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Bah, Humbug!

Christmas — the season in which we have traditionally been bombarded with the concept of giving as the supreme example of our embrace of mankind. However, as a beleaguered Memphis taxpayer, I dare to resurrect the words of Charles Dickens’ Ebenezer Scrooge: “Bah, humbug!” For when it comes to merrily endorsing some of the “pie in the sky” projects proposed by the administration of Mayor A C Wharton, I’m not sure whether the beneficiaries of our collective financial outpouring classify as indigents rivaling the undeniable needs of Dickens’ fictional, heart-tugging Tiny Tim.

Les Smith

This realization was brought home to me in reporting on the chaos of a marathon session of the Memphis City Council earlier this month. A dayside committee meeting began with the abrupt cancellation of a scheduled discussion on the progress the Memphis Police Department is supposed to be making on processing more than 12,000 rape kits accumulated over decades. Since the issue surfaced in August, I’ve taken a particular interest in the results. It’s not because I know or suspect someone I know may have been victimized. As human beings, the savagery of the crime should disturb us all, because it transcends racial and socioeconomic lines.

However, after sounding the gavel, committee chairman Kemp Conrad informed those present that the rape-kit report was going to be delayed for two weeks. We would find out later that the Wharton administration had quietly asked for more time due to the possibility more untested kits had been discovered. In his last appearance before the same committee, Memphis police director Toney Armstrong said the processing and testing would cost $4.6 million to complete. But Wharton strongly indicated the numbers could rise and also put forth the concept that more outside assistance might be needed. Granted, this whole project has “sensitive” written all over it, especially since it involves legal ramifications for potential victims and perpetrators alike. This is probably going to cost taxpayers a lot more than has been reported. However, the truth, at whatever cost, would be welcomed.

That same day, some council members were given a “sneak peek” at plans for the creation of the 20-block “Memphis Heritage Trail” downtown redevelopment project. Armed with an animated depiction of what it’s supposed to look like, city special-projects guru Robert Lipscomb spoke about interactive experiences for visitors and monuments dedicated to Martin Luther King Jr. and a commemoration of the 1968 sanitation workers’ strike.

The presentation was harpooned by Councilwoman Wanda Halbert, who succinctly condensed the doubts Memphis taxpayers have continued to express with Wharton’s still unexplained “vision” for this city’s future. To paraphrase her comments: With so many projects —the Fairgrounds, Bass Pro and the Pinch District, Sears Crosstown, buying Autozone Park — are we spreading ourselves too thin financially? Are we overlooking the things that should count, like paving streets, improving parks, and building sidewalks near schools? And although Halbert didn’t include it, the need to process thousands of untested rape kits.

I know Wharton cares about making his vision of “One Memphis” come true. In a June interview with him, he admitted to me that he had to do a better job communicating with council members. He needs to convey the same sense of purpose and direction to a somewhat bewildered public. I understand this city faces the same financial challenges confronting local governments in nearly every city in America. But I suggest to you, Mr. Mayor, that while grandiose projects have their allure, they are overshadowed by the day-to-day demands of life.

If you want to take guns off the street, go ahead and try. If you want to aggressively clean up neighborhoods, then do so. If you want to achieve the moniker we had in the 1960s of being the “Cleanest City in America,” that would be a worthy and possibly attainable goal.

Yes, other revenue sources have to be explored to get us out of our current and ever-deepening budget dilemma. So, why not start a vigorous collection of the millions of dollars owed in parking fines? Why not collect from the companies that owe this community millions in unpaid property taxes? Until there is a determination shown to address the issues we can and should take care of, then all the governmental “pie in the sky” proposals will invoke the same reaction no matter what season of the year: “Bah, humbug.”

Les Smith is a reporter for Fox News 13.

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News News Blog

Crosstown Redevelopment Project Gets Funds To Improve Area Surrounding Building

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Although developers are still awaiting a $15 million commitment from the city toward the $175 million project cost for revitalizing the abandoned Sears Crosstown building into a medical, arts, and residential hub, $300,000 has recently been awarded to improve the surrounding Crosstown neighborhood and parts of the building.

The Crosstown Development Project was awarded a $50,000 regional planning award from the U.S. Department of Housing and Urban Development to extend the V&E Greenline across North Parkway and through the Crosstown site.

