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VOL. 10 | NO. 40 | Saturday, September 30, 2017

Crosstown Crossroads

With Crosstown Concourse open, it’s only a matter of time before the Cleveland corridor is rejuvenated

By Patrick Lantrip

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For the past 90 years, Crosstown has seen its share of ups and downs. In the beginning, it was a shining beacon for the city’s eastward expansion; at its height, it anchored several vibrant and diverse neighborhoods; and at its lowest, Crosstown became the poster child for once-great inner-city areas of Memphis that had deteriorated.

When it finally closed for good in the early 1990s, the old Sears Crosstown Tower splintered the neighborhoods surrounding it. Though life went on for the remaining residents, the area’s commercial viability was never the same. One by one, many of the local businesses on Cleveland Street were replaced with pay-day loan servicers, pawn shops or simply became boarded-up buildings.

For nearly 20 years the art deco high-rise, and by extension the surrounding neighborhoods, were held in limbo, too beautiful and historic to tear down and too expensive to realistically retrofit.

Despite the odds, the Sears building was eventually reborn as Crosstown Concourse thanks to a collaboration of public and private contributions that took eight years to materialize. With the concourse, a sense of hope as returned to the surrounding neighborhoods.

Crosstown Concourse as seen from Cleveland Avenue looking north. The facility is expected to have an economic impact in surrounding areas. (Memphis News/Houston Cofield)

Even as building’s renaissance began to shift from pipe dream to reality, there was still a lingering sense of uncertainty surrounding the viability of the project. But just a month after its official grand reopening, the giant building is more than 95 percent leased with a mix of office, retail, residential, medical services and nonprofits that would have seemed impossible 10 years ago.

The area immediately surrounding Crosstown Concourse is another story. Vacant lots and boarded-up buildings stand out even more against the backdrop of the rejuvenated vertical urban village. Homes nearby, though they are almost identical in age and structure to those in neighborhoods like Evergreen just a few blocks away, are being sold for a fraction of the $200,000-plus their neighbors’ homes are fetching.

It’s a stark reminder that even though the Crosstown Concourse revitalization was a resounding success on almost every front, the job of revitalizing the surrounding areas has just begun.

Crosstown Arts co-founder Todd Richardson said the project was intentionally designed to foster growth outside of the Concourse, even though his organization doesn’t control the fate of land surrounding it.

“It is 1.2 million square feet, but we only have about 65,000 (square feet) of retail in the building,” Richardson said. “For us, it was a very intentional thing to do from the beginning, because we didn’t want to put everything in the building, have it become successful and nothing happen in the neighborhood.”

A similarly massive former Sears building from the jazz-age in Atlanta was redeveloped into the Ponce City Market, he noted, which has 350,000 square feet of retail inside.

“The hope (with Crosstown) is once there is 3,000 people present who are here every day, that spurs development across the street,” Richardson said.

When selecting new tenants for Crosstown Concourse, Richardson said one of the goals was to curate a collection of businesses and organizations that brings together a cross-section of the city in terms of demographics.

Various buildings surrounding Crosstown Concourse are vacant and blighted. The vertical urban village was designed with minimal retail so it can have a significant economic impact on the neighborhood, but real estate brokers say an intentional, guided approach to commercial development is called for. (Memphis News/Houston Cofield)

“You have the headquarters of nexAir, next to Church Health, next to Crosstown Arts, next to Methodist Healthcare, so the people who are coming and going at Concourse are a really diverse group of folks generationally, professionally, economically,” he said. “So if retail responds to the demands of the people, our hope is that by putting such a diverse group of people together at Concourse it inspires an equally diverse range of retail across the street.”

When it comes to attracting those businesses, Richardson said it is less about growing something new, and more about renewing it to what it was.

Another former Sears building, redeveloped as the Midtown Exchange in Minneapolis, Minnesota, is probably the closest example of the type of success Richardson said they are looking to achieve in Memphis.

“That building is in a neighborhood called the Phillips neighborhood,” he said. “(It’s) very similar to Crosstown in terms of its proximity to downtown, the diversity of the neighborhood and what happened after Sears.”

