VOL. 131 | NO. 197 | Monday, October 3, 2016
Artspace Locks in Rents in Hot Area
By Madeline Faber
A Downtown apartment complex will lock in affordable rents in one of Memphis’ most expensive areas. The South Main Artspace Lofts saw a formal groundbreaking Thursday, Sept. 29, at the giant United Warehouse building at 138 St. Paul Ave., tucked off of South Main.
The privately and publicly funder Artspace project will cap rents at an affordable rate for 15 years.
The project, spearheaded by Minneapolis-based developer Artspace, is backed by private donors and public funding as well as low-income tax credits.
At the groundbreaking, Barbara Hyde, president of the Hyde Family Foundations, called the project a “cornerstone” of Memphis’ growth, “providing for the greater good in a catalytic way.”
The project reinterprets access to affordable housing. Applicants to the project will need to be working artists under a certain income threshold. If a resident skyrockets into fame while living at the development, they won’t be asked to leave necessarily, but will be expected to continue their artistic pursuit.
Rents will range from $550 for a studio to $850 for two- and three-bedroom units.
The rent is determined by both income level and unit size.
Downtown rents for new construction average more than $1,200 a month, said Jimmy Ringel, COO of Makowsky Ringel Greenberg. Rates at the South Main Artspace Lofts will stay capped for 15 years while the South Main Arts District continues to grow in demand.
“We have to make sure the renaissance doesn’t leave people behind,” said Paul Young, director of the city’s Division of Housing and Community Development. He added that South Main is one of the areas where gentrification could take hold, which would be something that Memphis has not yet truly seen.
The Artspace development is surrounded by galleries and restaurants in the South Main Arts District. The apartment complex will include 58 affordable units spread across the historic warehouse and new steel-and-glass construction designed by LRK.
The lower level of the United Warehouse building will be converted into 7,000 square feet of commercial, gallery and community space.
The area between the new four-story building development and St. Paul Avenue would be turned into a plaza with an outdoor arts garden and space for seating and gathering.
The $17 million project is nearly six years in the making. Construction is expected to take 12 months.
Ringel, whose company manages the Cabinet Shop Lofts on South Front Street, said Artspace’s funding model makes possible new construction for affordable units.
“That said, when considering the cost of land, as well as increases in construction costs over the last several years, it's difficult to make the numbers work for an affordable development, which is one of the reasons why there have been relatively so few,” he said. “As a result, a project like Artspace is unique in the market, both in terms of offering affordable rents as well as catering to a specific type of resident – in this case artists.”
He added that it is unlikely that the Artspace development will affect the surrounding neighborhood’s property values or rents, as it is a small development coming in at just 58 units.
Rebecca Thomason, principal of textiles business Southern Creed, said she would consider moving into the development once the dust settles. Thomason has lived in the South Main area for a year, and predicts that rents will continue to climb.
“Hopefully, it won’t price out the people who live here and want to be here,” she said. “But with Artspace, I hope that it brings a grocery store and draws attention to other vacant buildings.”