Midtown catalyst
Developer bets on Crosstown as next area to pop
Don’t talk to Kay Black about sprawling lawns or guest rooms galore. As she enjoys her retirement years, the East Memphis resident is in the market for a smaller footprint and less maintenance.
Her quest to downsize led her to the edge of Midtown last week, where 19 new homes are being built a few blocks south of the Sears Crosstown project. Real estate hopefuls say Crosstown may be the next neighborhood to pop, fueled by a nearly $190 million makeover of the behemoth that once housed Sears’ regional headquarters.
“It’s just going to regentrify the area,” said Jay Reedy, new project coordinator for Reedy & Co., the developer behind the swath of new homes west of Cleveland. “We want to be on the front end of that.”
Sears Crosstown is now spoken in the same hopeful breath as Memphis success stories like Overton Square, Cooper-Young and Broad Avenue. Elements of major Memphis institutions are expected to move into the massive 14-story tower when it is redeveloped, including Church Health Center, Crosstown Arts, Methodist Le Bonheur Healthcare, Memphis Teacher Residency, Gestalt Community Schools, ALSAC and St. Jude. Three thousand people are expected to come in and out of the building daily, developers said.
“Fed-Ex Forum might have cost more — but nothing is more complicated or ambitious than that project,” Bob Loeb, whose Loeb Properties is credited with revitalizing Overton Square, said during a recent real estate forum. “It’s just going to be huge over in that part of town.”
Reedy & Co. is betting on Sears as a catalyst for the company’s first foray into building new houses. The Memphis property management company has renovated about 3,500 homes since Jim and Debi Reedy started the business in 1978. The Reedy’s have since been joined by their sons, Jay and Brad.
Commercial development in the Sears Crosstown area has started to trickle in: The Hi-Tone relocated its music venue to a strip center on Cleveland in May 2013, drawn by Crosstown Arts and the promise of Sears’ redevelopment. Since then, managing partner Jonathan Kiersky has seen incremental change: the opening of Co-Motion Studio and Amurica; gutting and renovation of area buildings; and the addition of two Memphis musical acts, the Memphis Dawls and Dead Soldiers, who moved their practice spaces to the neighborhood.
“It’s a long term-project,” Kiersky said. “What I envision, or what I hope, is in 5
years we’re going to have a lot of people walking and riding bikes — a mini city within the city.”
Except for Reedy & Co.’s project, residential development has been slower to materialize. Joe Spake, a real estate executive in the Midtown area, hasn’t seen a lot of investment in housing west of Cleveland, despite the area’s location just a short walk from Sears Crosstown.
The neighborhood is marked by modest brick homes interspersed with empty lots and a mound of land leftover from a planned extension of Interstate 240. On nearby Cleveland, coin laundries, thrift stores and auto parts retailers operate in the void left by Sears.
In Memphis, commercial development often precedes a residential migration, Spake said.
“Bottom line is, I think if Sears gets up and rolling and there’s all sorts of cool things happening there, that that neighborhood will transition pretty fast,” Spake said. “I’m not seeing it yet. But I’m very optimistic that we will.”
Some homebuyers are already taking Sears Crosstown into consideration when buying in areas east of Cleveland, pushing up values along streets such as McNeil, said Linda Sowell, co- owner of Sowell & Co. Realtors.
“I’ve seen clients going through the thought process of ‘ This could help’ because of the Sears Crosstown conversion,” she said. “They just think that’s a plus.”
Todd Richardson, co-leader of the Crosstown development project, said he has conversations weekly with people interested in the area, mostly for commercial projects.
“It’s very early,” he said. “I think people are just now realizing all of the great community amenities that are in the building that people are going to want to be near to.”
Another thing that could entice buyers is the promise of new homes. Older homes dominate the Midtown market, with more than half of occupied homes in the 38104 ZIP code built in 1939 or earlier, according to the U. S. Census Bureau’s American Community Survey.
Midtown has logged just one new home sale this year through October, and only a handful in 2013 and 2012, according to the Memphis Area Association of Realtors.
While Midtown buyers are often seeking that old-home charm, those hoping for modern amenities — like a two- car garage or new plumbing — can be out of luck. Reedy hopes to change that, with its 1,360-square-foot, 2-car garage homes priced from $125,000 to $135,000.
“Moving back into Midtown is what a lot of people are starting to do,” said Reedy. “We’re putting a home on the market that’s 80 years newer than the average home down there.”
But until Sears Crosstown debuts in 2016, developers hoping to cash in may have to fight an uphill battle.
Black, the retiree who liked the Reedy homes’ small, lowmaintenance lots on her recent drive-by, wasn’t as impressed by the neighborhood.
“The location would concern me,” she said.