Evanoff: Downtown building boom could surpass $2.9B
New investment in Downtown Memphis real estate could surpass $2.9 billion over the next few years if all the plans proceed.
It would add up to the largest investment boom Downtown since the center city commercial district emptied out following the 1968 assassination of Martin Luther King Jr.
Over the last decade, investors have pushed back at Downtown blight one building at a time. The new wave promises something larger. Each project would energize a wider swath than the block the building stands on.
Six significant deals are on the books including One Beale, the on-again, off-again real estate development first outlined 15 years ago.
On Tuesday morning, officials of Memphis-based Carlisle Corp. announced One Beale’s first phase will proceed. Carlisle would redevelop the former Ellis Machine Shop, a historic site at 245 South Front, leading the way for an upscale hotel and luxury apartments.
Since the One Beale idea first surfaced, other real estate investors have stepped in, spending more than $500 million in total.
They’ve renovated old warehouses, the shuttered Chisca hotel, the closed 19th century Tennessee Brewery and turned old retail stores into fresh condo and apartment developments.
Taken together, all the projects brought new life to a forlorn end of the old center city; particularly along Main south of Beale near the Central Station railroad terminal. Central stands two blocks from MLK’s assassination site at the Lorraine Motel.
While these projects have spruced up old buildings, few of the real estate deals have been transformational like the Lorraine’s redevelopment in 1991 into the National Civil Rights Museum. It brought in tourists and paved the way for new restaurants and nightlife.
For the first time in a century, the old center city became a desirable living area for well-to-do baby boomers and men and women in their 20s and 30s. That, in turn, spurred the $55 million renovation now underway of Central Station’s office tower into a boutique hotel.
Now a string of similarly transformational projects is on the books. Most of them tie into the city’s science and medicine industry or the growing tourism and hospitality sector.
Here’s a look:
While plans for a 30-story tower have been shelved, One Beale backer Carlisle Corp. estimates the investment will range between $60 million and $100 million. One Beale would encompass 5.5 acres.
Brooks Museum of Art
Brooks’ proposed move would relocate the museum to the site of the Front Street fire station. This would bring a fresh inflow of tourists. Proposed pricetag: $110 million. It could mesh with other talks of putting an aquarium on nearby Mud Island.
100 North Main
New York developers plan a convention hotel, apartments, restaurants and offices on the site of 100 North Main. The investment could near an estimated $1 billion and cover three acres.
Memphis Cook Convention Center
The new hotel would support Memphis Cook and its $175 million renovation. Both the hotel and the renovated Cook are intended to draw more and larger conventions.
Wonder Bread Bakery
The $73 million project would bring apartments, restaurants and a museum to a former bread factory near the Memphis Medical District, where officials have provided incentives to encourage employees to relocate near the hospitals and schools. While new residents in the Wonder Bread area technically would not live in the center city, 100 North Main is visible a few blocks away and accessible by trolley, bus and sidewalk.
St. Jude Children’s Research Hospital is beginning the widely reported $1.2 billion expansion of its campus into Downtown’s old Pinch District near Memphis Cook.
Besides this slate of proposed projects, the $250 million South City residential project is under way on the south edge of Downtown, along with the $16 million renovation of the Hickman office building. A $6.2 million renovation has been completed on the landmark Universal Life building.
In the past, major buildings have gone up, such as the First Tennessee Bank tower in the 1960s. But there has never been this volume of ambitious real estate investments.
Add it all up, and Downtown is on the edge of a significant transformation.
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at email@example.com and (901) 529-2292.