Dudas

When the Peabody Hotel closed in the early 1970s, many residents of Memphis, Tennessee, felt as if a part of the city’s soul was lost. So when Belz Enterprises renovated and re-opened the hotel in 1981, residents started to gain a new interest in the community, not only downtown, but citywide. Thus began the revitalization of downtown Memphis, a city that was “left for dead,” according to John Dudas, vice president with Belz Enterprises, an active Memphis developer. But unlike many other downtowns across the country that have undergone revitalization in recent years, Memphis’ revitalization has been led by residential, not commercial, development.

Dudas

“We would like to think it’s due to a combination of visionary developers, good planning and ample public incentives,” says Jeff Sanford, president of Memphis’ Center City Commission. “But in the end, I have to think it’s the draw of the mighty Mississippi River, with its incomparable sunsets, that has attracted so many.”

With its alluring qualities, the Mississippi River is where, understandably, much of the development energy is being focused. In March of 2000, the Riverfront Development Corporation, a non-profit entity, was created and contracted with the city to manage, operate and develop the riverfront. The group’s master planning firm, headed by Cooper Robertson, developed a visionary and transformational plan, and it was eventually approved by the city council in May of 2002.

The plan’s primary objective was to get people to the water and to provide access for those people. And the timing was right. Before 2000, the community wasn’t ready to face riverfront development because of the condition of downtown. There was little to draw residents to the city or the riverfront.

Lendermon

“We had this void of activity that existed between downtown and the waterfront, and we wanted to take advantage of the city’s current momentum, fill in the void, and redevelop the area,” says Benny Lendermon, executive director of the Riverfront Development Corporation. “We also wanted to provide access to the waterfront that would keep downtown from growing away from the riverfront and, in turn, spur and increase the momentum of what was currently happening downtown.”

The overall plan for reuniting downtown and the river calls for extending the city of Memphis out, closing a major portion of the harbor, filling it in and creating roughly 50 acres of land that connect to the waterfront. Additional plans include a significant number of improvements along the 5-mile stretch of waterfront with public access along the water’s edge and greatly improved green space. Even as the master plan was being finalized, improvements were taking shape. These included construction of a cobblestone walkway along the top of the Cobblestones, which will be renovated to once again become a landing for commercial riverboats, and improvements to Riverside Drive, which beautified the road, slowed traffic and provided connections back to the city.

Also on the planning table is Mud Island. For the first time in its history, the island will be seamlessly integrated into the city and easily accessible from downtown by the construction of a land bridge from Court Street to Poplar Avenue. Another critical part of reuniting downtown and the river is the Overton Heirs Blocks. If properly developed, the blocks will eliminate the physical and visual barriers that now exist along the waterfront. Mixed-use development and a well-designed street system will encourage pedestrian traffic from Main and Front streets to the river.

Rendering of Memphis riverfront master plan.

Plans also call for the downtown harbor and the lake to be connected by a new mixed-use neighborhood. Currently the most valuable real estate is not along the riverfront, but real estate values are expected to increase as new addresses are added. In fact, another factor that has contributed to the residential boom in downtown Memphis is the availability of open land for new construction — land that sits along the river bluffs and riverbanks. Currently, much of the land is devoted to railroads, parking, industrial and parkway infrastructure, or is underutilized (Mud Island and Overton Heirs Blocks).

A number of local and national developers are already taking advantage of the prime real estate sites — developers such as JPI, which is putting in a 400-unit apartment project on Mud Island, and Henry Turley Company, which has been developing residential and commercial projects in the Memphis market since 1977.

One of Henry Turley’s developments is a New Urban neighborhood called Harbor Town, which was established in 1989 by Island Properties Associates — a partnership between Belz Enterprises and Henry Turley Company.

Turley

“One of our long-time initiatives has been working to re-build the downtown in Memphis,” says Henry Turley. “When we first started thinking about it around 1977, we thought a component of a traditional city that was so clearly missing from Memphis and from typical cities our size was residential. So for some 20 years, we’ve focused most of our energy on putting housing in the city.”

A planned community, similar to Seaside and Celebration in Florida, Harbor Town is located on 135 acres of Mud Island in downtown Memphis. The mixed-use community consists of more than 950 homes, more than half of which are privately owned. The community features ponds, wetlands, walking paths and parks. When complete, the development will have 30,000 square feet of office space and 25,000 square feet of retail.

