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VOL. 8 | NO. 24 | Saturday, June 6, 2015

Making the Connection

Redeveloped Central Station could become a South Main nexus

By Amos Maki

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Archie Willis III had just earned his master’s degree in business at the University of North Carolina at Chapel Hill when he returned to Memphis in 1981 to help his father, A.W. Willis Jr., redevelop the Adler Hotel Annex.

The elder Willis – a prominent attorney and civic leader who in 1964 became the first African-American elected to the Tennessee General Assembly since the 1880s – wanted to turn the old property into 22 apartments and an office for his company, Supreme Mortgage and Realty Co.

When they finished the project in 1983, much of Downtown, especially on the South End, had been hollowed out by eastward flight.

“What was really interesting was that we were considered pioneers at that time in developing in the south end of Downtown,” Willis said. “No one was doing anything down there and what we were doing was considered to be significant pioneering at that time.”

Now Willis and partner Henry Turley hope to spearhead the roughly $55 million effort to transform Central Station into a dynamic facility that includes apartments, a hotel, movie theater and significant public transit and pedestrian improvements.

But the Central Station project, impressive by itself, is part of a much larger transformation of the southern end of Downtown, or South End, that started years ago with projects like the Adler Hotel Annex and Turley’s Riverbluff, a 37-apartment co-op.

Central Station could serve as a critical anchor stitching together the development fabric of the South End, an area stretching from Beale Street to Crump Boulevard and including the South Main Historic Arts District, an area where around $500 million in development is planned or underway, according to the Downtown Memphis Commission.

“It’s real clear that I for a long, long time – at least 25 years – imagined a neighborhood that stretched from the Mississippi River across Tom Lee Park and Riverside (Drive) through South Bluffs, through South Junction, to the train station and embracing Main Street,” said Turley. “People are introduced to this city through Main Street, and I think the connection needs to go that far, and then of course north to Beale Street, so you have a continuous, contiguous functioning neighborhood from Crump all the way to Beale.”

Turley said the Central Station project could turn into a kinetic, 24-hour hub of activity, one that helps entrepreneurs and other business owners in the area. Central Station, in turn, could also be supported by stakeholders in that area of Downtown.

“We’d like to see it anchor South Main and help the South Main merchants, and the more dynamic activity and life we put there, the more they will be helped,” said Turley. “Those guys will help us as much as we will help them.”

Chef Michael Patrick, who recently signed a seven-year lease for Rizzo’s Diner at 492 S. Main, thinks a redeveloped and re-energized Central Station will provide a critical link between the South End and the Downtown Core, one that will bring more visitors – locals and tourists alike – to his little corner of Downtown.

“I’m banking on its success,” said Patrick. “I think this is a great way to bridge South Main and the core to make it a cohesive neighborhood where people are out walking and having fun and spending money.”

Don Adams, owner of Mid-South Casters & Equipment Inc., at 78 W. Carolina Ave., said he thought Central Station’s current design was fine but that “the proposed changes can bring a lot more value to the area than what’s currently there.”

“I know that the development is being driven by revenue generation, but that doesn’t mean there can’t be a benefit to the community at the same time,” Adams said.

The plan

Under the current terms, the Memphis Area Transit Authority would transfer control of the 101-year-old Central Station and surrounding property to the master developer, Turley and Willis, through a long-term lease.

In turn, Turley and Willis would sign multiyear subleases with tenants to bring the property at the southwest corner of Main Street and G.E. Patterson Avenue up to its highest and best use. The master developer would operate, manage and maintain the property, and cash-strapped MATA would share in revenue generated by the project while being shielded from any potential losses. MATA would also be relieved of deferred maintenance costs and debt on the building.

“There’s not really anything bad about the project,” said MATA president and general manager Ron Garrison. “As far as public-private partnerships go, this one is pretty exciting.”

“This may be one of the better ones I’ve ever seen,” Garrison said. “We’ll save money on maintenance, we’ll save money on debt, we’ll save money on operating costs, and we’ll be providing a public service.”

