Two Downtown Memphis projects were propelled Wednesday, Sept. 19, by the Center City Development Corp. while the board was briefed on several of the area’s businesses that are in flux.
CCDC, an entity of the Downtown Memphis Commission, voted to approve a $6,250 commercial office grant application for Somerset Apartment Management LLC to relocate to the 10th floor of the Cotton Exchange Building, 65 Union Ave. The estimated tenant improvements are $17,239.
The Memphis-based company, a property management affiliate of New York-based private investment firm Somerset Partners, is currently in White Station Tower in East Memphis at 5050 Poplar Ave. Somerset Partners owns four local properties that range in size from 150 units to 450 units.
Somerset Apartment Management plans to sign a five-year lease to occupy 2,637 square feet in Henry Turley Co.’s historic tower by November. Brian Boone, Somerset Apartment Management chief financial officer, said the company has been seeking more office space for a year.
“We’re kind of busting at the seams right now, we’ve got boxes in our foyer,” Boone said. “We looked in East Memphis, some (spaces) even in our building, but the Downtown Memphis Commission office grant, once we heard about that, it really moved our focus Downtown.”
Kemp Conrad, principal at Cushman & Wakefield/Commercial Advisors LLC, has been working with Somerset to find its Downtown space.
The commercial office grant program was created in 2009 to increase the number of office tenants Downtown, matching up to 50 percent of the cost of tenant alterations contingent upon a five-year lease. While Somerset’s new Downtown space will only house six employees, the company will bring in executives from outside of the area for training.
“Nationally, this is a trend, where young, growing companies want to be in densely populated urban centers.”
President, Downtown Memphis Commission
“They represent a young, growing company, and a lot of young, growing companies want to be Downtown,” said Paul Morris, president of the DMC. “Nationally, this is a trend, where young, growing companies want to be in densely populated urban centers. We’ve got to take advantage of that.”
Morris said Downtown needs a strong office market to complement “the strongest apartment market in the history” of the area, as evidenced by the Chisca Hotel redevelopment that’s expected to close within the next 30 days.
He added that attracting budding companies like Somerset to Downtown also helps offset some of the “huge, mainstay companies” that are “not going to always be here” like Raymond James Financial Inc. and Pinnacle Airlines Corp. Both situations have resulted in significant cutbacks to Downtown employees and are concerning moving forward.
Morris also updated the board on Easy-Way Food Stores, which is closing its Downtown grocery and original location at 80 N. Main St. at the end of this month after nearly 80 years in business there, citing declining sales.
“We’ve been in discussions with them over 18 months, we knew that they were considering this decision,” Morris said. “If you go to the Easy-Way store right now, you look at the signage, you look at the product mix, it’s in some ways antiquated for the neighborhood and it’s not attracting a lot of the new population that’s moved into Downtown.
“One of the options we talked to them about, which they’re still interested in pursuing, is as part of their rebranding, a new location in Downtown that might fit their new rebranding better … maybe into the growing south end near the existing farmers market.”
Meanwhile, the CCDC approved the $53,200 development loan closing extension request from Neil Armstrong of 314 S. Main St. Project plans call for existing 4,000-square-foot building to be renovated into a commercial live-work building that will include retail space of the ground floor for Carrot, a cupcake and wine concept.
“The rear façade is nearly complete, and the entire façade has been ripped out,” Armstrong said of the $388,710 project. “We plan on being done within the six-month timeframe, and hopefully sooner.”