In the Midtown Exchange development, most of the office space was taken by anchor-tenant Allina Health, which relocated its headquarters into the building, creating a medically-driven developmental ripple effect into the surrounding neighborhood.

One of the most notable elements of the Midtown Exchange is the Midtown Global Market, which is a 75,000-square-foot food/retail space that brings together all of the different cultures in the Phillips neighborhood.

“Because of a similar approach to thinking about multiple points of entry, if you will, from a price point perspective, they have really been able to retain a lot of the authenticity of the different cultures in the area,” he said. “It’s less about growing it to be something new, and more about renewing it to be what it was.”

IF YOU BUILD IT, THEY WILL COME

What happens along Cleveland Street is extremely important to the future of the surrounding area and the project as a whole, says Darrell Cobbins, president and founder of Universal Commercial Real Estate.

Now that Crosstown Concourse is in full operation, the hope is that it spurs new businesses to open along the Cleveland corridor around it. (Memphis News/Houston Cofield)

 

“Coming from the north and south (on Cleveland), those gateways are the primary arteries to get to the building, so I think long term, those need to be enhanced into entities that are complementary to the neighborhoods.”

It is crucial for development along this corridor to be intentional and deliberate, he added, with community stakeholders, developers and city leaders all working together to mitigate the possible unintended consequence of gentrification.

“I think that process is very important to ensure that the neighborhood and community remains true to its history and character and does not fall prey to gentrification,” Cobbins said. “I think that’s a question mark and concern for a lot of people post-Crosstown.”

Cobbins also said an intentional, guided approach can help keep development in the area from stalling outside of the main investment, citing the FedExForum and Le Bonheur Children’s Hospital as nine-figure investments that were undoubtedly successful in their own right, but failed to create change in their immediate vicinities as quickly as many would have hoped.

“What the lesson is to me, is that you can put $200 million in one location and for 10 years, nothing may change around it,” he said. “You can’t just sit back and think that it’s going to happen on its own. Now that we got thousands of people coming in every day and all of those retail operations open on that site, what tools, incentives, planning and piggyback investments need to occur so we’re not sitting here 10 years from now wondering what may come down the pipeline.”

Shawn Massey with the Shopping Center Group is another real estate broker with ties to the Crosstown Concourse. He said some problems with renovating properties along the Cleveland corridor stem from some property owners being unreasonable in their prices.

“Many of the retailers we unfortunately had to turn away from Crosstown Concourse would make excellent neighbors in the community,” Massey said.

The Crosstown development team intentionally kept retail operations in the building below 6 percent to push retail growth into the surrounding neighborhood, but some current property owners are not willing or financially able to rehab their buildings to make them feasible for retailers.

The housing market around Crosstown Concourse has been a mixed bag, but homes in Vollintine-Evergreen have seen values steadily increase. (Memphis News/Patrick Lantrip)

“As the buildings sit empty, people get realistic that their profit expectations will not be met and they finally settle at a reasonable price,” Massey said. “But the community hurts while you wait it out.”

A HOUSE DIVIDED

When it comes to retail, density and demographics are two of the biggest driving factors. Crosstown is one of the most racially, generationally and socioeconomically diverse areas in the city, so many people view what’s happening at the Concourse as a microcosm of the city as a whole.

“I think Midtown in and of itself is known for being sort of a mixed-income community, but I think especially when you get over into that Crosstown area, there are some very intriguing demographics that occur,” Cobbins said. “There is a large immigrant population, working class, middle class, and upper-income folks all within less than a mile, maybe even a quarter mile radius of that location. So I really believe that it could be a testing ground for some really unique initiatives.”

To the east of Crosstown lies the Evergreen Historic District, which unlike some of the other surrounding neighborhoods, remains a prominent, thriving area, due in part to its proximity to Overton Park and its stock of historic Gatsby-era mansions.

North of Evergreen lies the Vollintine-Evergreen neighborhood. It has remained relatively steady over the years by avoiding the extreme economic highs and lows some neighbors experienced, and is currently seeking historical preservation status from the Memphis Landmarks Commission.

To the north and west of the Concourse lies the communities of Speedway Terrace, Klondike and Smokey City, which, in many ways, were hit hardest by Sears’ departure.