A $250,000 grant from the Delta Regional Authority will be used to implement a plan to equip and program a “theater stair” in the main atrium of the Crosstown building. The theater stair is a wide staircase that will be equipped with audio-video equipment for public lectures and performances. It will be wide enough to both serve as a functional staircase between the first and third floors and seating for performances and spillover seating for the building’s planned cafe.

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News News Blog

Land Use Control Board Approves Crosstown Redevelopment

The Shelby County Land Use Control Board voted Thursday morning to approve the planned redevelopment of the abandoned Sears Crosstown building into a “vertical urban village” that will be home to the Church Health Center, Gestalt Community Schools, Methodist Healthcare, and other medical, office, retail, and residential uses.

“I welcome this change for those of us who live in Midtown and use that post office [on Autumn] and have to look at that huge empty garage,” said Land Use Control Board member Margaret Pritchard, referring to the parking garage in the Sears lot.

The Office of Planning and Development (OPD) had recommended the Land Use Control Board approve the project but with a few conditions. The plans for the redeveloped Crosstown project include opening up Claybrook to make it a through street. Currently, Claybrook dead ends on either side of the Crosstown building, but the redevelopment plans call for opening up the street. The north side of Claybrook would then be used as a drop-off point for Church Health Center patients.

“We think that’s a relatively busy intersection [at North Parkway and Claybrook], and we think there are opportunities in other areas of the site to achieve what the applicant wants to do,” said OPD principal planner Gregory Love.

But Cindy Reaves of SR Consulting, who represented the Crosstown developers, told the Land Use Control Board members that the access point on Claybrook was critical for Church Health Center’s medical facility. She assured the board that there would be no big truck traffic, just vehicles of Church Health Center patients. The main entry point for other uses of the Crosstown building will be at Autumn near Cleveland and Watkins.

“Sears cut off the neighborhood when that building was built. We want to reconnect the neighborhood back into the development,” said Tony Bologna of Bologna Consultants, also representing the Crosstown developers.

Donna Palmer, a Crosstown resident who lives on Forrest, spoke in favor of the board allowing developers to make Claybrook a through street.

“I’m the most affected neighbor for the Claybrook entrance, and I support this,” Palmer said.

There were no opponents for the Claybrook access or the project as a whole. In the end, the board approved the project and voted to allow Claybrook access pending the outcome of a traffic study by the city engineer’s office.

If all goes according to plan, construction on the project will begin in early 2014, and tenants of the building hope to move in by 2016. That timeline is contingent on Memphis Housing and Community Development Director Robert Lipscomb locating $15 million in public funds to pay for necessary infrastructure improvements. The total project cost is estimated to be $175 million, with the majority of that money coming from the building’s founding partners — Church Health Center, Methodist Healthcare, Gestalt Community Schools, St. Jude Children’s Research Hospital, ALSAC, Memphis Teacher Residency, Rhodes College, and Crosstown Arts.

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Opinion Viewpoint

Questioning Crosstown

I am old enough to remember going to the Curb Market in Crosstown with my mother and buying a bushel of snap beans for canning. I would have to spend the rest of the day cleaning and preparing them. On many occasions, we then went to the Sears Crosstown store. It was huge and impressive. It was built for a certain time and market, and whether it paid for itself over time I do not know. Looking at the Sears company today, you have to wonder about their long-term business knowledge. The Sears catalog was the Amazon.com of its day, and this store, I believe, was a catalog sales and warehouse center. Too bad they did not keep up.

Now we have a choice: Tear down the old Sears building or spend at least $175 million to turn it into another non-tax-producing renovation project. Where is the financial pro forma report on this project? If it is available, I would like to see it.

Let’s look at how this is currently being financed, according to a recent news report. The Crosstown Development team says it has essentially assured $160 million in funding — $25 million raised privately, $30 million in historic preservation tax credits, $15 million in new market tax credits, $10 million in grants and other sources, and an $80 million loan. Add the $15 million requested from the city of Memphis and you have the $175 million that is the supposed front-end cost.

Let’s take a look at a couple of these funding sources and their rationales.

• $30 million in historic preservation tax credits — This is from a legislative incentive program designed to encourage the preservation of “historical buildings.” Congress instituted a two-tier tax credit incentive under the 1986 Tax Reform Act. A 20 percent credit is available for the rehabilitation of historical buildings, and a 1 percent credit is available for nonhistoric buildings that were placed in service before 1936. Benefits are derived from tax credits in the year the property is placed in service, cash flow over six years and repurchase options in year six.

