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VOL. 126 | NO. 188 | Tuesday, September 27, 2011

Midtown Vacancy

Owner, real estate agent look to rejuvenate troubled hotel

By Sarah Baker

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Memphis hospitality professional Tony Westmoreland hopes someone can breathe new life into a beleaguered, empty Midtown building that operated as a hotel for more than four decades.

A pair of runners pass the hotel at the corner of Union Avenue and McLean Street that has been known of late as The Artisan Hotel and the Country Hearth Inn & Suites. 
(Photo: Lance Murphey)

The property at 1837 Union Ave., at the southwest corner of Union and South McLean Street, has housed many hotels since its construction in 1968, most notably a Ramada Inn and Holiday Inn, and more recently The Artisan Hotel and the Country Hearth Inn & Suites.

The owner of the 164,969-square-foot hotel, unoccupied since November, is Tennvada Holdings LLC, a Las Vegas-based investment group.

Westmoreland, a real estate agent with Keller Williams Realty Inc., listed the property for $1.6 million about two months ago, roughly a third less than the Shelby County Assessor of Property’s 2011 appraisal of $2.3 million.

But because the property’s official listing reads, “Hotel is in need of major repairs and renovations,” it’s understandable why the listing price is lower than the appraised value and why Westmoreland has encountered problems generating interest.

“What my focus is on this is that it doesn’t turn into a toxic asset that sits vacant like say, the Sears (Crosstown) building,” Westmoreland said. “To my knowledge, there are no health concerns within the building as far as asbestos and all of that goes, and so someone should be able to go in and turn this into something to where it could be profitable, especially with the price it’s listed for.”

The reason it needs such extensive repairs, Westmoreland said, is the entire building went through an auction process and was stripped of anything valuable, including the bathtubs from the rooms.

“What is left is an eight-story shell of a building that is missing windows and has plastic bags hanging from where the air conditioner units were placed,” Westmoreland said. “The major issue with this is that the owner is left with a property that makes for a very difficult transaction. This causes a major eyesore and diminishes the quality of the surrounding area.”

Demolition would cost hundreds of thousands of dollars, and renovations could total the listing price many times over, according to estimates Westmoreland has received for the property. But since it’s connected to the office building at 1835 Union Ave. that once served as headquarters for Towery Publishing, demolition is complicated.

There’s also an underground parking garage that the property shares with the adjacent office building, and Westmoreland is concerned that the structural integrity would be compromised in a demolition.

The highest and best use of the property is another hotel, said Westmoreland, who was found by the investment group he represents from his listing at the Clarion Hotel, 6101 Shelby Oaks Drive.

But hotels have struggled in that part of Midtown. For example, the 105-room French Quarter Suites Hotel, about a mile away at 2144 Madison Ave. at the intersection with North Cooper Street, closed in July 2008 and remains vacant.

Since the French Quarter’s demise, the closest hotel is the Holiday Inn Express at 1180 Union Ave., by the Southern College of Optometry.

There is the possibility of high-rise apartments, Westmoreland said, especially considering most Midtown apartments are at or near full occupancy. Other ideas include office space or assisted-living facility space, because from a buildout perspective on Union Avenue, options are limited.

But whatever the outcome, said Westmoreland, who also works at Bluefin Restaurant in Downtown, is hopeful of positive momentum for the Midtown landmark and for the surrounding area.

“I’m not a typical, I-need-to-sell-a-property real estate agent,” Westmoreland said. “This is a prime property for somebody. I’m more about what’s in the best interest for both people.”

PROPERTY SALES 55 321 3,398
MORTGAGES 27 179 2,279
BANKRUPTCIES 32 162 1,904