VOL. 133 | NO. 9 | Thursday, January 11, 2018
Orion, LEO Buy Slice of Wonder Bread
By Patrick Lantrip
The Center City Revenue Finance Corp. approved a trio of sales on Tuesday, Jan. 9, including two involving the $73 million Bakery Development in the Medical District and the Beale Street Hampton Inn.
Orion Federal Credit Union and LEO Events were given the green light Tuesday, Jan. 9, to buy headquarters properties in the Wonder Bread development. (Daily News File/Andrew J. Breig)
Most notably was Orion Federal Credit Union’s request to purchase the site of their future corporate headquarters at 400 Monroe Ave. from the site’s developer, PKG Properties.
Since the CCRFC approved a 20-year tax incentive to help offset construction costs for PKG Properties in August, Orion had to seek a partial assignment from the board, an affiliate entity of the Downtown Memphis Commission.
“Two of the users have wanted to own the property that they are going to be using, rather than leasing,” CCRFC attorney James McLaren said Tuesday at the CCRFC meeting.
Orion had to seek an assignment because CCRFC policy dictates that if a project is assigned before the PILOT lease closes, the applicant must go before the CCRFC board, McLaren explained.
“Because it was graded as one project, the condition in your approval, is that the whole entire project has to close by Dec. 31, 2018,” McLaren added.
If it does close by that time, the CCRFC will have an opportunity to reevaluate the PILOT.
CBRE executive vice president Kevin Adams spoke on behalf of Orion FCU about the growing company’s desire to purchase an additional portion of the project for their headquarters.
“They’re already growing so fast, they decided the (nearby) Cadillac Building needs to be a part of their office space as well,” Adams said. “They were thinking about making it commercial space, but right now the thinking is that it will not be commercial space, it will be office space for (Orion).”
Also seeking to purchase their portion of the mixed-use Bakery Development is LEO Events.
“LEO Events is Kevin and Cindy Brewer, they are in the event planning business, they work with a lot of national companies,” Adams, who also represented LEO, said. “They have really grown into a successful company here in Memphis.”
For its partial assignment, LEO, which also operates an office in Nashville, was looking to purchase 407 and 411 Monroe Ave. for their new headquarters.
“They have been renting space for years on the south side of Downtown, and this was an opportunity they saw to potentially help them grow their business and own something,” Adams said.
In total, the $73 million mixed-used Bakery Development project consists of 86 upscale multifamily units, a 480-space parking garage and 150,000 square feet of office and retail space spread out across five parcels centered on the former Wonder Bread factory on Monroe Avenue.
In other business Tuesday, the CCRFC approved Richmond, Virginia-based Apple Hospitality REIT’s lease assignment request to complete the purchase of the Hampton Inn & Suites Memphis – Beale Street, prominently located at 175 Peabody Place in Downtown Memphis.
According to a letter sent to Downtown Memphis Commission president Jennifer Oswalt, Apple and the hotel’s current owners, Cary Watermark Investors, entered into a purchase and sale agreement on Dec. 22, 2017, which had to be approved by the CCRFC on or before Feb. 5, 2018.
The expectation is that Apple will continue to operate the property as the Hampton Inn & Suites Memphis – Beale Street after the assignment of the lease by Cary Watermark Investors to Apple, according to a letter from David Buckley, Apple executive vice president and chief legal officer.
Apple is currently in discussions with third-party hotel management companies regarding management of the property, including the current hotel manager, Buckley said.
Apple Hospitality REIT has a portfolio of 239 hotels, with about 30,300 guest rooms in 34 states. Apple’s wholly-owned subsidiary, Apple Nine Hospitality Ownership Inc., will take over official ownership of the hotel.