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PILOT approved for developer to turn Midtown landmark into mixed-use commercial, residential property

The Downtown Memphis Commission said about 36 of the 181 potential apartment units would be considered "affordable housing".

MEMPHIS, Tenn. — A midtown landmark could be converted into a mixed-use retail and apartment complex. The 15-story Union Centre office building at 1331 Union Ave.

Tuesday, June 13, 2023, the Downtown Memphis Commission (DMC) approved a 12-year PILOT (Payment-in-lieu-of-tax) for the developer taking on the 15-story office building on Union Ave, known for its prominent portraits of blue dogs.  

The DMC previously said the New York-based developer doing business as “Union Crown Memphis” promised the project will generate revenue while keeping some of the future apartment units affordable.  

"Residential units always do well," Paul Young, president of the Downtown Memphis Commision who is also running for mayor said. "And so, we are excited to see them come online. It’s one of the things that has helped to stabilize our downtown.”   

The high rise, built in 1965, will go under a 12-year pilot to transform into 181 apartment units, including 4,500 square feet of retail space on the floors below.   

"This is a $37 million project," Young said. "About $9 million will be spent with local minority businesses.”  

According to Apartment List vacant rental properties in the south have decreased and with a lack of supply and ongoing inflation some landlords are drastically increasing rents since March of 2020. 

It’s a trend Young says will be tapered in this new development. 

"One of the requirements of our program is that at least 20% of the units will be affordable," Young said. "And so, the developers are committed to that and we’re excited about seeing that happen.” 

That comes to be about 36 of the 181 potential apartment Units being considered affordable housing.

And as for holding this outside developer accountable for maintaining quality standards through a third-party management company; Young says “We certainly will make sure we’re taking that up with the developer. Our stick, so to speak, is to revoke the PILOT, the economic benefit they are getting, if they are out of compliance,"

The DMC said previously construction will likely begin in the first quarter of 2024 and be completed within 18 to 24 months of the start date. 

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