Memphis City Council reacts positively to Union Row presentation

By MICHELLE CORBET  | Special to The Daily News

Business Investments via tax dollars…. 

Union Row, Memphis’ new nearly billion-dollar planned development, received a warm reception from members of the Memphis City Council Tuesday, Nov. 2, during the body’s Economic Development & Tourism Committee.

“When we look at the numbers here, we know these properties generate $50,000 in property taxes, we’re not talking about a 75 percent abatement like a PILOT does,” Councilman Martavius Jones said. “We’re getting $3.5 million more on top of the capture for the TIF. I’m telling anyone who is listening right now, bring more projects like this to us.”

With a price tag of $950 million, Jones said the numbers speak for themselves. “This is exactly what we need to complete our Downtown growth from the north end to the south,” fellow Councilman Ford Canale said. “I don’t know how anyone could possibly be against this. It’s a great day to be a Memphian.”

In total, the project is slated to consist of a staggering 29 acres of Downtown Memphis generally located between Union Avenue on the north, Beale on the south, Danny Thomas on the east and Fourth on the west.

Phase 1 alone calls for 673 apartments, a 200-room boutique hotel, 85,000 square feet of commercial space that includes a 30,000-square-foot grocery/market, 344,000 square feet of office space and 1,327 spaces in two parking structures. All three phases would total 2,103 apartments, 380 hotel rooms, 388,000 square feet of office space, 126,000 square feet of retail including the grocery, and 2,590 spaces in parking garages.

Architecture firm LRK is designing Union Row, Kimley-Horn is engineering it, Montgomery Martin will build it and Loaded for Bear is branding it. Tyree Daniels of Duncan-Williams is consulting on financing and Tony Bologna of Bologna & Associates is a design consultant. “Everybody recognizes Union is this gateway,” LRK’s Frank Ricks said. “Union Row sets up for a great entrance into the core of downtown and compliments the ballpark on the south.”

Kevin Adams, managing partner of the developer, Big River Partners said they already have 65 percent of the land under contract. Construction could begin as early as June with an estimated completion date of August 2021. Additional phases will be built over the next six to eight years.

Councilman Frank Colvett called the project a game changer. “This is an incredibly complicated deal in terms of all the properties and pieces your attempting to put together,” Colvett said. “At the end of the day we’re taking what was $50,000 in taxes and creating $100 million that we are going to plow back into the area.” Tyree Daniels of Duncan-Williams, who is consulting on financing, said a project this massive will take multiple streams of revenue and a true public private partnership.

So to help offset some of the expenses, the developers are seeking designation as a 20-year TIF district, which would capture a portion of the additional taxes from the new apartments, hotel, commercial and office space that would then go toward funding public infrastructure such as streets, sidewalks, traffic signals and water and sewer lines.

Consulting firm Younger Associates estimates the TIF district would generate about $100 million for public infrastructure improvements. In addition to the TIF designation, the developers are expected to ask for a mix of incentives that may include new market tax credits and the new federal Opportunity Zones program, which was established through the Tax Cuts and Jobs Act, a community development tax incentive program designed to drive long-term capital to rural and low-to-moderate income urban communities by enabling investors to receive certain tax benefits on unrealized capital gains reinvested in Opportunity Zones through pooled Opportunity Funds.

Other notes: With a majority black population, Adams wants Union Row to be representative of Memphis and told council members he is working with business consulting firm CBIZ to create an ownership structure that would provide minority shareholder opportunities. Council chair Berlin Boyd questioned the number of market-rate apartments that would be built — 2,100 across all three phases. Franks said the apartments were not market-rate, but “institutional-grade” with wider doors and taller ceilings. “They will be upper end of the market for Memphis,” he said. Jones questioned if the developers were considering homeownership opportunities in future phases.

Adams said homeownership has been discussed and those conversations will continue.

“The apartments won’t just be for millennials. I love them. I’ve got four,” Adams said. “But we have to have housing for the old guys as well.”

Moving forward, the developers will visit the DMC’s Center City Revenue Finance Corp. board for TIF district approval on Dec. 11 and go before the full City Council for approval of the Union Row economic impact plan on Dec. 18.

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