VOL. 129 | NO. 116 | Monday, June 16, 2014
‘A Step Closer’
By Amos Maki
The general contractor for the Crosstown redevelopment project recently applied for three building permits totaling $115.3 million as the development team approaches a key period for financing the ambitious project.
Grinder, Taber & Grinder Inc. has applied for an $82.1 million building permit for restoration and upgrades of the former Sears building’s shell and a $27.1 million permit for residential development on four floors.
(Daily News/Andrew J. Breig)
“It’s another milestone to hit on our path towards groundbreaking,” said Crosstown project co-leader McLean Wilson. “It’s a step closer to fulfilling our dreams to see work start toward redeeming that building.”
The permit request was another critical step in the long-running, $180 million effort to revitalize the mammoth Crosstown building at 495 N. Watkins St.
Another key period is approaching for the development team. Within the next month, team leaders should find out exactly how much financing they will receive from New Market Tax Credits.
The New Market Tax Credit program provides incentives to investors for equity investments in certified Community Development Entities, which then invest in struggling communities to spur economic development. The Crosstown development team has applied to multiple CDEs for what will amount to roughly $15 million in financing.
“It’s a bit of a beauty pageant to show off the projects to the CDEs, and the prettiest projects will probably raise the allocations – and we’re a really pretty project, so I’m confident we’ll raise our allocation,” Wilson said.
So far, project backers have received commitments for $25 million in philanthropic donations, roughly $85 million in bank financing, preliminary approval for $30 million in Historic Tax Credits, $15 million from the city and $5 million from Shelby County. Including the $15 million in New Market Tax Credits, total financing is $175 million.
Grinder, Taber & Grinder Inc. applied for an $82.1 million building permit for restoration and upgrades of the former Sears building’s existing shell and a $27.1 million permit for residential development on the building’s seventh through 10th floors. Grinder, Taber & Grinder also applied for a $5.9 million building permit to refurbish the existing freestanding parking garage at 1300 Autumn Ave.
Wilson said the team is beginning the process of awarding subcontracts and that construction could start in the fall.
“That’s the hope if we can continue to spur folks to action,” he said. “A lot of things need to fall into place to make that happen and not a lot of them are under our control, and we’re aggressively managing that.”
The Crosstown team is seeking to redevelop the giant 1.5 million-square-foot Sears building, constructed in 1927, through arts, education and health care. The plans also include around 260 apartments and some retail at the 86-year-old structure.
The building has been a vacant, deteriorating eyesore for years. The Sears retail store closed in 1983, and the distribution center was shuttered a decade later. Since then, neighborhood leaders, architects, preservationists and developers have been hoping the building could be brought back to life.
Staley Cates – the president and chief investment officer of Southeastern Asset Management Inc. – and his wife, Elizabeth, bought the property in 2007 and are donating it to Crosstown LLC. Any and all profits from the project will be put back into the development.
The development team’s plan focuses on creating a vibrant urban hub that brings students, health care providers and consumers, shoppers and residents together at the art deco landmark.
The project includes St. Jude Children’s Research Hospital, ALSAC (St. Jude’s fundraising arm), Crosstown Arts, Gestalt Community Schools, Memphis Teacher Residency, Methodist Le Bonheur Healthcare, Church Health Center and Rhodes College as founding partners that have pledged to be tenants in the redeveloped building.
Christian Brothers University and the Southern College of Optometry have committed to leasing space. VO2 Networx, a Memphis-based information technology company, will move its headquarters from a location on Mount Moriah Road into the building, and Goodwill Excel Center will open a charter school there.
Wilson said he expects the development to announce more tenants in the near future.
“Leasing is continuing to be encouraging,” he said.