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VOL. 128 | NO. 4 | Monday, January 07, 2013

Battling Blight

Downtown Memphis Commission turns up heat on city’s eyesores

By Sarah Baker

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The kickoff date to the Downtown Memphis Commission’s anti-blight initiative on April 1, 2011, is embedded in president Paul Morris’ memory.

A crew from Biggs General Contracting demolishes the parking garage at 147 Jefferson Ave., one of the properties the Downtown Memphis Commission targeted in its anti-blight initiative.

(Photos: Lance Murphey)

“I remember writing the first series of letters (to property owners) on April 1 and sending them out because I had a few people call and ask if it was an April Fool’s joke,” Morris said. “I remember telling the board when we did this that if we can get even one or two properties fixed up, we’ll consider it a success because we knew going in it would be very difficult. If it were easy, it would have been done before.”

After being granted a total of $100,000 split between the DMC and Center City Development Corp. (CCDC) boards, Morris, DMC senior vice president of planning and development Andy Kitsinger and newly hired anti-blight attorney Steve Barlow did an inventory of those Downtown properties that were vacant, not being actively marketed and lacking plan of action.

They came up with a list of 180 blighted assets ranging from historic skyscrapers to abandoned lots and sent letters to all of their owners, asking for information about their plans. The DMC has since narrowed its focus to between 10 and 20 properties based on priority and also those projects where their attention can most likely make a difference.

“There’s some properties that there’s just not a market or a demand for rehabbing that particular property at this particular time, so we’d be beating our head against the wall trying to get a development going there because it’s just not going to happen, even with our help,” Morris said. “So on those properties, we’ve tried to work with the property owner to maintain a minimum standard of code compliance.”

The DMC, then known as the Center City Commission, has made similar lists before. One in 2005 of underused buildings in most need of redevelopment included the Sterick, Sears, Nylon Net, Hickman, Alabaster and Toof buildings. Morris said the new list has a “large overlap” but is also ongoing.

Examples of recent strides made on blighted Downtown property are the Chisca Hotel’s new local owners and their plans to convert it into market rate apartments and retail space on South Main, the James Lee House in Victorian Village’s proposed future as a bed and breakfast and the conversion of a chain-linked lot with broken sidewalk at Jefferson Avenue and North Main Street into the Barking Lot dog park and food truck staging area.

The DMC has also initiated conversations with the owner of the Hickman Building, the property across the street from the YMCA on Madison.

Jason Null of Biggs General Contracting works on demolition of the parking garage at 147 Jefferson Ave., part of an agreement between the property owner and the DMC.

“It’s got a chain-linked fence around it, it’s vacant and blighted, but it’s a great opportunity we think for development because of its location and the size and floor plate of the building,” Morris said.

Morris said that anti-blight effort is aimed at increasing the cost of holding blight and decreasing the cost of developing. Because under the city’s current property tax system, developers are “punished for improving on blight.”

“If you own a blighted building that’s nearly worthless, we don’t tax you very much. If you go about improving that property, we jack up your taxes,” Morris said. “That’s why we have to help encourage development, because often with those high taxes, it’s impossible to make a development occur.”

And in the event that lawsuits are filed with the property owner due to inaction, it’s because the DMC has exhausted all other means of assisting said owner.

“We’ve got a basketful of carrots and a basket full of sticks,” Morris said. “We’ve got anti-blight regulations and the power to enforce them. … Then on the other hand, we’ve got tax incentives, development loans, and our own resources here in terms of information – we’ve got an architect here, a lawyer, an accountant – we help work with property owners to get property developed. That’s the thing that we enjoy doing much more than the enforcement side.”

A case where both carrots and sticks were used was on property at 62 N. Second St., 66 N. Second and 147 Jefferson Ave. The DMC filed suit against property owner Adam Airman in February, claiming the properties were a public nuisance. But Morris said the DMC “subsequently began working cooperatively” with Airman, reached a settlement agreement and dismissed the lawsuit a few months later.

“That settlement agreement required him to clean out the office building, 147 Jefferson, and to demolish the garage, which had become unsalvageable, unusable and a very big blight right across from Court Square,” Morris said. “He agreed to start the demolition by the end of the year and finish it by the first quarter of 2013. True to his word, he started and that garage is currently under demolition. He has plans to redevelop the property and we are certainly encouraging him in that and helping in any way we can.”

At a CCDC board meeting last year, Barlow shared a story of when he had the legal team from a “big multinational corporation” in town to talk about a particular Downtown asset. When he pulled a member aside to ask if he had looked into Memphis’ codes and what his defense was, his reply reinforced Barlow’s efforts.

“He said, ‘We have no defense. If the city of Memphis, acting through the Downtown Memphis Commission, decides to enforce your ordinance, as long as you don’t do it in a reckless or a malicious way, we must comply,’” Barlow said. “So now I knew the three floors in New York City had thoroughly researched us …and told us that we were right. It was a good moment for me and for Paul, who identified this strategy in the first place.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 35 250 5,016
MORTGAGES 60 382 6,608
FORECLOSURE NOTICES 17 55 1,534
BUILDING PERMITS 179 720 11,979
BANKRUPTCIES 54 257 5,216
BUSINESS LICENSES 24 89 2,025
UTILITY CONNECTIONS 92 443 6,907
MARRIAGE LICENSES 16 81 1,422

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