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VOL. 130 | NO. 196 | Thursday, October 8, 2015

Mixed-Use Midtown Market on Tap for Long-Vacant Corner

By Bill Dries

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Rumors and speculation have long run rampant about potential development at the southwest corner of Union Avenue and McLean Boulevard, one of Memphis’ busiest intersections.

Proposed view of new mixed-use development, which will include a ‘gourmet grocery store’ at Union Avenue and Idlewild Street. The project would span 3.3 acres at the corner of Union and McLean Boulevard.

(Looney Ricks Kiss)

Some of the speculation involved keeping the eight-story hotel, which was built in the late 1960s, as the central feature of whatever came next. In other scenarios it would be demolished.

The hotel and an adjacent four-story office building have been vacant since going into bankruptcy in 2010.

So, when Belz Enterprises and Harbour Retail Partners of Marietta, Ga., unveiled plans Tuesday, Oct. 6, it didn’t end the speculation. It just gave it a better focus.

The project would demolish the blighted buildings and replace them with a $43 million mixed-use “Midtown Market” anchored by a “national gourmet grocery store.” It also would include 188 apartments: 47 studios; 94 one-bedroom units; and 47 two-bedroom units.

According to the partnership’s application for a payment-in-lieu-of-taxes deal to the Center City Revenue Finance Corp. board, the development would include the apartments; 30,500 square feet of commercial space on the ground floor for the grocery store/supermarket; another 10,521 square feet of commercial space for smaller tenants; and 513 parking spaces in a parking deck and two parking levels.

Tentative renderings of the development, including several alternative layouts, show the anchor retail would front on Union Avenue at Idlewild Street in a one-story brick building. The entire project encompasses 3.3 acres.

The project’s application materials didn’t name a specific grocer but it did leave some clues. From the documents: “In addition to the apartments, the development is working to bring a national gourmet grocery store into the anchor tenant position of the retail. This grocery operator will be able to serve the needs of Midtown as well as Downtown and will be a unique offering currently not offered anywhere west of the Parkway.”

The Midtown Market proposal surfaced two weeks after Trader Joe’s executives confirmed plans to build a store in Germantown at 2130 Exeter Road.

The site is across Poplar from the newly opened Whole Foods Market and near a new Kroger store that opened in August at 7735 Farmington Blvd. Sprouts Farmers Market also opened this year in Germantown at Poplar and Forest Hill-Irene Road.

The grocer for the Midtown Market project would join a Midtown area where a Fresh Market opened late last year at 2145 Union Ave. Kroger is building a new store on Union, next to the Midtown Market site on the same side of the street.

The CCRFC will consider the Midtown Market PILOT request at its Tuesday, Oct. 13 meeting.

Belz and HRP plan to secure financing for the project in December, begin demolition in June and open Midtown Market in October 2017.

Looney Ricks Kiss is the project architect, Montgomery Martin Contractors is the general contractor and Magna Bank will provide financing.

Belz-HRP Partners is seeking a 15-year PILOT that would save the developers $10.5 million in city and county property taxes over the term, or $705,400 a year.

Belz and HRP would pay $1 million in back taxes on the property. The owner of two of the three parcels in the block-size project filed for bankruptcy, so the property is in arrears.

The developers say the PILOT would mean a cumulative increase in city and county property taxes collected on the properties of $1.7 million over the agreement’s 15 years.

Belz and HRP also are asking the CCRFC to stray from its policy of limiting such tax breaks to the Downtown area. The fine print of the CCRFC’s rules allow the board to grant PILOTs for projects outside Downtown that have what the developers termed “extraordinary attributes.”

In their application, Belz and HRP point to the CCRFC’s approval of a pilot for the $150 million Crosstown Concourse project currently under construction.

PROPERTY SALES 56 289 2,908
MORTGAGES 55 226 2,009
BUILDING PERMITS 108 1,002 6,703
BANKRUPTCIES 42 248 1,225