Downtown Memphis Artspace Project Wins $200K Grant (MDN)
“The South Main Artspace Lofts got a big boost from the Downtown Memphis Commission in an “extraordinary” grant that went beyond the parameters of its established financial incentive programs.
On Wednesday, Oct. 14, the Center City Development Corp., an affiliate board of the DMC, voted to give the nonprofit developer Minneapolis-based Artspace Projects Inc. a $200,000 grant.
The CCDC has only given out a handful of case-by-case grants, the most recent being $200,000 to the Memphis Area Transit Authority for parking and public infrastructure improvements related to the Central Station redevelopment project.
The Artspace grant will go toward streetscape and other public improvements including streetlights on either side of the property; a new sidewalk along the north side of St. Paul Avenue; and improvements to the west-side alley to accommodate parking and garbage enclosure.
In the proposal, the developers state that the project was unsuccessful in gaining 9 percent low-income tax credits and instead received 4 percent, an equity amount totaling $5.4 million. Being that 100 percent of the building is rent capped for low-income tax credits, the building could not afford to take on any more debt to accommodate the funding shortfall.
The Artspace Lofts, she continued, are $400 a month below everything else in the current market.
The developers and the DMC agreed that as a condition of the grant, the rents will be capped and Artspace will own the building for the next 30 years. If the deal is broken, the DMC will recoup the grant. Additionally, the developers will have to attain 20 percent women- and minority-owned business participation. This adds up to $2.3 million diversity inclusion.
The $200,000 grant brings Minneapolis-based Artspace Projects Inc. one step closer to closing the $1.5 million gap before the end of this year; $13.9 million already has been raised from the city of Memphis and through philanthropic sources including the Hyde Family Foundations, the Assisi Foundation and the Ford Foundation.
The developers also are expected to seek payment-in-lieu-of-taxes incentives from the Shelby County Health, Education & Housing Facility Board.
The project includes adapting the former United Warehouse Building at 138 St. Paul Ave. and adding an adjacent new building to offer 58 affordable live/work residential units and 7,000 square feet of community space.
The rents are set at 60 percent of the Memphis median income and range from $543 to $770 per month.
The project will go before the DMC’s Design Review Board before the end of the year.”