U.S. Census data from 2010 shows the population breakdown in the 38112 ZIP code, which is mostly north and east of the Concourse encompassing Vollintine-Evergreen, at 52.9 percent African-American, 35.6 percent white, 4.9 percent Hispanic, 2.5 percent Asian and 4.2 other.

In the 38107 ZIP code north and west of Crosstown Concourse that includes Klondike/Smokey City, African-Americans make up 82.3 percent of the population and whites 14.8 percent.

Housing stock is similar in both ZIP codes, according to 2015 Census data, which shows the housing decline experienced since Sears closed and since the Great Recession has not rebounded like in other parts of Memphis-Shelby County.

There are 8,730 in the 38107 ZIP and 7,875 in 38112, with housing unit vacancies of 21.9 percent and 19.4 percent, respectively. Rentals comprise 14.2 percent and 12.2 percent of housing units, respectively.

When it comes to housing sales, the Vollintine-Evergreen ZIP code of 38112 outshines its neighbor Klondike/Smokey City, according to real estate information company Chandler Reports.

Since 2014, there have been 1,064 home sales in 38112, with the average sales price rising from $121,385 to $135,221 in 2017, year to date. The sales price per-square-foot is up about 14 percent over that time, Chandler Reports data shows.

In 38107, by contrast, there have been only 816 sales since 2014 with the average sales price rising from $80,166 to $86,940. The average sales price per-square-foot has risen just 8 percent in Klondike/Smokey City.

But Klondike may have hit a turning point this year – the sales average is up 14 percent year-to-date in 2017, after dipping below the 2014 average of $80,166 in both 2015 and 2016 before rising to near $87,000 this year.

Quincy Morris, executive director of the Klondike Smokey City Community Development Corp., said that while Crosstown Concourse is a great investment, it should also be viewed as an opportunity to enhance neighborhoods surrounding it.

“Klondike and Smokey City are two of the oldest African-American communities in North Memphis,” she said. “So now is the time for our developers and our city leaders to devote funds toward our community, which has been lacking for a long period of time.”

Morris, who is creating a new economic development plan for her neighborhood, said the two most pressing needs are jobs and housing.

“When we promote economic development, we are not promoting displacement, we are promoting our community being rebuilt and revitalized,” she said. “If the housing stock was available, I think you would have a lot of people who once lived in our neighborhood move back.”

While redevelopment is desperately needed, gentrification is also a looming threat, Morris said, so deliberate measures including but not limited to tax freezes should be taken to help keep residents in their homes.

“We definitely want new people, but we don’t want to change the flavor of our community,” she said.

One of her CDC’s immediate goals is changing the narrative and stereotypes surrounding the historic and proud North Memphis community that Tom Lee and many other pillars of the African-American community once called home.

“If people know about the good things going on, they will be interested,” she said. “We want to work with our partners, the developers and the city, to see if we can’t do the same thing and make Klondike look good like Crosstown.”

The Crosstown Memphis CDC also has a role.

“The purpose of the CDC is to get people to come out and get involved in their neighborhood,” said Porsche Stevens, community relations coordinator for Crosstown Arts, a Crosstown CDC board member and Crosstown resident since 2009. “Our focus is neighborhood safety, beautification and economic development.”

Stevens hopes to one day see the retail corridor along Cleveland filled with small business and arts-centric shops similar what developed along Broad Avenue.

“There are so many artists in the neighborhood who are out here grinding it out and have been doing it for a long time,” she said. “I just think it’s time to show the world, especially Memphis, what they have been doing these last 10 or 15 years.”

As for the residential side, she said her organization is hoping to bring all the existing residents in the area together like they once were while simultaneously attracting new neighbors.

“It’s been the people who have maintained the neighborhood throughout the years even when the building was dormant,” Stevens said.

Chandler Reports is an operating division of The Daily News Publishing Co.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 38 38 20,670
MORTGAGES 45 45 23,790
FORECLOSURE NOTICES 24 24 3,071
BUILDING PERMITS 187 187 42,781
BANKRUPTCIES 57 57 13,237
BUSINESS LICENSES 23 23 6,645
UTILITY CONNECTIONS 30 30 7,819
MARRIAGE LICENSES 27 27 4,670