• $15 million in new market tax credits — This comes from the New Markets Tax Credit (NMTC) Program, established in 2000 as part of the Community Renewal Tax Relief Act of 2000. The goal of the program is to spur revitalization efforts of low-income and impoverished communities across the United States and Territories.

The NMTC Program provides tax-credit incentives to investors for equity investments in certified Community Development Entities, which invest in low-income communities. The credit equals 39 percent of the investment paid out (5 percent in each of the first three years, then 6 percent in the final four years, for a total of 39 percent) over seven years (more accurately, six years and one day of the seventh year). A “community development entity” must have a primary mission of investing in low-income communities and persons.

If the proposed project goes forward, will it bring tax money to the city of Memphis? If there are new small businesses that rent space or locate in the general area because of new traffic and people live in the renovated building, I suppose there could be new sales-tax money and employment opportunities.

However, it sounds like most of the occupiers of the space will be non-profits and arts enterprises. There will be people living in the building, but many of these will be rent-subsidized people under Section 8 or other federal and state programs. Taxpayers will be funding the whole project through these various federal tax credits.

As far as the building itself is concerned, I think it is aesthetically past its time and conceivably not worth saving. Possibly the architects can make it beautiful but at what cost, compared to tearing it down and doing something else? I would like to see a financial analysis of this proposed project, and no decision should go forward without it being presented to the public for discussion.

Joe Saino is proprietor of the MemphisShelbyInform.com blog, where a version of this essay first appeared.

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Opinion

Broken Windows at Sears Crosstown

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A journey of a thousand miles begins with a single step, and a renovation of a building with a thousand windows begins with five of them on the fourth floor of Sears Crosstown in Midtown.

“It’s not construction, it’s due diligence for the window companies,” said Todd Richardson, spokesman for the project.

Still, it’s something for a blighted building that has been closed for years. The five windows on the south side of the building were removed so that bidders could do a mock up. About 65 percent of the building is windows, Richardson said.

The cost of replacing them will be several million dollars because they must comply with historic guidelines to insure tax credits and be more energy efficient than the originals.

“It’s going to be an interesting bid process,” said Richardson.

Asked if this indicates that the project is moving forward, he said “work is ongoing.”

Plans call for a mix of educational, medical, commercial and residential users.

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Opinion

Gentrify My Historic Neighborhood, Please

There seem to be some concerns about gentrifying Midtown if the Sears Crosstown project is completed.

I say we should be so lucky. Gentrification, a fancy word for raising property values and the quality of neighborhoods, is a good thing, not a bad thing. If the Crosstown planners who want to turn the Sears building into a vertical urban village can’t understand that then I don’t know why they’re fooling with this monster.

My perspective on the Sears building comes, daily, from the front door of my house in the Evergreen Historic District three blocks from Sears, where the summer sun sets behind the tower. My wife and I bought our house in 1984, raised our children here, sent them to Snowden school down the street, and have welcomed and said good-bye to a succession of mostly exemplary neighbors. Friends who live in East Memphis or the suburbs or other cities say we live on a good street. We agree.

We paid $86,500 for the house. The county appraisal we got in March values it at $204,200, an average annual increase of 3 percent over 29 years in which we put on a few roofs and added a new garage, central air, and a bedroom-to-bathroom conversion. This compares to the nearly 9 percent annual return on the Dow Jones Industrial Average over the same period of time. If only . . .

Granted, I have taken pains to keep the county appraisal low because it means lower property taxes, and we don’t plan on moving any time soon. On the other hand, this is a big chunk of our retirement plan, and if we did decide to move we would want to get top dollar.

One reason appraisals are all over the place in this part of Midtown is because of the notoriously uneven quality of the houses. There are a bunch of relatively new houses built on the old expressway corridor in the 1990s, several classic bungalows and four-squares that are 100 years old, and quite a few blighted wrecks. Some of them are occupied, some are not. A stone’s throw from my place is a rental for college students. Some people would describe them as members of Richard Florida’s creative class. The owners of the house, since 1989, own a small business in Midtown. They get rental income. The students are able bodied. But for whatever reason, nobody believes in house or yard maintenance. Every year, the neighbors have to notify code enforcement, which does what it can.

This is the story of Midtown. For every dump, there are four or five houses that are well kept, sometimes at great cost. A couple of fix-ups on our street were featured in the HGTV television program “Best Bang For Your Buck.”
Bless ’em.