The estimated $55 million price tag includes around $50 million in private investment, which at one point caused Turley to wonder if the project was even possible. Turley said the effort was “unusually challenging because it’s a public project with no public money provided.”

“MATA has no money at all to allocate to this project,” Turley said. “We arguably have to go from a negative value now to go to a value that will contribute to the well-being of MATA and the developer.”

The proposal for Central Station includes replacing the existing apartments in the train station with a boutique hotel; building a five-screen movie theater at the southeast corner of G.E. Patterson and Front Street that would include the historic Powerhouse building; adding around 220 apartment units on the Central Station site; and constructing a possible grocery store.

“Clearly, there is property there that can be made economically productive,” said Turley.

Willis and Turley would like to create a new public space, or market plaza, where the bus transfer stop and Memphis Farmers Market currently function. The new plaza would place the market closer to Front, giving it more visibility and a more urban feel.

The underutilized MATA bus stop on the western edge of the property would be moved east to Main Street, where it could connect to the Main to Main multimodal connector, the Main Street Trolley line and other pedestrian options.

In many ways, the massive Central Station property disrupts the street grid in that part of Downtown and can make accessing areas west of the site difficult. The station is roughly four blocks long north to south, creating a large void for pedestrians. Turley and Willis seek to remedy this by building a “transit connector concourse” through a former baggage storage tunnel for the station. The concourse would stretch from Main to the new market plaza, re-establishing a pedestrian connection with Main Street, Central Station and points further west, such as Front Street.

“One of our goals is to make Central Station central again,” said Turley. “If we can do all of that, we will have made a meaningful connection.”

Willis and Turley said they hope the transformation can extend eastward to the aging Foote Homes public housing complex and the neighborhood around it. The city has applied for a Choice Neighborhoods grant from the U.S. Department of Housing and Urban Development to revive that struggling portion of the South End, including Foote Homes, into South City, a mixed-use, mixed-income area.

“(Central Station) could provide a great linkage to the areas west of the station to a less affluent community to the east,” said Willis. “It really serves as a tremendous opportunity to bridge those two areas and those two parts of the city.”

‘A Memphis thing’

The development team realized early on that a project of this size and scale would probably have difficulty attracting large, national chains unfamiliar with Memphis or what is happening Downtown – particularly in the South End, which contains the revived South Main district.

“There’s a Memphis thing about it,” said Alex Turley, vice president at Henry Turley Co. and Henry Turley’s nephew. “You had to put this opportunity in front of folks who would get it.”

The Kemmons Wilson Cos., the Memphis-based company whose namesake founded Holiday Inn, is leading the effort to land a hotel at the terminal building. Memphis-based Malco Theatres Inc. will operate the boutique movie theater inside the redeveloped Powerhouse building. Then you have Turley and Willis, who have been involved in a string of successful Downtown projects.

Alex Turley said the development team sought out firms with deep ties to Memphis, saying those companies had a proven record of success and a better understanding of the local market. Where a large national firm might see a white whale, local groups might see opportunity.

“It certainly fits,” said Alex Turley. “This local, multigenerational dynamic that we’re seeing come together at Central Station really affords the possibility to create a special place.”

And local ownership and involvement can provide multiple benefits. Locals are generally familiar with the terrain, having eyes and ears on the ground.

On a recent afternoon, Turley was driving through the area when he noticed some overgrown shrubs and whipped out the notepad he always carries.

“It’s real estate and it’s there in the morning, noon, night and weekends,” said Turley. “If you’re going to be a real estate guy, you’ve got to know the property all the time or you’ll screw up just by missing important things that take place at the property.”

Willis, who grew up in a family house on Mississippi Boulevard, said Downtown had come a long way since his family worked on the Adler Hotel in the 1980s, a steady march through time that led to his involvement with Central Station.

“The Orpheum had been redeveloped and was going along well, but nothing that far down Main Street had been developed,” said Willis. “I don’t know what adjective I would use to describe how it feels. It emphasizes the fact that I’m a lot older and been around a long time now.”

PROPERTY SALES 36 154 6,546
MORTGAGES 34 94 4,129
BUILDING PERMITS 201 554 15,915
BANKRUPTCIES 43 126 3,396