DOWNTOWN BUSINESSES TRADE RENT FOR MORTGAGE PAYMENTS
MICHELLE CORBET | THE DAILY MEMPHIAN
A number of local businesses have staked a claim in Downtown Memphis, transitioning from tenants to property owners.
The owners of McEwen’s restaurant are the latest to purchase the building they have been leasing for years from a trust out of Nashville.
The partners' $1.8 million investment will transform the boarded-up storefronts around their restaurant on Monroe Avenue into expanded dining space and an entrance to new residential spaces being built on the second floor.
The shift from rent to own has been evidenced by several purchases in recent years in a mix of Downtown districts.
Allworld Project Management is putting the finishing touches on its new headquarters in the Downtown core at 60 North B.B. King Blvd.
The circa-1925 building is the second investment the construction management firm has made Downtown. It is currently looking for a tenant to lease its former offices at 415 S. Front St.
Having a B.B. King Boulevard address was important for the Memphis-grown company, whose two principals have family ties to the late civil rights leader and former NAACP executive director Ben Hooks.
“It’s important for our legacy,” Allworld founder and CEO Michael Hooks Jr. said. “We’re building a brand we want to outlast our lives. We love Memphis. Both principals are Downtown residents.”
When Allworld Chief Administrative Officer Brent Hooks conducted early evaluations on construction costs, it was clear there was better return on investment out east, but the firm wanted to be part of the renaissance of Downtown and purchased the two-story, 12,000-square-foot building for $532,500 in 2016.
“It was a heck of a location to have designated parking, and across the street from two new hotels, but it did come with some risk,” Hooks Jr. said.
Soon after the purchase, Allworld discovered necessary safety repairs would put the company $150,000 over budget.
“We stalled the schedule for a year and focused on paying for HVAC and sprinklers with cash before we even went to the bank,” Hooks Jr. said.
The repairs were made possible through ingenuity, such as partnering with general contractors and HVAC contractors, who now use the Allworld offices as a showcase of their services. And through financial incentives.
Allworld received an $80,000 exterior improvement grant and $100,000 low-interest development loan from the Downtown Memphis Commission (DMC).
Combining the two incentives has made it possible for several other local businesses to put permanent roots Downtown.
McEwen’s: a $200,000 development loan and $80,000 exterior improvement grant
Doug Carpenter & Associates (DCA): $100,000 development loan and $44,041 exterior improvement grant
“Honestly, what we’ve heard from them is that they’ve been looking for their own space for a long time," said DMC president and CEO Jennifer Oswalt. “They said, ‘Why keep leasing if we can find a place of our own?’ All of them felt vested in Downtown. They knew it was the place.”
DCA founder and principal Doug Carpenter purchased the former Nabisco warehouse in 2017 for $1.4 million and renovated the 8,500-square-foot building into the firm’s new offices.
The property also has a three-story, 2,200-square-foot residence that hosts tourists and visitors from around the world as an Airbnb.
“To us, investing in a 100-year-old warehouse is about more than preservation,” Carpenter said. “It’s about building upon history in a currency that resonates with the evolution of Downtown Memphis. And with the incentives the DMC presents for improvement grants and development loans, the opportunity to own and create value for this building’s identity was incredibly compelling and has delivered great results for us."
Last month, DCA won six national ADDY Awards from the American Advertising Federation for its work branding and marketing its new headquarters at 11 W. Huling.
“The best thing about all these is they are so unique,” Oswalt said. “It shows the culture of the company by what they did with their building.”
After renovating its offices at 265 S. Front St. several times over the years, when it came time for another expansion, LEO Events made the decision to look for a space to call its own.
"We didn’t want to invest any more money in a building we did not own," said LEO Events partner Kevin Brewer.
In 2017, LEO purchased part of the former Wonder Bread Bakery project in the Edge District and transformed it into its new offices with help from a payment-in-lieu-of-taxes incentive from the DMC.
"If we were leasing it, I wouldn’t put in an investment then walk away a few years later," Brewer said. "We designed the space and the amenities in here because we know we own it."
The DMC encourages users of all sizes to consider moving Downtown because of its stock of available spaces and underutilized historic buildings.
“I continue to hear from people outside of Memphis how we are so unique because we have buildings that are still intact and able to be repurposed,” Oswalt said.