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VOL. 133 | NO. 113 | Wednesday, June 6, 2018

New Benchmark Owners Seeking Incentives for 4-Star Hotel

By Patrick Lantrip

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A Rhode Island-based company has acquired the site of the former Benchmark Hotel and is seeking a 15-year tax incentive from the Downtown Memphis Commission to demolish the structure’s remaining concrete skeleton and replace it with a new four-star hotel.

An exterior rendering of the proposed hotel that would replace the Benchmark Hotel at 164 Union. (CCRFC)

If approved, Magna Hospitality Group, doing business as MHF Memphis VI LLC, could begin demolition on the blighted structure in early 2019 and wrap up construction on the 170-room, five-story hotel roughly a year later.

Magna will be seeking a 15-year payment-in-lieu-of-taxes incentive, or PILOT, from the DMC’s Center City Revenue Finance Corp. for the $42 million project. The CCRFC meets Tuesday, June 12.

A DMC staff report released Tuesday, June 5, said that remediating the blighted condition of the former Benchmark Hotel has been a top priority over the past 18-24 months.

“That focus is in large part due to the highly prominent location of this property,” the staff report read in part. “Union Avenue is a key gateway to Downtown Memphis from the east and over 350,000 people attended a Redbirds game at the adjacent AutoZone Park last year alone.”

The previous owners, MNR Hospitality, acquired the property in 2012, a year after the Benchmark closed. They began demolition of the building’s exterior walls in 2016, but left the work unfinished until the DMC filed paperwork in Environmental Court earlier this year.

Environmental Court Judge Larry Potter declared the site a public nuisance in February, despite claims by MNR that it was still an active construction site. The building had been in a partially demolished state for more than a year and a half.

Currently, the annual city and county taxes on the property are $41,996. If approved, the PILOT would produce $203,852 in taxes on the property annually, a 385 percent increase from today, according to the DMC. During the 15-year course of the PILOT, this would result in a cumulative increase of $2.4 million.

Based in Warwick, Rhode Island, Magna Hospitality Group was co-founded in 1999 by Robert A. Indeglia Jr. According to its application, the company currently owns or manages 28 hotels totaling more than 5,800 rooms with a real estate value of over $1.5 billion.

In other action, developers of the Museum Lofts are seeking a 10-year PILOT from the CCRFC for their proposed 68-unit multifamily project across the street from the National Civil Rights Museum at 138 Huling Ave. 

Doing business as 138 Partners LLC, the development team consists of Robert Mallory, the chief administrative officer of Mallory Group, Mark Parmley of FedEx Corp. and local developer Vince Smith. 

Once the home of Lucky Cosmetics, the site on Huling currently contains several vacant attached buildings, the oldest built in 1901, according to the DMC staff report. 

The developers are looking to demolish the existing structures and construct lofts atop a new ground-up parking structure. 

“138 Huling Lofts will be a new beautiful ground-up, four-story building with 68 units containing a 3,300-square-foot courtyard in the middle, along with a second-story fitness area surrounded by glass,” Christopher Speltz, a representative with Renaissance Group architecture firm, wrote in letter of intent to the DMC. “The architecture will be very cutting edge, with brick, smooth hardi board panels and corrugated metal. The sleek design will be compatible to the trendy designs seen in new loft construction in Dallas or Washington.” 

Floor plans would range from 580-square-foot “micro units” to 830-square-foot studio lofts, to 1,268-square-foot, two-bedroom units. 

Currently, the property generates $7,842 in annual city and county taxes. If approved, the annual PILOT would equal approximately $51,245, or a 553 percent increase in taxes from what is currently generated, according to the DMC staff report. This would result in a cumulative increase of $434,031 over the 10-year PILOT. 

In total, the project is estimated to carry a $9.2 million price tag. In May, it was granted a density variance by the Shelby County Board of Adjustment. 

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 124 481 17,865
MORTGAGES 127 530 20,565
FORECLOSURE NOTICES 4 48 2,693
BUILDING PERMITS 195 891 36,836
BANKRUPTCIES 52 262 11,426
BUSINESS LICENSES 24 139 5,848
UTILITY CONNECTIONS 26 116 6,830
MARRIAGE LICENSES 26 133 4,049