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VOL. 10 | NO. 7 | Saturday, February 11, 2017

State Of The Suburbs

When it comes to CRE, Shelby County’s municipalities can’t be overlooked

By Patrick Lantrip

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With its central location, unparalleled access to major roads, rails, runways and rivers and low cost-of-living, it’s no surprise that Memphis and the surrounding area is a popular destination for corporate headquarters, national retail brands and major industrial centers.

But while Memphis and North Mississippi usually grab all of the headlines, Shelby County’s other six municipalities provide their own unique and important piece to the Memphis metro puzzle.

“For our community to truly prosper, all segments need to be firing on all cylinders,” Reid Dulberger, president and CEO of the Memphis and Shelby County Economic Development Growth Engine, said. “The six suburban Shelby County communities offer unique assets as compared to the city of Memphis and compared to each other. When we’re able capitalize on their uniqueness and build on their strengths, the entire metro area benefits.”

Orgill’s 121,000-square-foot world headquarters under construction in Collierville is a perfect example. Besides Orgill, Shelby County’s southeastern most municipality is home to a plethora of new commercial real estate projects.

“The exciting thing about Collierville is our economic diversity,” said John Duncan, Collierville’s director of economic development. “Not only do we have residential activity and industrial activity, office activity and commercial activity, but we also have an abundance of land in all those categories.”

When it comes to developable land, Duncan said Collierville has 600 acres of land zoned for office, 350 acres for industrial and 400 acres for commercial/retail.

Besides Orgill, other recent Collierville developments include Boyle Investment Co.’s 52,000-square-foot office building in Schilling Farms for Helena Chemical, which occupies half of the building; Dunavant Development Co. is developing seven 50,000-square-foot flex warehouse units at the Glenn Farms Industrial Park (they will initially start with two); and U-Haul building a 75,000-square-foot facility at Winchester and Byhalia roads.

Collierville’s new high school, which will be the largest in Tennessee, will be the centerpiece of the town’s business attraction and retention efforts.

“What better asset than a new school,” Duncan said. “That type of asset is very attractive to development, especially office. It’s not only a great recruitment tool, but it’s also a great retention tool.”

Duncan calls the $93 million school, which will accommodate 3,000 students with room to expand to 3,500, a “game changer.”

“We are also the fastest growing community in the (Memphis metropolitan statistical area), we’ve gained almost 2,500 new residents since 2012,” Duncan said. “So we’re bullish that we will continue to get corporate headquarters, regional office and district office opportunities because of the amenities that we offer in the community, our location and the fact that we have an abundance of land available for development.”

GERMANTOWN

Collierville’s neighbor, Germantown, has similar demographics but a very different development strategy. Germantown developed a strategic action plan in 2012 that has been the city’s guiding beacon for economic development.

“We have focused on long-range strategic planning and have adhered to those plans,” Germantown City Administer Patrick Lawton said. “None of this has happened by accident – there has been a deliberate, planned approach for everything that you see taking place in Germantown.”

This approach helped Germantown land the ambitious TraVure project, the centerpiece of which is a five-story Class A office building for MAA’s (Mid-America Apartment Communities) headquarters.

“What we talked about is simple things like core values – public safety, great quality of life, public spaces and public parks, a school district that we operate and manage ourselves, which is growing,” Germantown Mayor Mike Palazzolo said. “Pretty much at the end of the day we shared with their leadership team that they will be valued, respected and protected in our community.”

The $43.5 million, 10-acre TraVure project will include a parking garage, retail and a pair of hotels in addition the office building. It is located in one of Germantown’s five developmental nodes, which include the Central Business District and the city’s four gateways.

Also under construction is Thornwood, a $170 million mixed-use development on 18 acres at the northeast corner of Germantown and Neshoba roads. That project will include upscale apartments, restaurants, retail and a hotel.

“If you look at the way the MSA has grown over the last decade, there has been significant movement to the east, which really repositions Germantown in the center of the MSA now, so we recognize our position within the region and understand how we need to work together to make sure that the region is successful,” said Cameron Ross, Germantown’s director of economic and community development. “But we still have to understand what sets us apart.”

BARTLETT

Flying somewhat under the radar is Bartlett, Shelby County’s second-largest city and Tennessee’s 10th largest.

Last year the city landed Olympus Corp., a Tokyo-based maker of medical and surgical products. The company is building a $12 million, 110,000-square-foot service and distribution center.

The medical device sector is a high priority, said Terry Emerick, Bartlett’s director of planning and development.

“With a rapidly changing business world, having the labor force training to keep up with the technology is something we really need more emphasis on,” Emerick said. “There is a Greater Memphis Medical Device Council that is working with Southwest (Tennessee Community College) and some other educational institutions and the state of Tennessee to really start offering the kind of training the medical device industry really needs.”

