VOL. 127 | NO. 165 | Thursday, August 23, 2012
By Sarah Baker
The reversal of fate for the blighted Chisca Hotel at the intersection of South Main Street and Dr. Martin Luther King Jr. Avenue, plagued by passive out-of-town ownership and environmental hazards, was set in motion during a phone call about 18 months ago.
Thanks to “visionary” Downtown stakeholders, the vacant Chisca Hotel on South Main Street just south of Beale Street is closer to a rebirth.
(Photo: Brad Johnson)
That’s when president of the Downtown Memphis Commission Paul Morris called local developer Terry Lynch and asked him if he wouldn’t mind taking a look at the 99-year-old hotel property at 272 S. Main St. to see if it was worth saving.
After being quickly shut down by Lynch, who cited the “extraordinary problems” with the asset, Morris then sweetened the deal.
“Paul bribed me and said, ‘Look, you just got the Downtown Vision Award for the One Commerce Square project, and if you pull this deal off, I’m going to make sure you get one of those trophies,’” Lynch said. “Back to back Vision Award, nobody’s ever done that.’ I said, ‘OK, bring it.’”
Lynch, president of The Southland Cos., is one of the partners who – along with Pitt Hyde, Bo Jackson, John Pontius, Gary Prosterman, Gail and Karl Schledwitz and Bob Worthington – bought One Commerce out of foreclosure from US Bancorp and pumped more than $30 million in acquisition costs and improvements into the tower.
Lynch now joins Prosterman and Gail Schledwitz, along with J.W. Gibson, in a group called Main Street Partners LLC. The group plans to purchase the Chisca Hotel from Church of God In Christ, investing upwards of $17 million in private equity to extensively rehab it, and convert it into 150 market-rate apartments.
Earlier this month, they jumped the final hurdle on the public process of obtaining incentives to do “environmental and structural remediation for a building that’s falling into the streets.” Now the group awaits its $700,000 closing of the eight-story, 292,000-square-foot property from COGIC, scheduled for mid-September.
“In real estate, more times than not, when you get into suburbia, developers and development is a bad word because developers are trying to break whatever the uses the community has set up for them to be,” Lynch said. “Our plan is to try to embrace the history of the building, and also create a great environment for the people we’re trying to attract to South Main, to Downtown, to grow our city.”
The renovated Chisca, which will likely retain its name, will be 97 percent multifamily, with 5,400 square feet of retail space on the ground floor. But unlike other Downtown apartment rehabs, every bedroom will have windows.
“It’s a big amenity to have,” Lynch said. “Some of the projects with the old warehouse buildings in the new lofts they do, the bedroom has to be back in a dark area and you do a half wall.”
The units will be preserved with their existing nine-foot ceilings, an unusual layout for a building of the Chisca’s age. Plans also call to restore the annex portion south of the building, and for those shotgun units to have balconies.
That endeavor could potentially bump the total investment up to $25 million, but it could turn out to be financially feasible.
“The majority of people who have looked at it say, ‘tear it down, tear it down,’” Lynch said. “But we’re looking at it fairly hard to study it, we think it would be a great arts wall to be complementary to South Main. Also, it will be a different type of unit, so it would diversify the unit mix of the building, and also, it would spread out our operating costs to do the building.”
As far as amenities go, Chisca’s apartments will have “probably more than any other apartment development Downtown, other than maybe the suburban-style garden apartments on Harbor Town.” Lynch said the property will have a restaurant, an exercise room, a theater room, storage space for residents, onsite parking, a swimming pool and deck.
Main Street Partners has also engaged preservationists and historians to document the layout of the second floor at the mezzanine level that was home to Dewey Phillips’ “Red, Hot and Blue” WHBQ radio show and replicate it on the Chisca’s ground floor.
“It’ll be open so people from the street will be able to see that,” Lynch said. “We see that as actually having a 503(c)3 managing that portion of the operation.”
Other ideas include having live-stream Internet broadcasts from the 1950s era for tourists to get a taste of the history of the early days of rock ‘n’ roll and Elvis Presley.
“You’ll be able to listen live to whatever they’re playing at that time right there on Main Street in front of the trolley stop,” Lynch said.
Main Street Partners expects to break ground by the first of 2013 and is shooting for a third quarter completion. The design team is Bounds & Gillespie Architects PLLC in association with Looney Ricks Kiss Inc.