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VOL. 131 | NO. 16 | Friday, January 22, 2016

‘Complete Gut’ Planned for Dermon Building in Downtown Memphis

By Madeline Faber

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The historic Dermon Building at the northeast corner of Third Street and Court Avenue will be turned into a boutique hotel following a recent purchase.

The Dermon Building, which has largely sat vacant for more than a decade, could see new life with a developer’s plan to renovate the building as a boutique hotel.

(Daily News/Andrew J. Breig)

The 46 N. Third St. structure, which was built in 1925, is listed on the National Register of Historic Places due to its art deco and Renaissance-styled architecture. Real estate and bail bonding firms have occupied the lower levels, but the 10-story building has sat completely vacant for a few years and substantially vacant for well over 10 years.

Dermon Building Inc. sold the building to Dermon Capital Group, according to a Jan. 15 warranty deed. The 100,000-square-foot building went for $1.5 million and the adjacent parking lot for $310,000. The Shelby County Assessor of Property most recently appraised the building at $225,400.

Real estate brokers Jerry Couloubaritsis and James Skefos have owned the building since 1992, and the buyer is Amit Patel.

Chris Garland with Garland Company Real Estate represented Patel and confirmed the building will be turned into a hotel.

“When we’re done, it will be a complete gut,” he said.

Any further activity on the building will take place in early summer while Patel works through another project on property he owns, Garland said.

Patel owns property in Memphis under the name KNM Development Group LLC, namely empty lots at 315 South Front St., 285 Gayoso Ave. and 404 Beale St. He purchased the lots separate in 2014 and 2015.

Couloubaritsis said he started marketing the Dermon Building for sale a couple years ago.

“When we’re done, it will be a complete gut.”

–Chris Garland
Garland Company Real Estate

“We had been approached about it being apartments, condos, hotels, even getting it back to being an office building, but I would think the main interest we had was some sort of living space,” Couloubaritsis said.

Jaske Goff, vice president of planning and development with the Downtown Memphis Commission, said that a recent developer wanted to turn the Dermon Building into low-income housing, but the project was dropped when it wasn’t awarded low-income housing tax credits.

The Dermon Building would be in the style of the Madison Hotel and Exchange Building, other historic Downtown buildings rehabbed into hotels and apartments.

If Patel is looking to turn his vacant lots into ground-up hotels, he’ll be competing with 12 other Downtown hotels in development.

A stones-throw away from the 0.7-acre Gayoso lot, Knoxville-based Beale Street Hotel Group hopes to build two companion hotels. Bearing the address 195 Union Ave., a Hilton Garden Inn would stretch between Union and Gayoso. The developer also plans a Holiday Inn Express at 235 Union Ave., at the Front Street corner.

The 0.3-acre lot at 315 South Front St., which is near Gus’s Fried Chicken, faces another vacant lot at 316 S. Front St. that recently was purchased by Australian development firm Drapac Group.

The 0.7-acre lot at 404 Beale St. faces Robert Church Park.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 97 282 19,395
MORTGAGES 113 315 22,365
FORECLOSURE NOTICES 24 86 2,922
BUILDING PERMITS 278 550 39,866
BANKRUPTCIES 55 204 12,452
BUSINESS LICENSES 24 73 6,339
UTILITY CONNECTIONS 31 102 7,374
MARRIAGE LICENSES 13 72 4,433