Besides Olympus, label printing company Resource Label has been approved for a 30,000-square-foot facility, Brimhall Foods is expanding by about 80,000 square feet, and L.A. Fitness is in the process of redeveloping a former Kroger location into a gym at 6050 Stage Road.

Going forward, Bartlett is focused on developing its existing footprint.

“Cities now are looking more towards working within their existing city limits over the next several years,” he said. “Within our city limits we still have some good potential for development and redevelopment. We still have some vacant land, but over time that will get to be a tighter situation.”

Emerick said you can’t just focus on one area with economic development because everything is interconnected.

“Just like the industrial area that creates well-paying jobs, which creates a higher-income level, which helps attracts retail businesses,” he said. “Growth in one area is definitely connected to potential growth in another.”

LAKELAND

Just east of Bartlett, the proposed Lake District project would drastically alter the look and feel of the heart of Lakeland.

The ambitious 160-plus-acre project would include two hotels, about 100 residential units, a 500-seat performing arts space, two parking garages, more than 100,000 square feet of office space, luxury retail and restaurants, an outdoor farmers market, and an early childhood learning center all centered around a five-acre manmade lake.

The complex will stretch from the former Lakeland Factory Outlet Mall to the Canada Trace Mobile Home Community, filling the southeast quadrant where Interstate 40 and Canada Road intersect.

Land on the south side of the lake will be densely residential. Structures range from assisted senior living to Downtown-style lofts.

On the north and east side of the lake will be office, retail and civic uses.

The big-box district will be anchored by a 70,000-square-foot grocery tenant. Surrounding the lake will be “al fresco” restaurants and water activities like paddle boats. Further north will be the small shops of the Main Street Mall and the two hotels.

In October, Lakeland’s development board and board of commissioners both gave unanimous approval for a Lake District tax increment financing (TIF) district.

The Lake District project would be one of the largest private development investments in Shelby County history and by far the largest in Lakeland's history and is estimated to generate more than $2.5 million in annual sales tax revenue, which would more than double Lakeland’s revenue, according to Mayor Wyatt Bunker’s Facebook page.

ARLINGTON

And further out I-40, Arlington boasts the highest number of new home sales in Shelby County with an average price that is nearly double the county average.

Last year, Kroger, the anchor tenant for the Shops at Arlington Village, broke ground. The current Kroger store in Arlington is being replaced by a new Marketplace design that features expanded grocery areas, home fashion and decor, bed and bath, kitchen and small appliances, apparel and shoes, and the city’s first Starbucks.

The Shops at Arlington is located on a 24-acre parcel on the southeast corner of Milton Wilson Boulevard and Airline Road.

In addition to the 123,000-square-foot Kroger Marketplace, a multi-tenant shopping center and four outparcels are also proposed for the site.

MILLINGTON

And even in Shelby County’s smallest city by population, Millington will soon be the home of the largest solar power plant in Tennessee. That is thanks to a public and private partnership with Silicon Ranch Corp., the U.S. Navy, Tennessee Valley Authority, Memphis Light, Gas and Water Division and the Millington Industrial Development Board.

A total of 402 acres of adjacent public and private land will be used for the solar farm, which will generate 53 megawatts of energy daily.

Other recent Millington developments include the Shoppes of Millington Farms, which was approved for a TIF by the county and will add about 125,000 square feet of additional retail space to the city.

“It’s estimated to have a one-time economic impact of $36.8 million on the Shelby County economy and will generate approximately $368,201 in new sales tax revenue,” said Kate Armitage, Millington’s director of the Arts, Recreation and Parks department and head of media relations.

“Roughly 484 direct and indirect jobs are expected out of this project, so I’m very proud that our community partnered with Shelby County and the industrial development board under this TIF project,” she said.

Meanwhile, the Millington Regional Jetport continues to be a valuable community asset.

“I’ve been to the airport before when there are two F-16 fighters, a private jet and a crop-duster all parked on the tarmac side-by-side,” Armitage said. “That really shows the versatility of the Millington Airport.”

And Millington’s U.S. naval base holds the distinction of largest inland naval base in the world while also boasting the state’s third-longest runway.

“Millington is actually home to one of the largest employers in all of Shelby County, which is Naval Support Activity Mid-South,” Armitage said. “We have about 7,500 people who work on board the base in Millington.”

A primary focus of Millington has been an overhaul of the city’s infrastructure to better position it for future growth, she said.

“We’ve made major roadway improvement projects, bridge improvement projects, our wastewater treatment plant has undergone a massive renovation,” she said. “Veteran’s Parkway was a $28 million improvement project that opened up over 1,900 acres of prime industrial property.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 74 196 20,828
MORTGAGES 86 244 23,989
FORECLOSURE NOTICES 0 31 3,078
BUILDING PERMITS 0 315 42,909
BANKRUPTCIES 62 172 13,352
BUSINESS LICENSES 21 56 6,678
UTILITY CONNECTIONS 0 52 7,841
MARRIAGE LICENSES 14 59 4,702