Pre-development work on Downtown's tallest tower, 100 N. Main, set to get underway
Grinder, Taber & Grinder is the General Contractor on this project.
By Stephen MacLeod – Reporter, Memphis Business Journal, Jan 25, 2023
A Downtown board and 100 N. Main Development Partners, the Kevin Woods-led group seeking to restore the 37-story 100 N. Main building, have reached an agreement to begin pre-development work. The move on Wednesday, Jan. 25, comes as both sides progress toward a larger development agreement.
The Downtown Mobility Authority (DMA), an affiliate board of the Downtown Memphis Commission (DMC), voted to approve the deal, which allows 100 N. Main Development Partners to begin interior demolition on the building for their proposed project.
Such pre-development efforts would include a total of $7 million earmarked for getting Memphis’ tallest tower in shape for a complete renovation.
Since that work could benefit another potential developer coming in — if a development agreement with 100 N. Main Development Partners is unable to be reached — a sum of $3.75 million is being credited to the eventual $10 million purchase price for 100 N. Main.
The reason for the credit, according to DMC president and CEO Paul Young, is that it puts the risk on the developer. If the group is unable to get a development agreement in place, the work on the building will not go away.
Currently, the DMA owns 100 N. Main, and if an agreement is unable to be reached, the Downtown Mobility Authority would retain the building.
"If they make [the] decision [to not go forward] after they have made investments in the property while we own it and have improved that property at no cost to us, we get a win," Young said. "If they make the decision after they have done the interior demo, have closed on the property, and sit on the property for [a to-be-determined] amount of years, there will be a reversionary clause that is included in the final development agreement, which would allow the property to come back to the DMA."
This is the second update on the proposed project since November, when the development group revealed that costs for the project had skyrocketed. The two-phase project was originally slated to cost $267 million. That price would have covered the first phase renovation of the tower and the second phase construction on an adjacent lot. Now, the tower renovation work alone is estimated to total $261 million — up from $215 million.
The root of the cost increase involves an uptick of $34 million in construction costs and an additional $8 million in interest. Those changing conditions come with a backdrop of lagging capital and bond markets.
The DMA board gathering on Jan. 25 was the second meeting about the pre-development agreement. The board originally took a vote on Jan. 19 to delay a week in order to better understand the agreement. According to a presentation from the first meeting, the entire pre-development process should take 12 to 14 months and could be ready to start as soon as February.
The $7 million in pre-development work includes:
Abatement and demolition: $5.5 million
Elevator repair: $780,000 (or replacement with a hoist system: $700,000)
Lighting, barricade, and standpipes for safety: $525,000
Temporary power and lighting: $400,000
Debris, mold, and waste removal: $400,000
