat landing look like relics of a golden age. Let’s hope Memphis can still support them a year from now, but I wonder.

Categories
News

Memphis Selling For Less

CREDIT: image: venturacountystar.com

From South Memphis to Southwind, Memphis is losing value. Two people who ought to know say so. Both are professionals, and neither is an alarmist or a naysayer.

One of them is Shelby County asssessor Rita Clark, whose job is putting a dollar value on houses, buildings, and land for tax purposes. The other is auctioneer John Roebuck of Roebuck Auctions, one of the leading real estate auction firms in the South.

They calculate value differently. Clark and her staff use computer models, comparables, sales histories, and first-hand “windshield” inspections. Roebuck wields a microphone and a gavel and stands in front of a group of buyers and opens the bidding.

But they’ve come to the same conclusion: Real estate prices are declining, which reverses a long trend of increasing values.

“Memphis is a strange city that does not dip and rise like other parts of the country,” Roebuck said. “Right now, Memphis is down about as far as I can remember in 30 years.”

He said people are leaving the city, demand for housing is low, and there is a surplus of new homes and condos. Even the owners of some million-dollar homes are turning to auctions as a way to unload their property.

“Auctions get a bad rap,” Roebuck said. “An auction typically brings the true market value that day. Appraisals are just one man’s opinion.”

He expects to see “a substantial reduction” in home values in the next countywide reappraisal in 2009, leading to an overall decline in the tax base.

Clark doesn’t disagree with that evaluation.
“Absolutely,” she said, when asked if the tax base in Memphis could be shrinking, although she declined to put a number on it at this time. “We follow the market. We don’t predict the market.”

Clark will leave office next September after serving 10 years. In the 1998, 2001, and 2005 reappraisals, the total value of assessed property in Memphis increased an average of 14 percent each period. The suburbs were up even more, led by Collierville (up 24 percent in 2005) and Lakeland (up 30 percent in 2005).

Higher property appraisals are an indication of a healthy economy and provide a cushion for Memphis and Shelby County governments, which operate primarily on property taxes and sales tax. If housing prices continue to fall, lower appraisals will mean lower tax collections and less money for schools, police and teacher salaries, sports facilities, parks, and debt service.

There is also the prospect of no tax collections at all from some property owners. Memphis is one of the top foreclosure markets in the country. Foreclosures are expected to get worse in 2008 as subprime mortgages are reset at higher rates.

The usual way to balance the budget in Memphis and Shelby County is with a tax increase, but Memphians already pay the highest property tax rate in Tennessee. The smell of scandal is in the air. Houses aren’t selling. Values are declining. Mayor Herenton got only 43 percent of the vote. The 2008 City Council will have nine new members. And they’re going to increase taxes? Don’t think so.

Other signs point to a stagnant city that is getting poorer, not richer. In banking as in real estate, it looks like the big money has been made for a while. This has been an awful year for banks. The stock price of First Horizon, the last of the big Memphis-based banks, is $21 a share compared to $43 a year ago. The share prices of other regional banks with a big presence in Memphis, including Regions, Renasant, Trustmark, and Cadence, are all down at least 30 percent this year and are at or near five-year lows. FedEx, our corporate jewel, is off 15 percent so far this year.

At the risk of piling on, there is an unsettling tone in the public relations campaign to “liberate” the National Civil Rights Museum from “corporate interest domination.” Unsettling because it sounds like the preelection rhetoric of our soon-to-be fifth-term mayor who as much as wrote off the white vote. So much for public-private partnerships.

The $30 dinner entrée, the $570 a night hotel suite, the $140 Grizzlies ticket, the $45,000 SUV, the $40,000 a year college tuition, and a $30 million public boat landing look like relics of a golden age. Let’s hope Memphis can still support them a year from now, but I wonder.

Categories
News

Criticism Arises for Elkington’s Farish Street Project In Jackson, MS

Beale Street developer John Elkington’s Performa Entertainment company is being criticized by civic leaders in Jackson, Mississippi, for a lack of progress in the proposed Farish Street project.