My friend Carol Coletta, a Memphian who studies and speaks about cities for a living, says “cheap cities are cheap for a reason.” Memphis is a cheap city. Nashville isn’t. We could use some Nashvillization in our neighborhoods. I am not at all sure that Midtown needs more housing on the scale the Crosstown planners envision. A case can be made that it needs less housing. There are good, 1999 houses with 1700 square feet of living space two blocks from Sears Crosstown on the market today for $118,000 and older houses selling for much less than that.

The neighborhoods around Sears Crosstown are affordable. They are not in any danger of becoming unaffordable due to gentrification. That is as wild an exaggeration as the fear-mongering stories about Kroger’s at Poplar and Cleveland where many of us shop. Granted, 28 years ago there was a bombing at the old Kroger’s across Poplar where Walgreen’s is now, but, hey, stuff happens.

Seriously, rising property values, blight reduction, and increased home ownership are good things for neighborhoods and for Memphis at large. If this is gentrification, bring it on.

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News News Blog

Crosstown Developers Address Neighbor Concerns

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The Crosstown Development Team and Crosstown Collaborative (the neighborhood’s new association) held a public forum on Tuesday night at the Crosstown Arts office on Cleveland to fill neighbors in on plans for the Sears building.

Todd Richardson, project leader for the Crosstown Development Team, gave a presentation on plans to turn the 1.4-million square foot building into a “vertical urban village” complete with healthcare from the Church Health Center, Methodist Hospital, and St. Jude Children’s Research Hospital, shared art-making facilities and artist residency programs run by Crosstown Arts, and an education component with Gestalt Community Schools and Memphis Teacher Residency. The plans also include a mix of market rate and affordably priced apartments, retail, and possibly a restaurant space.

Construction is expected to begin by early 2014 with a completion goal of 2016. The development team is asking the Memphis City Council to budget $15 million to cover some infrastructure costs for the $175 million project.

Neighbors — many of them from the nearby Evergreen Historic District, the Vollintine-Evergreen Historic District, and the Speedway Terrace Historic District — asked questions about the current condition of the building, the importance of city funding, and parking issues.

Richardson said parking for the building’s new tenants and employees could mostly be accommodated by the existing parking garage. As for increased neighborhood traffic, Richardson said the streets around the Crosstown building were designed to be wide to accommodate Sears traffic in its heyday and that the project is just bringing the neighborhood’s capacity back to where it used to be.

One resident asked Richardson how the developers would prevent gentrification that may come with rising rents and property values of existing neighborhood homes and businesses. Richardson said protecting the ethnically diverse neighborhood’s population is a goal of the development team, and while he expects rents to rise a little, he said the team is making an effort to communicate with business and property owners in the area to ensure that they are prepared for any changes.

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News News Blog

Memphis City Council Seems Initially Supportive of Crosstown Redevelopment

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The Crosstown Development Team, which is spearheading the redevelopment of the abandoned 1.5 million square foot Sears Crosstown building, presented their plan to transform the former Sears headquarters into a “vertical urban village” to the Memphis City Council’s executive committee today.

The founding partners — ALSAC, the Church Health Center, Methodist Healthcare, St. Jude Children’s Research Hospital, Gestalt Community Schools, Memphis Teacher Residency, and Crosstown Arts — will fill in 600,000 square feet of the building, and the rest will be a combination of residential property, retail, and arts.

The team has asked the city to help them fill in a $15 million funding gap for the $175 million project. Most of the redevelopment is being funded by private contributions, grants, and federal tax credits, but some help is needed from the city. The city’s contribution will pay for blight removal on the site and demolition of some parts of building and parking garage. Robert Lipscomb, Memphis Housing and Community Development and MHA director, said the city plans to find alternative sources of funding that don’t require dipping into the city’s general fund.

“We have not committed to the $15 million. What we have committed to is helping find the $15 million,” Lipscomb said.

Lipscomb proposed the introduction of a new city Center for Policy Change, Design, and Development (also called “The Studio”) that would specialize in sourcing alternative funding for projects that approach city government for assistance. He said he’ll begin meeting with city division directors to discuss Crosstown funding options next week.

Despite the questions concerning how the city will help pay for the project, Memphis City Council members seemed largely supportive.

“It’s critical that we get in-fill development,” said council member Shea Flinn. “We have to do what we have to do or this city will not survive. The fact that such five-star [founding] partners have stepped up for this project is nothing short of a miracle.”

Construction is expected to begin at the Sears Crosstown building later this year with a projected move-in date of 2016.

