Wednesday, August 01, 2007

Jewels of Memphis: The Sterick Building

This is the first part of a conversation I had with June West, Executive Director of Memphis Heritage about the 4 great and threatened buildings of Memphis: the Sterick Building, the Sears Crosstown Building, the Tennessee Brewery and the Chisca Hotel. I've split the conversation into 4 parts for each building in the order above, the reverse order of the apparent threat. So the Sterick Building, as least threatened, is the first post.

Sterick Building, Memphis; photo by nicole perugini, http://www.11photographs.comJune West: Obviously the Sterick Building is pretty amazing. It was built by a Dallas company that went bankrupt and never moved into it. I've been told that it has quite a bit of asbestos. It's one of the downtown buildings that was a land lease property . In other words, the people that built the building took a 99 year lease out on the land, they didn't buy the land. The land is owned by a separate group from the building. So until you can merge those 2 arrangements, it's very difficult to create a business proforma because you're not controlling everything. That to me is the biggest issue with the Sterick Building. If you buy the building, you don't own the land. I think that land lease is up in about 7 to 10 years. Now it doesn't mean something can't happen but it means negotiations have to happen with the land owners . The Grosvenors, the Grosvenor family owns the land.

Gates of Memphis: Would the Grosvenors own the building at that point?

JW: I don't know. There's got to be something, when that lease is up, something else happens or kicks in. I'm not familiar with the legal binding situation. It is my understanding that this is one of the problems with the property.

The other is, obviously, like the Sears Crosstown Building, it is such huge square footage, that creating a single use for that building would be almost impossible , plus the cost of abatement, of possibly gutting the building, the whole nine yards, and making it a feasible financial deal. If residential keeps growing downtown, I think it would be a great residential property. Because of the height, you can pretty much see anything you want to, but I don't know.

I'm not a wizard on what's going to happen downtown. I think when the law school moves in you're going to see an influx of students that need apartments. There's not a lot of apartments now downtown. It's mainly condominiums. So maybe residential apartments. Obviously one of the benefits of redeveloping these types of properties has to do with historic tax credits. There are ways of doing it where the developer can get tax credits and a possible conservation easement, which is a different type of tax credit.

GoM: Is it being marketed?

JW: Not that I'm aware of. If someone were to inquire about it -- I've heard all sorts of rumors over the last few years that so-and-so was interested in developing it, but it's never been confirmed. Honestly I've never had the time to pursue something that's a rumor, unless someone said that they were going to tear it down. So far, that's not been something that I have heard .

GoM: It's one of those things, you worry about the Brewery, you worry about Sears Crosstown, you worry about the Chisca, but not this. But there's chatter about tearing it down and if you don't watch out, the next thing you know, they're really talking about tearing it down.

JW: It becomes something real. I have not heard any rumors that somebody's trying to develop that land, where it stands.

Ironically, where it stands was the original Hill Mansion. There were 2 Hill Mansions. There was that one downtown and then there was the Hill Mansion on Union Avenue which was one of the catalyst for Memphis Heritage's growth . MHI was started in 1975 but the Mansion's demolition was one of the catalysts for the growth of Memphis Heritage.

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2 Comments:

Blogger Todd said...

The link below has lots of cool pics of inside the Sterrick (scroll down after clicking):

http://www.uer.ca/locations/show.asp?locid=22590

3:34 PM  
Blogger gatesofmemphis said...

thanks todd. I'll check them out and try to add a link.

7:35 AM  

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