Central Yards receives tax incentive
With the tax incentive, the developers Clayton Kemker and his father, Frank Kemker, plan to start construction as early as June and finish by October 2022. (Credit: Fleming Architects)
A planned, $77 million, mixed-use development in Midtown’s Cooper-Young neighborhood was approved for a tax incentive that will save developers $23 million over 20 years.
The Center City Revenue Finance Corp., an agency of the Downtown Memphis Commission, voted on Tuesday, Jan. 12, to approve the payment in lieu of taxes (PILOT).
The board voted 7-0 in the online meeting despite concerns voiced by one resident that Central Yards does not address the lack of affordable housing in Memphis.
With the tax incentive, the developers Clayton Kemker and his father, Frank Kemker, plan to start construction as early as June and finish by October 2022.
In recommending board approval, Downtown Memphis Commission staff member Brett Roler described Central Yards as “a terribly exciting infill development in Midtown that is the size and scale we think will be catalytic.” Roler is vice president of planning and development.
The project comprises seven buildings on 5.65 acres, 348 apartments, 615 parking spaces total in two garages, about 51,000 square feet of office or retail space, a public plaza, and a private drive built to the standard of city streets.
The site is generally southwest of Central at Cooper, sandwiched between an active rail line on the north and an abandoned rail line on the south.
Central Yards adds the desired population density and investment to the core city, Roler told the board.
Following CCRFC policy in awarding tax incentives for apartment developments of more than 50 units, at least 20%, or nearly 70, of the Central Yards units will be reserved for residents who make less than 80% of the average median income for Shelby County.
The policy does not dictate how much rent the landlord may charge low- to -moderate income residents, but requires that 20 percent of the units must be reserved for those making no more than 80 percent of the average median income.
In an email read to the board, resident Charles Belenky said that’s not enough to help residents who work in the lower-paying service industry and arts-related jobs and who play a major role in the success of Cooper-Young and Midtown.
“It is not an affordable standard for chefs or actors or dancers or musicians,” Belenky wrote. “I believe some housing ought to be available for people who earn as little as 50% of the median and I think 10% of the units should be at this price point.”
Cooper/Young-Midtown, he said, is experiencing high rents and high home prices.
“In particular, there is a very urgent need for truly affordable housing. We all want a community that is (inclusive) of people of all ages, ethnicities, and income levels. I’m not saying the burden of achieving equity should fall on this project but this project should not exacerbate the situation,” Belenky wrote.
Board chair Bobbi Gillis responded that she appreciates Belenky’s concern. But “we can’t change the direction in the middle of the game,” she said, referring to the fact that the Central Yards proposal meets the board’s existing policy for providing affordable housing.
Another Cooper-Young resident expressed concern that the developers were receiving a substantial tax break while nearby property owners must pay the full amount they owe.
Interim Downtown Memphis Commission president Ray Brown addressed that comment, saying that all nearby property owners should benefit because construction of a high-quality development will raise their property values.
Roler had pointed out that much of the 5.6-acre site is blighted or underperforming. A number of properties are vacant, ringed with razor wire or are aging, metal buildings.
Despite the tax incentive, Central Yards will still create $7.7 million more in local tax revenue over the 20-year period of the incentive than the property would generate without the development, the DMC staff calculates.
The developers also committed to meet another requirement tied to the tax break: To spend at least 25%, or $17.4 million, of the project cost with minority and women-owned business enterprises (MWBE).
(Correction: The original version of this story inaccurately described the board’s policy for apartment developers receiving the tax incentive. While 20 percent of the units must be leased to residents making no more than 80 percent of the average median income, the policy does not limit how much rent those residents are charged.)
Topics
Central Yards Center City Revenue Finance Corp. PILOT Clayton Kemker Frank KemkerTom Bailey
Tom Bailey retired in January as a business reporter at The Daily Memphian, and after 40 years in journalism. A Tupelo, Mississippi, native, he graduated from Mississippi State University. He has lived in Midtown for 36 years.
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