From the Jackson Free Press: The Farish Street District Redevelopment Ad Hoc Committee and Jackson Mayor Frank Melton lobbed complaints about the lack of development progress in the Farish Street Entertainment District at a public forum last week. Committee members, including chairman Harold Lathon and hip-hop artist and Jackson Free Press columnist ‘Kamikaze,’ hurled complaints at Memphis-based Performa Entertainment Real Estate Inc., which is overseeing development of the project.

Kamikaze pointed out that Farish Street languishes in blight while other portions of downtown blossom with new development.

“If you stand in front of the site of the convention center and look a stone’s throw away from the convention center, you still see the blight that exists on Farish Street,” Kamikaze said. “Nobody’s doing anything about it.”

Melton proposed to take the Farish Street contract away from Performa.

“Over the last four or five weeks, there’s been nobody working on the entertainment district,” Melton said. “We’re going to pull that contract and get some local people who can get that done.”

Melton criticized the absence of Mid State Construction workers on Farish Street, telling the crowd that contractors working with the Memphis company told him that Performa had been stiffing them out of their pay. “I called (Mid State), and they say they haven’t been paid in the last three months, and that’s why they’re not down there (working) anymore,” Melton said.

Mid State Chief Operations Officer P.G. Bernheim said Mid State had completed Phase 1 of the project and was “waiting for Phase 2 and Perform’s direction on it.”

“I talked to (Performa’s Vice President of Development) Cato (Walker) Tuesday or Wednesday of this week, and I feel optimistic about the situation,” Bernheim said.

Walker admitted Performa owed Mid State money, but added that rumors were flying about the two companies’ relationship.

“Positions have been made about our circumstances without anyone ever calling to see if those were true,” Walker said. “We are working with the state and our lender to close out Phase 1, and we’re paying Mid State the money that they are owed.”

Read the rest at the Free Press website.

Categories
News

Elkington’s Birmingham Development Hits Delay

Beale Street developer John Elkington is facing price increases and delays in building an entertainment district in Birmingham.

Earlier this year his firm Performa Entertainment Real Estate was chosen by the Birmingham-Jefferson Convention Complex to develop the downtown project, but economic factors, including a credit crunch, have slowed progress there. Although Elkington had hoped to secure funding in the amount of $50 million by the end of 2007, he told The Birmingham News that the total investment would be closer to $80 million. A Birmingham firm is helping Elkington find funding. If obtained by spring of 2008, the district would open by summer 2009.

Despite delays, Birmingham officials are excited about the project, which includes hotels and nightclubs opened by American Idol winners Taylor Hicks and Ruben Studdard. The city is also exploring the possibility of a domed stadium.

Read the story here.

Categories
Living Spaces Real Estate

Yea-sayers

CREDIT: Artist Rendering Courtesy of the Bryan Company

They said it couldn’t be done: a high-rise condominium development in downtown Memphis? Two towers, 300-plus units, 16 floors? World-class amenities, unparalleled views, big bang for the buck? Not gonna happen, they said, because who’s gonna buy it?

Well, what do they know?

That was the message at the recent groundbreaking ceremony for phase one of the Horizon, Memphis’ newest upscale condominium development. Gary Garland, president of the Garland Company and the Horizon’s development manager, summed up a common response over the last couple years to the project’s prospects: “There were naysayers in Memphis, Tennessee, who said, ‘Y’all will never get this done.'” And yet, there Garland stood on Novermber 8th, along with Memphis mayor Willie Herenton, Shelby County commissioner Mike Ritz, the Horizon’s developer Steve Bryan of the Bryan Company, Center City Commission president Jeff Sanford, Memphis Convention & Visitors Bureau president Kevin Kane, and other local heavy hitters.

Artist Rendering Courtesy of the Bryan Company

A Rendering of the downtown high-rise.

