Why developer Tom Intrator might not be done with his Pinch District plans just yet
Developer Tom Intrator may be looking for a partner amid the Pinch District sale and not a full-on fire sale.
"We got a few offers quietly both to sell or joint venture," he said via text to The Commercial Appeal. "My expectation is we likely will partner with an out-of-state developer as we very much believe in the development and the city."
Partnerships are nothing new in real estate business, and certainty not in Downtown Memphis. Nearby 100 N. Main recently saw a partnership between local developers and Kansas City-based Block Real Estate Services. Block was previously a rival during the initial bid process for the 100 N. Main redevelopment project.
On March 22, news broke that Intrator's 5.56-acre Pinch District development site was for sale. Real estate firm Newmark is brokering the sale.
The listing includes the 21-parcels acquired by Intrator and his 18 Main LLC firm. The $1 billion mixed-use development, which was announced in 2019, includes multifamily, commercial and office space along with an unnamed 406-room hotel. The site extends from Shadyac Avenue on the northern end to Jackson Avenue on the Southern half and is located primarily between between North Main and North November streets.
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Will the Pinch District incentives carry over?
The Newmark listing states potential buyers will "have the opportunity to assume up to $400 million of approved development incentives such as a PILOT, TIF and tax rebates." The listing also notes the approved 419-foot height variance approved for the development site.
On March 22, the listing noted $500 million of approved development incentives and has since changed to $400 million. However, that listing is slightly misleading regarding incentives and what is ultimately included.
The height variances and approved mixed-use development, zoning and land acquisition are all fair game. In June 2022, the Memphis and Shelby County Board of Adjustment approved a height variance that would allow for two buildings to share a 420-foot height limit.
The payment-in-lieu-of-taxes (PILOT) may not carry over. A 30-year PILOT was approved for the project in 2019. In May 2023, the Center City Revenue Finance Corp., an affiliate board of the Downtown Memphis Commission approved an extension for the PILOT that would push back its closing date until May 9, 2024.
Downtown Memphis Commission staff confirmed that PILOT transfers have happened, however, transfers prior to a PILOT closing are a rarity. The first step toward any board approval for a transfer would require the PILOT to be closed and financing secured. Additionally, without any significant construction or site development completed yet, such a transfer would be unlikely to be approved. There's also the caveat that any new developer coming in would have to accept all the previous development plans under the approved PILOT, which includes a 406-room hotel, approximately 942 residential units, retail space and more than 222,000 square feet of office space.
The last PILOT transfer the Center City Revenue Finance Corp. board approved was in September 2022 for the Chisca on Main. Main Street Apartments LLC transferred ownership to Rockcreek Plaza Apartments LP. The historic Chisca Hotel redevelopment was approved for a 20-year PILOT in 2012. The PILOT closed in 2014, and the historic property reopened as the Chisca on Main in 2015. Rockcreek inherited the remaining time left on the PILOT.
The Pinch District development site is also located in the Uptown TIF district, however, it is not eligible because it has already been a approved for a PILOT.
Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X: @neilStrebig.
This article originally appeared on Memphis Commercial Appeal: Developer talks future of Pinch District project in Downtown Memphis
