VOL. 127 | NO. 100 | Tuesday, May 22, 2012
Downtown Apts. Finally Under Way
By Sarah Baker
After two years and some inevitable development hurdles, Greenbrier Partners LLC’s mixed-use development at 436 S. Front St. is quickly taking shape.
Construction began recently on the more-than-a-century-old warehouse at the corner of South Front Street and East Nettleton Avenue, after partial demolition commenced last July.
The $2.5 million development entails a three-story, 29,000-square-foot building with 5,500 square feet of retail space, 25 apartment units (19 one-bedrooms and six two-bedrooms) and 25 underground parking spaces.
Greenbrier filed a $2.1 million loan through Southern Bancorp Bank in September 2010 to build at the site, which is part of a 10-year payment-in-lieu-of-taxes (PILOT) agreement with the Memphis Center City Revenue Finance Corp.
That’s in addition to an initial $77,000 development loan Greenbrier was granted in May 2010 with the option for an additional $5,000 if the exterior lighting plans were approved by the Design Review Board.
“We wanted to break ground in January 2011 but needed (CCRFC) to help work with a few other items to get it done,” said Vince Smith, chief manager with Greenbrier Partners. “We were successful in getting those two things that we needed for the project to move forward.”
In addition to financing, the project along the way saw various architectural and structural engineering issues that called for some design adjustments.
“The first building just did not come in budget at all and so we went back and redesigned the building,” Smith said. “Originally, we were demo-ing the entire structure and starting over. We actually reused a lot of the structure this time – all of the old post and beams and two of the four brick walls will remain exposed in the interior. Not only were there some cost savings in that, but it’s also keeping a little bit of the history and the nice timbers. It’s somewhat of a green way to develop, reusing old materials.”
The architect is Jim Boggan of McGehee Nicholson Burke Architects Inc. The structural engineer is Kevin Poe of Poe Engineering Inc.
The working title of development is The Cabinet Shop, in homage to the former owner, Bill Scudder and his business, S&S Custom Cabinets.
“I try to keep stuff true to its history and just call it what it was,” Smith said.
Smith expects the project to be wrapped up by Sept. 1. He has been in discussions with small office users and food outlets for the 5,500-square-foot commercial space on the building’s ground floor, none of which are a done deal yet.
Kendall Haney with Downtown Condo Connection will lease The Cabinet Shop while Smith will manage it. Projected rents are $900 for a one-bedroom and $1,100 for a two-bedroom.
“As far as marketing goes, we’ll place it on our website, downtowncondoconnection.com, with floor plans, descriptions, price ranges, all amenities and so forth,” Haney said. “Plus we’re going to be putting a banner on the building during preleasing, and of course being right next door (at 420 S. Front St.), it’s going to make it really convenient for people to come into the office.”
Haney said the apartment’s target demographic, as with all of the spaces the Downtown Condo Connection leases, is the 20- to 30-year-old, young professional age group. On the rental side, there’s “definitely a market out there,” Haney said.
“I think the supply and demand is probably about even right now,” Haney said. “There is definitely a demand for apartments right now, but I don’t think it’s an oversupply.”
As far as condominium sales are concerned, Haney said this year seems to be stacking up better than the past three years.
“It’s gradually getting better and more people are coming into buy now, which is nice,” Haney said. “It’s an indication that the market is going north now.”
Twenty-six condos were sold in Downtown’s 38103 ZIP code during the first quarter, according to real estate information company Chandler Reports, www.chandlerreports.com. That was unchanged from the sales during same period last year, but average price saw a substantial leap to $200,487 in Q1 from $141,780 in Q1 2011.
Downtown development is familiar to Smith, having developed the 420 S. Front Condos. And he’s working with business partner Robert Mallory on a $3.2 million loft-style apartment development at 347 S. Front called Printer’s Alley Lofts.
That project – for which The Center City Development Corp. approved an $85,000 development loan in March – involves two buildings. The 24,600-square-foot existing structure at Front and Talbot will be revamped to include 20 loft-style apartments.
A three-story building will also be constructed in the parking lot to include nine townhome-style units. The building also will have about 750 square feet of ground-floor retail and 17 secured parking spaces.
Smith hopes to close on the property “around the first of June,” with construction starting 90 days from then. The scheduled completion date is June 2013.
When asked if working on two mixed-use developments at once is a daunting task, Smith said, “No, it’s a lot of fun.”
“The condo market itself, sometimes it’s a little bit harder to finance,” he said. “I would say that the apartment demand is fairly stable. But it’s very hard to develop apartments Downtown with the expense of them, without some incentives like we received from the Downtown Commission with some PILOTs and other assistance.”