Celebratory and a little defiant, Garland, Bryan, Sanford, and Herenton each took the podium, the golden shovels waiting nearby to make action verbs out of the promises touted by developers since the Horizon was first announced. “You’ll be able to watch this thing come up,” Garland said, his words reinforced by the sound of construction vehicles and a giant hole in the ground a couple dozen yards away. (The Horizon actually broke ground a few months ago.)

Herenton put his imprimatur on the event. “This is a great day in the history of the great city of Memphis,” he said. “This is an exciting time in the evolution of downtown for a great Southern city.

Developers and city officials, including Mayor Willie Herenton, break ground for the Horizon.

“I know a little bit about development, and this was a great risk,” Herenton said about the Horizon. But he added that the groundbreaking was a lesson about not listening to naysayers. He admitted he’s had his share over the years.

“We will make possible what you, naysayers, have said wasn’t possible,” Herenton added.

Sanford looked into his crystal ball, saying, “The Horizon will be the queen, I predict, of this terrific downtown neighborhood.”

The development’s amenities certainly sound royal: a private movie theater, a climate-controlled wine cellar with space for personal storage, indoor and outdoor pools, a putting green, a fitness center, a party and activity room with a fireplace, a 24-hour doorman/concierge, a business tech center, a tennis court, and a rooftop patio with views of the Mississippi River. And those amenities are just for the Horizon’s common areas.

“We decided we wanted to raise the level, and we’re doing it,” Bryan said of the vision for the Horizon. “We’re not finished,” he continued. “We have a long way to go.

“We’re going to change the horizon of the Mississippi River and downtown Memphis in a very positive way.”

Categories
News

Memphis City Council to Hear Beale Street Development/Performa Conflict Tuesday

Saying they were going to nullify their agreement with Performa, members of the Beale Street Development Corporation asked the City Council this morning to audit the management company.

The city signed an agreement with the Beale Street Development Corporation to redevelop Beale in 1982. Lacking management experience, the group subleased the responsibility to the company now known as Performa Entertainment Real Estate, owned by John Elkington.

Performa was supposed to take 15 percent of the rents from Beale Street establishments, then give the remainder of the funds to the development corporation, which was then to turn them over to the city.

“Since 1983, not a single dime has come back to the Beale Street Development Corporation or the city of Memphis,” said BSDC member Randell Catron, accompanied at the meeting by blogger Thaddeus Matthews.

In 2002, a chancery court decision ordered Performa to enter any current or future funds into an escrow account pending further orders of the court. However, Performa never paid any funds into escrow and the city did not pursue the matter.

“Those of us who have been here a long time counted on the administration to handle this and it has not been handled,” said Councilman Jack Sammons. “I got an e-mail last night about B.B. King playing and it’s $200 a ticket. A lot of money is being generated on that street.”

Echoing that sentiment, Charlie Ryan, an owner of Club 152 and Blues City Cafe, said his establishments have paid $1.1 million to Performa since 2003.

“As a tourist attraction, we need to make the area safe and clean, and John Elkington is in charge of doing that. We’ve paid $280,000 in the last four-and-a-half years [for common area maintenance] and we’re not getting what we paid for,” he said.

No one from Performa attended this morning’s meeting.

The council was expected to get an update on the ongoing litigation during an attorney-client meeting this afternoon. The council was also prepared to take up the matter in full session later today.

Categories
Politics Politics Feature

“I Need You to Help Me,” a Restrained Herenton Tells Chamber Audience

CREDIT: jb

In a conspicuously low-key but resolute appearance before a
Memphis Regional Chamber of Commerce audience at the Memphis Marriot East
Thursday morning, a newly reelected Mayor Willie Herenton proclaimed a broad
agenda for his fifth term and declared, “The next four years I’m hitting the
ground. I’m hitting it hard. I’m going to let it all hang out.”