Another Belz/Turley partnership is Uptown, the redevelopment of former public housing sites and other distressed property just north of downtown into viable mixed-income communities.

Downtown Memphis’ South Bluffs residential community.

“Downtown has been reasonably successful in beginning its redevelopment, and we hope that the proximity of the downtown amenities and assets — from jobs to entertainment to schools — to Uptown can become something of a seamless situation,” notes Turley.

Uptown will include 1,000 new homes and apartments, for a range of income levels, in a traditional neighborhood setting. A $150 million public-private partnership, including a $35 million HUD HOPE VI grant to the Memphis Housing Authority, Uptown will also feature new infrastructure, parks, streetlights and landscaping.

Building Boom

Since the Peabody Hotel re-opened, downtown Memphis has undergone a building boom valued at approximately $2 billion — the largest in downtown’s history. Residential development is growing exponentially, both in number of units being made available and pricing for those units. Beale Street, the state’s Number 1 tourist attraction, has come more alive than it was in the past — with more and more people moving into downtown. Additionally, a number of exciting and tourist-driving projects have been completed, including AutoZone, a $75 million Minor League Baseball park right in the middle of Memphis, and Peabody Place, the area in and around The Peabody Hotel. Development of Peabody Place, which includes the expanded hotel connected to a three-level retail and entertainment center, began in 1980 when Belz Enterprises renovated the hotel, which is located at Union and Second streets. Peabody Place covers eight city blocks between Fourth Street and Riverside Drive and totals more than 2 million square feet of office, residential, hotel and retail space. The Peabody Hotel anchors the north end of the project, and the 265,000-square-foot AutoZone corporate headquarters anchors the west end. The Peabody Place Entertainment and Retail Center is located at the east end and includes more than 30 specialty shops, restaurants and entertainment retailers, such as Jillian’s, Isaac Hayes restaurant, Ann Taylor Loft and Victoria’s Secret; a 22-screen theater; and access to the Number 1 Hampton Inn and Suites in the world (designed to be like a mini Peabody Hotel).

Downtown’s Main Street is getting a makeover.

“We’ve had $2 billion worth of development, yet if you came to Memphis, having never been downtown, and walked along the six blocks of the traditional Main Street, you would find a street virtually untouched by this renaissance,” says Sanford.

So the Center City Commission created a Main Street redevelopment plan. To start the redevelopment, the commission has concentrated efforts on one demonstration block for the last 2 years — this is the block between Union and Gayoso, where private sector developers have, at various times, made attempts to assemble property but were thwarted in their efforts.

“In the last 2 years, we’ve managed to gain control of most of the properties we set out to gain control of, and we have been successful in optioning properties to private developers,” says Sanford. “Now tens of millions of dollars worth of construction is about to get underway, and the face of this block will change dramatically.”

Development will mostly consist of retail at ground level and residential above. As the Center City Commission had hoped, the Union/Gayoso block is already starting to spark the interest of private developers in the adjacent blocks on Main Street.

To attract developers downtown, the Center City Commission creates partnerships to implement projects and administers financial incentives that can help lower development costs. One such program is called PILOT, which allows developers to improve or stabilize a property through building renovations or new construction while freezing real estate taxes at the current predevelopment rate.

“Success attracts success,” says Sanford, “so we’re in the fortunate position right now of being approached from all sides by developers — local as well as regional and national — that are interested in various projects.”

At the moment, the Commission is in discussions with developers about several hundred million dollars worth of projects, which range from hotel and residential to office and commercial ventures. A number of smaller developers are buying historic buildings and renovating them for housing and a few new construction projects are being built, primarily by smaller developers as well.

One of the other characteristics of the residential redevelopment downtown has been the conversion of vacant office buildings into residential and hotel properties, such as Capital Development’s market-rate project called 10 Main Street.

“We are just now seeing some signs of life in office development,” Sanford says. “It wasn’t strong, and whatever sparks we saw were sort of hemmed by economic conditions, but now it’s starting to appear again.”

But downtown Memphis is clearly headed in the direction of residential.

“What we really see as our future for downtown is continued housing development,” says Dudas. “We have a very strong demand for housing. We also see continued emphasis on sporting and entertainment venues and building our tourist base. But the continued housing development, with great rental rates and high occupancy rates, has been a major factor in the success of downtown.”

©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.