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Opinion

Midtown: More on Overton Square and Sears

Friends for our Riverfront

Bob Loeb

Bob Loeb says don’t expect a return to the days of sex, drugs, and rock and roll at Overton Square when Loeb Properties gets done with its renovations.

“We’re not bringing Billy Joel back,” Loeb told the Memphis Rotary Club Tuesday. “Our plans are relatively modest. We’re rehabbers. We love old buildings.”

He gave an overview of the project that managed to whet appetites for a revived Overton Square while tamping down expectations a bit. The space, he noted, is “not that big” but the project seems bigger and more expensive — pushing $20 million — because of the partnership with the city on a floodwater detention basin and parking garage. Developers believe $4 a gallon gas will lead to inward migration and a more vibrant Midtown.

Loeb praised ongoing improvements at Overton Park and along Broad Street and said there is hope for Crosstown and for Washington Bottoms (a leveled tract south of Poplar east of Cleveland) acquired by Lehman Brothers.

“It’s back in play,” he said.

The new Overton Square “will not be Beale Street Two” but will be “a lot more local” and will not compete, Loeb says, with Cooper-Young bars and restaurants. The Overton Square theater district theme was downtown developer Henry Turley’s idea, Loeb said, and seconded by Jackie Nichols. Construction will begin this spring or early summer, but we’ll have to wait and see who goes first, Loeb or the city. Who needs a big new parking garage for a space that isn’t fully developed or is half occupied?

More on the wait and see front . . .

Mea culpa. I got ahead of things in an earlier blog post as far as Yates Construction and Sears Crosstown. Blame it on impatience and too much caffeine. My bad, anyway.

A Yates spokesman who asked me not to use his name said the company is doing due diligence on Sears, is tracking it on the radar, and has its finger on the pulse and is “very interested.”

“This is a project well within our means,” he said.

As for the readers who noted the building’s survival as a distribution facility until 1993, ten years after the retail part closed, so be it, and thanks for the correction.

I think Sears is a blighted, ugly, dated behemoth that is too expensive to tear down and too expensive to redevelop. This week I ran it past developers Jason Wexler of Henry Turley Company, Josh Poag of Poag & McEwen, and John Elkington of Beale Street and they all said it’s a whopper and a long shot. Wexler had an interesting idea: put MLGW’s administrative headquarters in it as the city’s contribution, then put out requests for proposals for the current MLGW headquarters downtown west of FedEx Forum. The utility building, he said, separates Beale Street and FedEx Forum from The Orpheum and the riverfront.

As a Sears neighbor since 1984, I have long since run out of patience and gone all NIMBY. I don’t believe this building in its blighted condition would be tolerated in Collierville, Bartlett, Germantown, or the commercial parts of East Memphis. And if it was in a warehouse district or industrial area it would have been forgotten long ago. Its location gives it such value and interest as it has. Responsible residential and commercial neighbors on all sides of Sears have indirectly borne the carrying costs of this mess and whatever hope it has for redevelopment. You own a building, small or large, and say you love its future potential, then you take care of it today, and that goes for everyone.

My suggestion is to photoshop Sears Crosstown. Not with light shows or painted plywood in the windows, like the Chisca Hotel downtown. Put in real windows, a little landscaping, paint it, tear down the fire escapes, put a faux entrance on Cleveland, demolish the parking garage, and replace the fence with something that doesn’t scream maximum security prison. Then lock it up and hide the keys. Wexler said former New York Mayor Ed Koch did something like that with blighted housing projects years ago. It wouldn’t be cheap and it wouldn’t be a beauty, but it would also not be the eyesore and drag on the neighborhoods it has been for decades. I nominate it for Mayor Wharton’s Next 100 Days project.

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Special Sections

Sears Crosstown Under Construction in 1920s

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If you enjoyed that photo of the 100 North Main Building under construction, I thought you’d enjoy this one too. It shows workers building Sears Crosstown in the mid-1920s, and this was one helluva job. I’ve heard that one million bricks went into this structure. I don’t know if that’s true, but goodness, who’s counting?

Look — they even ran railroad tracks down Cleveland (or Watkins) to bring materials to the site.

The authors of Memphis: An Architectural Guide note that this was the biggest building in Memphis at the time, and when it opened in 1927, “Sears proudly proclaimed that it covered more ground than the Great Pyramid in Egypt.”

And like those pyramids in Egypt, it stands today as empty as a tomb.