VOL. 131 | NO. 202 | Monday, October 10, 2016
Nearly 300 New Apartment Units Headed to McLean Boulevard Intersections
By Madeline Faber
Two projects planned a block apart from each other will flood the Midtown market with luxury rental units.
The $12 million project will bring five stories of new construction to the corner of Madison and McLean avenues.
The area hasn’t seen new multifamily construction since The Bristol went up in 2004. Since that time, renewed interest in the urban core and high-profile projects like Overton Square have prepared Midtown for top-dollar rents.
Makowsky Ringel Greenberg, a local multifamily owner and manager, plans 108 apartments at the southwest corner of Madison Avenue and McLean Boulevard. Rents at the Madison @ McLean project are projected to average $1.40 per square foot and range from $859 monthly for a 529-square-foot studio up to $1,329 for a two-bedroom, 1,045-square-foot apartment.
MRG recently submitted an application to the Downtown Memphis Commission for an eight-year tax freeze to support the $12.4 million project. The payment-in-lieu-of-taxes benefit would save MRG $1.4 million over the PILOT term.
“There have been no new apartments developed in the Midtown area of Memphis for many years,” MRG CEO Michael Greenberg wrote in his application to the Center City Revenue Finance Corp., an entity of the DMC. “The Madison @ McLean would be in walking distance to the newly renovated Overton Square providing desired new housing options to support the retail shops and restaurants in a very vibrant area of our city.”
To make way for the five-story construction, MRG would demolish its existing buildings on the corner, including a banquet space at 1819 Madison Ave. and a seasonal nursery that stretches across 1827-1835 Madison Ave. and 7 McLean Blvd.
Four studios, 72 one-bedroom units, 32 two-bedroom units and nearly 2,500 square feet of ground space for amenities are planned for the 1.5-acre site. The project includes 127 on-premise parking spaces. Construction is expected to start in August 2017 with a December 2018 completion.
“What stands out to us is the fact that we think it's going to be very successful given that there hasn't been much of any new housing product built in that area,” said Jay Goff, vice president of planning and development for the DMC. “And when we think about all the commercial, or retail and restaurant projects that are going on out there without financial support, it's a very vibrant and healthy area as far as commercial activity.”
MRG’s proposed 132,477-square-foot apartment building is one block away from Belz Enterprises’ Midtown Market, a planned multi-use project with apartments at the southwest corner of McLean and Union Avenue.
Both projects will bring nearly 300 apartment units to Midtown, an area mostly populated by mid-century apartment complexes.
Tony Pellicciotti, a principal with Looney Ricks Kiss, sees the repopulation of the urban core as a counterpoint to the eastward migration of the last 30 years.
“What we expect to happen is that same migration will happen, but it will happen in reverse as millennials and people who have grown up in a more suburban environment come back to that vibrant environment,” Pellicciotti said.
Belz’ $43 million project includes demolishing the blighted Artisan Hotel and constructing a mixed-use building anchored by a gourmet grocery store. Planned for the four-story building are 188 units averaging $1.43 per square foot with two-bedroom rents up to $1,560 per month. The project was announced last October, and significant demolition has yet to take place.
To support the project, Belz received a 12-year PILOT from the DMC, which was seen as an unusually generous benefit that prompted the DMC to then limit PILOT benefits for such projects outside of the Downtown core at eight years. While MGR’s application is for an eight-year PILOT, that benefit package could be bumped up.
In a letter to the Downtown Memphis Commission, Greenberg said that an eight-year PILOT does not provide sufficient benefit for the project to be financed. He has instead proposed a 12-year or 15-year PILOT.