Appearing subdued and almost somber at times, the mayor
laid before the packed audience at the Chamber’s “Breakfast Forum 280907” a wish
list of key objectives — prominently including city/county consolidation;
Fairgrounds and riverfront development; and resolution of issues involving Beale
Street and the National Civil Rights Museum.

“We need to consolidate. We’ve been singing that song, and
we’re going to open that hymnbook again,” Herenton vowed. He went on to note
wryly, “I’m not without bold ideas. I just don’t have the support.”

Acquiring such support on this and other issues would be a
major objective, he said, clearly striving to avoid a confrontational tone, “I
can’t do it by myself. I need you to help me,” he acknowledged, going so far as
to strike an accustomed note of modesty. “I’m just an average person,” declared
the man who on other occasions has seemed to profess divine sanction for his
actions.

Continuing in the conciliatory vein, he mayor said somewhat
pointedly, “I don’t want to be accused of bashing the media.” Nor did he, though
he ran through a laundry list of public concerns vented by the media (among them
Iraq, global warming, demographic shifts locally) and lamented, “We function on
negatives rather than positives.”

Though his remarks were largely cast in generalities, the
mayor seemed to take sides in the currently percolating controversy over
community-versus-corporate control of the Civil Rights Museum. “Without private
philanthropy and support, there is no museum,” he said emphatically.
That, he said without elaboration, was “more important” than feuds or the wishes
of individuals.

In introducing Herenton, Chamber president and CEO John
Moore had been at pains to credit the mayor with numerous positive achievements,
mostly in the sphere of economic development. This was a seeming response to
campaign rhetoric in which Herenton had frequently challenged the Chamber to own
up to his accomplishments.

In his own summing up Thursday, the mayor ticked off some
of the city’s blessings. Memphis possessed affordable housing and an inviting
tax base. It was “the largest air-cargo destination center in the world…the
largest mail-processing center in the United States… the second-largest
manufacturer of orthopedic-device medical devices in the United States.”

And, he said, Memphis was the smallest city to have both a
major airline hub (Northwest) and a National Basketball Association franchise.

“This city’s best days are ahead of us,” Herenton
concluded. “Let us embrace change and diversity. Let us be one city. I want to
be a part of that.”

In a brief
Q-and-A session with reporters afterward, the mayor attempted to minimize the
brewing argument between himself and the city council over who gets to appoint
council staff. “I never have selected anybody,” he said, stressing that his
mayoral prerogative to make such appointments was largely a formality – but one
he was prepared to litigate in order to preserve.

Categories
Opinion

Smart City and Friends

Tom Jones and Virginia McLean are making the Riverfront Development Corporation irrelevant.

Jones is the cofounder and main writer for the Smart City Memphis blog (smartcitymemphis.blogspot.com). McLean is the founder and chief activist of the nonprofit Friends for our Riverfront (friendsforourriverfront.org).

They are often on opposite sides of riverfront issues, including the proposed $29 million Beale Street Landing. Jones has emerged as its most articulate and well-informed defender. McLean, equally hip to the latest ideas and trends in parks and cities, is the RDC’s most passionate and dogged critic.

Both of them run on shoestring budgets and receive no money from local government or the RDC. Jones, a former newspaper reporter, was a spokesman and policy-maker for Shelby County government for some 25 years. McLean is an heir to the Overton family that was one of the founders of Memphis.

Their websites are timely and frequently updated, and they have become bulletin boards for unusually thoughtful comments, speaker listings, and even occasional news items. When a state official weighed in on Beale Street Landing this month and delayed the project, Jones and McLean were ahead of most if not all of the news pack spreading the word and collecting different points of view.

The RDC, in contrast, often seems muscle-bound. Created six years ago to focus public and private resources and cut red tape, it has a staff of former city division directors and City Hall cronies making six-figure salaries. It also has a blue-chip board of directors including public officials and downtown bigwigs. And it is consistently outhustled, outsmarted, and outmaneuvered by Jones and McLean and their helpers.

