Dramatic Changes on the Horizon for 100 N. Main in Memphis
Memphis is buzzing these days with exciting developments, especially when it comes to the iconic 100 N. Main tower. The Downtown Mobility Authority, linked to the Downtown Memphis Commission, is gearing up for an important meeting on September 18, where they’ll discuss a potential shift in the project’s development agreement. If you’ve been following along, you’ll want to grab a comfy seat because this involves a significant price tag and a lot of moving pieces!
The Deal at Hand
So, what’s the big news? Well, the developers are being asked to purchase not just the main tower but also the entire 2-acre site that surrounds it for an eye-popping $4.5 million. That purchase will need to be bundled up and completed within 45 days, complete with a solid $500,000 down payment to kick things off. It’s a bit of a twist from the previous agreement which was established back in early discussions.
Currently, the project is hoping to secure a loan instead of a direct payment, which is likely designed to make things a bit more manageable for the developers. This deal is not just for show; the budget for this ambitious project has soared, from around $271.4 million to approximately $309.8 million, a hefty jump of 14% since November 2023!
Budgeting Woes and Solutions
The increase in budget isn’t just a minor hiccup; it represents more than $38 million in unforeseen additional development costs. But here’s the silver lining: the development team is knee-deep in “value engineering exercises” aimed at cutting costs while simultaneously seeking extra funding sources. Those construction costs can be quite tricky, as has been the case while juggling financing plus on-site operations. Back in July, Billy Orgel from the 100 N. Main LLC shared that earlier estimates hovered between $270 to $280 million.
In February, a 30-year payment-in-lieu-of-taxes (PILOT) was approved, laying the groundwork for funding that would help cushion some of these expenses. The estimated cost reported at that stage was around $282 million.
What’s Next for the Developers?
In March 2023, the project took another leap forward with preliminary bond financing approval, and the team aimed for secure financing by May 2024. If the Downtown Mobility Authority gives the green light to the new development agreement, ownership of the 37-story building will shift to the developers at 100 N. Main LLC. The team comprises talented local developers along with Kansas City’s Block Real Estate Services.
Excitingly, the ownership is set up as a 50-50 split between the local developers and Block, demonstrating a collaborative effort bringing together various expertise to revitalize this prime Memphis landmark.
Clearing the Way for Progress
The Downtown Mobility Authority currently owns the 100 N. Main tower, having acquired it in March 2022 for $10 million. Back then, they had also earmarked $7 million for interior demolition and cleanup work, a task that has seen continuous financial support from various bodies, such as a $5 million loan recently. The proposed changes to the agreement would allow this reimbursement to affect the purchase price significantly, effectively making the tower itself a steal at $1.25 million.
Once the dust settles on this new agreement, the plan is for the adjacent properties to be purchased at that $4.5 million price point, supported by a structured five-year loan to help the development team breathe a little easier. This may not be a walk in the park for the developers, but the future shines bright with possible reinvigoration of one of Memphis’s most historic spots.
The Bottom Line
As we gear up for the Downtown Mobility Authority’s upcoming meeting, everyone’s eyes are peeled to see how this project will unfold. One thing’s for sure—Memphis is on the brink of something exciting that’s bound to make waves across the city!
