VOL. 133 | NO. 137 | Wednesday, July 11, 2018
Downtown Board Approves Tax Breaks for South Main, Beale Projects
By Patrick Lantrip
A pair of potentially place-changing projects were approved for PILOTs by the Center City Revenue Finance Corp. on Tuesday, July 10.
In addition to receiving tax incentives from the Downtown Memphis Commission-affiliated board, the redevelopment projects at 18 S. Main St. and 380 Beale St. will get a noticeably contemporary upgrade from their current iterations.
At 18 S. Main, Tom Intrator, a New York investor hand-picked by the DMC, is planning to self-finance a $4.6 million adaptive-reuse project on the Main Street Mall that would completely overhaul the look of the building.
“The argument is imagining a more modern, contemporary approach to the building,” DMC vice president of planning and development Brett Roler said at the meeting.
According to Roler, the 1920s-era building’s storefront has seen several major overhauls over the years that has drastically altered the original intent of the design.
“So our Design Review Board chair, along with the staff, has been working with the applicant to think about new contemporary ways to reimagine the building,” he said.
Roler indicated that he has received half a dozen or so calls since the renderings first became public expressing excitement for the return of contemporary architecture to Downtown Memphis.
The reuse project was spurred along by the Center City Development Corp., another DMC-affiliated board, in the hopes of finding a new owner to rehab the property.
“The CCDC secured the property an option contract on the property and issued an RFP trying to find developers to take on the project, and as a result of that we selected Mr. Intrator,” Roler said. “CCDC’s contribution is about $200,000 to help reduce the acquisition cost of the property.”
The ground floor of the building will have about 6,500 square feet of commercial space for a restaurant or similar use, with an extra space on the lower levels, while the second and third floor will have creative office space.
During the meeting, Intrator said he is no stranger to Memphis and has been investing in the area for about six years. The New York resident said he owns roughly 1,700 local apartment units through a property-management company he owns in Memphis.
Currently, the annual city and county taxes on the property is $8,459, but during the term of the 13.5-year PILOT, DMC staff estimates the annual payment in lieu of taxes would equal $24,739, which would result in a cumulative increase in taxes generated by the property of approximately $219,772.
Meanwhile, another project will see a 1970s-era former dance club with a checkered past torn down and replaced with a modern five-story 120-room hotel at the corner of Beale and Fourth streets.
East Tennessee investor Nick Patel, who also owns two other hotels Downtown, at 235 Union Ave. and 195 Union Ave., was awarded a 15-year PILOT for the $16 million project.
Patel said he first got to know the area while in town visiting friends.
“We own and operate about six hotels in the Knoxville and Pigeon Forge area,” Patel said. “I have a lot of friends who went to the University of Tennessee who lived in Memphis.”
Patel said that he always thought that area of Beale Street was in need of new development.
“So I’m glad and excited to see it developing out nicely,” he added.
Patel said that construction could start as early as July of next year and wrap up as soon as fourth quarter 2020.
Currently, the property generates $18,678 annually in city and county taxes. The annual payment in lieu of taxes would equal approximately $80,683 over the course of the 15-year PILOT.