While Jones and McLean embrace the Internet and rough-and-tumble debate in real time, the RDC’s website is outdated and trite. “Steal away to a day’s vacation in the city’s front yard,” says the home page. “Nowhere else can you feel the rush of the Mighty Mississippi as its breeze flows through your hair and its sunsets warm your soul.” The most recent “news” is a June 12th press release and a year-old item about the Tom Lee Park memorial. The description of the master plan still includes the aborted land bridge to Mud Island and pegs the total public cost at a staggering $292 million, which “will spur $1.3 billion in private investment in real estate alone” and bring “a minimum” of 21,000 new jobs and 3,400 new residential units to downtown.

Meanwhile, Jones and McLean are slugging away about the latest delays to Beale Street Landing and the next meeting of the Shelby County Commission. Within the last year, each of them helped bring national experts to Memphis for well-attended discussions of parks and citizen activism. The RDC, meanwhile, made a by-the-numbers Power Point presentation to the Memphis City Council aimed at justifying its own existence as much as informing public officials.

The RDC is not without is success stories. Its park maintenance is exemplary. Its concert series and improvements at Mud Island have made the park more attractive. Its structure involves business leaders and nonprofits in a way that government cannot, although the group’s standard claim that it saves money is difficult to prove.

But the riverfront — Tom Lee Park in particular — often seems antiseptic and sterile, like a set-piece instead of a true park. On Sunday afternoon, for example, hundreds of people came to Overton Park in Midtown to beat on drums, whack golf balls, ride bikes, pick up trash, have picnics, toss balls, exercise dogs, visit art galleries, stroll babies, and do whatever. Midtown has no development authority, but funky Overton Park is surrounded by neighborhoods that feel invested in it.

Beale Street Landing looks more and more like a bet-the-company deal for the RDC. Without a big project — the land bridge (aborted), the promenade (still stalled), the relocation of the University of Memphis law school (coming soon) — why not turn its duties back over to a reenergized park commission and city administration? The Memphis riverfront, from The Pyramid to Mud Island to the trolley to proposed Beale Street Landing, doesn’t lack for big investments. It lacks vitality, a decent public boat launch, walkable cobblestones, a skate park or something fun to watch, a working fountain next to the Cossitt Library, and enough shade and sprinklers to give tourists a fighting chance against the heat.

If those things happen, it will be because of citizens like Jones and McLean and their readers as much as the RDC.

Categories
Living Spaces Real Estate

No Vacancy?

When Jennie Hill returned home from college last spring, she knew she wanted something different from “my other life,” as she puts it, referring to growing up in the suburbs of Memphis. Close proximity to her job as an intern architect with Looney Ricks Kiss Architects was a priority, as was being a part of the hubbub of city life.

“I wanted to be downtown because that’s where stuff happens,” Hill says. “There’s always something going on, with plenty of cool things to do.”

Though it took time, she eventually found an apartment on Mud Island she liked. She put down $300 in May as earnest money to hold a place that wasn’t even available until September. And her rent, at $725 for a 630-foot studio, is steep. As more young professionals clamor to call downtown home, they may find locating a rental tricky — in a neighborhood that’s increasingly tight for apartment space.

Condo conversions have played a significant role in the shrinking of apartment stock downtown. Over the past several years, signature apartment buildings like the Shrine, the Lofts at South Main, Claridge House, RiverTower at South Bluff, and Paperworks (the first warehouse-to-apartment conversion in the South Main district), have all been converted to condominiums. According to figures from the Center City Commission, 593 apartment units have gone condo. And the conversion craze hasn’t stopped at downtown’s doorstep.

Memphis Is a Good Deal

Investors from across the country have been scooping up older high-rise properties from Midtown to Germantown. For example, the Glenmary at Evergreen (formerly Woodmont Towers) on North Parkway is being developed by the Gintz Group from Tacoma, Washington, and Nashville-based Bristol Development converted the former Park Place apartments in Germantown into a condo development called the Monarch.

