This story will be updated. 

A development team hopes to convert the 15-story office building at 1331 Union Ave. — known for its prominent prints of George Rodrigue’s blue dogs — into a commercial mixed-use property. 

Doing business as Union Crown Memphis, the team has submitted an application to the Downtown Memphis Commission’s Center City Revenue Finance Corp. for a 12-year PILOT to transform the Memphis landmark into 181 apartment units.

Built in 1965, the building includes 400 parking spaces in a four-story garage and 156,342 square feet of leasable office space in the 10 floors above.

Although the building is partially occupied, several of the office floors have been entirely vacant for many years, and the building’s condition is deteriorating, the DMC noted in its staff report of the project. 

The applicant’s plans call on converting 1331 Union Ave. from office to multifamily, with leasable commercial space and residential amenities on the ground floor.

The DMC report also noted that the property has “struggled as an office building.”

“Its location in the heart of the Medical District, existing structured parking and expansive views make it an ideal candidate for residential conversion,” the report said.

“Downtown’s Medical District is a major employment center, but it still contains a relatively small amount of housing to meet demand from the district’s many workers. Converting an underutilized office building in the medical district to multifamily residences will help to increase the district’s residential population and support further growth and activity in the area.”

The building’s 181 residential units would contain a mixture of units ranging from studios to 2-bedroom apartments, and outdoor residential amenities would be provided on what is currently the top floor of the garage.

The conversion would also include the creation of up to 4,500 square feet of new ground floor retail space with frontage on Union Avenue. 

If a PILOT is approved for the project, the applicant estimates that construction will likely begin in the first quarter of 2024 and be completed within 18 to 24 months of the start date.

The DMC estimates the total development cost of the project at around $54.8 million. 

To be eligible for a PILOT, the value of the proposed building renovations, site improvements or new construction must be equal to, or greater than, at least 60% of the total project cost. Based on the preliminary budget, the project meets this requirement, the DMC staff report states.

To secure financing, the development team plans to incur $44.75 million in debt (or 81.6%) and more than $10 million (or 18.4%) in equity. 

According to the DMC, the current annual city and county taxes on the subject property total about $45,112.

“A PILOT would allow for a complete renovation of this underutilized office property into an active residential property with 181 new housing units,” the DMC wrote in its report. 

During the 12-year PILOT term, the annual payment in lieu of taxes is estimated to equal about $275,692. This represents a 511% increase from the amount of taxes currently generated by the property. Over the course of the 12-year PILOT term, the cumulative increase in taxes generated by this property would be about $2.8 million.