VOL. 124 | NO. 117 | Wednesday, June 17, 2009
CCC Meeting Mirrors Economic Realities
By Andy Meek
The agenda for today’s Center City Development Corp. meeting offers a ground-level snapshot of how the economy is shaping business plans and real estate efforts in the heart of Memphis.
Developer Phil Woodard has applied for a $90,000 development loan from the Center City Development Corp. to take another shot at renovating the squat, unassuming warehouse property at 456 Tennessee St.
His request will go before the CCDC board of directors today, which meets at 9 a.m. at the Center City Commission office, 114 N. Main St. If Woodard gets the loan, it would help launch his new bid at redeveloping the property he bought in 2005, which sits behind his home overlooking the Mississippi River.
He originally envisioned a 9-story, $6 million condominium development. But the economic downturn scuttled that idea.
“In this market, it’s going to be a few years before something like that could happen,” he said.
Also on today’s CCDC agenda are policy items including revisions to the group’s retail forgivable loan program.
A memo prepared by the CCDC’s policy committee says the program – the goal of which is to lure new business activity Downtown – should be updated because of blows the retail sector is suffering amid the slumping economy.
Proposed changes to the loan program guidelines include requiring applicants to submit draft business plans about their companies and their financial state, as opposed to the current language asking for general information. The program also would continue a location bonus for the retail area in the South Main neighborhood.
The CCDC policy memo also proposes that the remaining balance of a retail forgivable loan should not be deemed “forgivable” and would be due in full if a business defaults or closes.
Discussion of the items at today’s meeting comes the same week as an unrelated development that also is a product of the changing business and real estate landscape Downtown has emerged. The Bryan Co., developer of the 16-story Horizon at 717 Riverside Drive, has defaulted on a $58.6 million loan for the project, The Daily News reported Tuesday.
The project, still under construction, now is in foreclosure.
Economic conditions already had dramatically reshaped the project before this week’s news. The Horizon originally had been slated for condominiums, but this year its developer shifted the focus to apartments in an effort to save the project.
Tight but by no means over
Over on Tennessee Street, Woodard’s plan for his property may have been downsized by necessity, but he’s trying again by design.
His new plans take what would have been a $6 million project down to a development costing less than $1 million. The property most recently was appraised at $98,600, according to the Shelby County Assessor of Property.
Construction is expected to start in August and wrap up in October for the one-story, roughly 12,000-square-foot building. Inside, Woodard envisions developing office and event space.
He conceded even the scaled-down concept represents a risk at a time cash flow for development projects is drying up and buyers either remain skittish about new investments or can’t get loans.
“Everybody’s still a little shy about getting out there,” he said. “But they’re starting to again. The mortgage money will come back quicker than the commercial money for developers like me. That’s drying up, and banks have turned the spigot off.”