Part of Memphis’ appeal is its high occupancy rate, coupled with a strong national economy and the relative affordability of properties compared to other urban markets. “Investors are seeing that nationally, Memphis might be the last bastion of condo conversions because it’s been overlooked for so long,” says LEDIC Management CEO Pierce Ledbetter.

From a development standpoint, conversions have been a good thing for properties that were in need of refurbishing. A case in point is RiverTower at South Bluffs (formerly the Rivermark), a downtown rental property that had languished in an ’80s time warp until being purchased and converted to condominiums by McCord Development, Inc., based in Houston, Texas.

RiverTower, overlooking the Mississippi, has gone from hotel to apartment house to condos.

While offering exceptional views of the Mississippi River, the 240-unit complex suffered from “an identity crisis,” notes Ledbetter, referring to the building’s history as a hotel and later apartment high-rise, which left it with an odd mix of both spacious and cramped apartment units. With its purchase by McCord Development, an assets management and development firm, the building received a complete renovation and is now selling stylish one-, two-, and three-bedroom condo units. McCord has developed similar high-rise communities in Texas, California, and Florida.

“What [investors] like to see is a city with a reduced supply of land, high occupancy rates, and increasing rents,” says Ledbetter, whose company is the largest apartment and condominium manager in the city. “That makes it much easier for banks to underwrite the loan for the property. And with so many good things going on downtown, it keeps driving the trend.”

High Occupancy Rates

According to “The Source: Greater Memphis Area Multifamily Market Statistics for 2006,” a survey released by the Apartment Association of Greater Memphis, occupancy rates downtown hover at 94.6 percent, almost five points above the countywide rate of 90 percent. (The Center City Commission — CCC — pegs downtown’s rate closer to 91 percent.) Living downtown also costs apartment dwellers more. The survey, which canvassed 50,000 apartment units in 12 submarkets, looked at categories such as amenities, rents per-square-foot, and floor plans. Their findings: The average rent for a 950-square-foot apartment in Shelby County is $685, but downtowners can expect to pay $893 for a slightly smaller space, at 917 square feet. Though rents may be higher downtown, Leslie Gower, director of communications for the CCC, says their market research shows most people prefer to live where their social life is and commute to work. Since downtown’s entertainment sector has strengthened, so too has its desirability as a neighborhood.

Are more apartment complexes on the horizon for downtown? Such high occupancy rates would suggest they’re needed, particularly with the addition of the University of Memphis’ law school soon to call Front Street home. “Downtown is probably ripe for more apartment units,” agrees Amy Carkuff, who’s been involved as an interior designer with a host of condo projects downtown. “I think there’s a market for students and young professionals.”

Manny Heckle, president of the Apartment Association of Greater Memphis and HM Heckle, a properties management firm, says, for him, the question is simple: “How many condos are selling and how many will revert back to rentals? I would say too many condos have hit the market in the last few years. I think we’re condo-saturated.”

View of the Claridge House on Main Street: facade.

View of the Claridge House on Main Street: bedroom.

Those thoughts prompted developer Jason Wexler to put his money in the rental market. Wexler’s company, Green Hat Partners, already has completed two historic rehabs (Cornerstone and Main Street Flats apartments), and he’s now among a handful of developers working on creating additional apartment buildings downtown. Radio Center Flats, a project currently under way at the old WDIA building, is one of Wexler’s projects; and according to the CCC, there are 14 other apartment developments in the planning or construction phase for downtown.

View of the Claridge House on Main Street: lobby.

Paperworks in the South Main District is Memphis’ first warehouse-to-apartments conversion.

“We’ve been pretty cautious about condos and decided not to go that route because of the number that have come online,” Wexler says. “We thought there was a need for more apartments in the downtown core, in part because of the number of projects that were going from rental to condo conversion.” The combined buildings will eventually create 587 new apartment units. But when you consider that condo conversions have removed 593 rentals from the market, the likelihood is that the rental market downtown will continue to remain tight.

“We do minimal marketing or advertising, and our occupancy rate is 100 percent most all the time,” says Wexler. “We rely on word of mouth or put an ad on apartments.com to find new tenants.”

Glenmary, a high-rise located on North Parkway, was once Woodmont Towers.

And who knows? That may simply add to the luster of nabbing a downtown address. ■

Categories
News The Fly-By

Outer Limits

CREDIT: David Seymour | dreamstime.com

For more than a year, I’ve driven out to Collierville at least once a week because of roller derby.

When people would ask me for directions to the bouts, I’d tell them to get on Bill Morris Parkway and drive until it ends. You’ll pass Winchester, the Mike Rose soccer complex, and the Avenue at Carriage Crossing shopping center, and when you see the orange barrels and can’t go any farther, that’s when you know you’re there.

But I can’t say that anymore. Last month, a new section of Bill Morris opened. The new stretch runs from Highway 72 to Piperton, cutting the drive considerably.

The project, part of Memphis’ new outer loop, cost taxpayers $36 million and brings Fayette County closer than ever before. But — no offense to Fayette County — is that really a good thing?

USA Today ran a story last week about more people being on the road earlier than ever before to beat morning rush hour. According to recent census figures, one worker out of every nine left for work before 6 a.m. in 2001; in 2006, it was one worker in every six.

The newspaper noted that the “commuter-creep” — partially a result of suburban sprawl — affects everything from “the breakfast-food industry to television viewership, from traffic-signal timing to newspaper delivery times,” as well as family relationships and personal health.

People are literally going to work too early and getting home too late to see their families. All because they’re trying to get to work on time.

I’m not against development. Whenever I hear people disparage suburbanites or say that they “hate the suburbs,” I find it ironically close-minded. Many of the city’s most beloved neighborhoods were once considered suburbs. The style of the houses may be different, but the basic idea is still the same: Give people a place where they have their own space but are not completely isolated.

There are also powerful incentives to living and building outside developed neighborhoods. Because of codes and zoning regulations, it’s often easier, not to mention cheaper, for developers to build on previously undeveloped land than to reuse land in the heart of the city.

Let’s say you want to build a new shopping center. You’ll want to attract a national retailer as a tenant, but they’re going to want a certain number of parking spaces for their customers and that can mean a lot of land.

Despite the reasons for sprawl, people are beginning to see the problems it causes. A Pew Center for Civic Journalism study found that Americans are beginning to think of sprawl as important an issue as crime, taxes, and education. Probably because sprawl affects all those things.

I recently heard one urban planner theorize that women, specifically suburban soccer moms, are “driving” a national movement back to the city limits. This is a group that spends large portions of their time in cars, shuttling children from one activity to the next, getting groceries, and doing errands. Who could blame them for wanting to consolidate their destinations?

Add in high gas prices and the inner loop of a city looks pretty good.

On a community level, sprawl has contributed to the financial problems of Shelby County, creating false growth through migration and coring once-vibrant areas.

The problem, however, is that sprawl is akin to gaining weight. Once it’s there, it’s difficult to get rid of it.

But there may be a way. On Thursday, the local Urban Land Institute and the UrbanArt Commission are presenting a free screening of Save Our Land, Save Our Towns, a film about the causes and effects of urban sprawl along with possible remedies.

Journalist and Pulitzer Prize winner Tom Hylton began his study of sprawl after the high school across from his house was closed and demolished because of declining enrollment. Visiting Pennsylvania, North Carolina, and Oregon, Hylton found that codes and zoning laws can have an enormous impact on sprawl.

Incentives and tax credits can also help. If building is easier and more inexpensive outside the city, something has to be done to make redeveloping land within the city limits more attractive.

But, for those who have the means, there’s one simple solution for both extra weight and urban sprawl: Just move.