2 Downtown grocery stores possible in expanded Union Row plan as demolition begins

Desiree Stennett | Memphis Commercial Appeal

One of the most anticipated elements of the massive Union Row project expected to transform an underutilized section of Downtown Memphis is its grocery store.

While a grocer could make Downtown more desirable for wealthier South Main residents with access to reliable transportation, it would be transformational for lower-income residents of South City — who endure an hours-long commute by bus to get to the Kroger on Poplar Avenue and Cleveland Street, the closest full-service grocer.

Landing a grocery store in Memphis: Lessons learned in Binghampton may apply to South City

Last month, Union Row developer Kevin Adams announced changes to the first phase of the project. Initially it was expected to cost about $511 million. Now, the reimagined and expanded first phase will cost close to $750 million. That will make space for around 300 more apartment units, a second hotel with 350 additional rooms and a new innovation center. It could also attract more new business to Downtown.

The development includes the possibility of a second grocery store, Adams told the Downtown Memphis Commission's Center City Revenue Finance Corp. during a presentation of the revised plan Monday morning.

As the meeting pushed on, an excavator prepared to knock down the Marine Supply building at Fourth Street and Union Avenue — the first structure to make way for Union Row.

"We're looking into two grocery stores," Adams said. "This is just a smaller one. We're looking into a larger one as well at another location."

Adams initially promised a single 30,000-square-foot store. Now there will be a 20,000 square foot store in the heart of the project bound roughly by Union Avenue, Danny Thomas Boulevard, Beale Street and Fourth Street, followed by a second one that is excepted to the larger and more affordable of the two if Adams can purchase the land needed for it.

"There are still a few other aspects of land acquisitions in the works that would allow for an affordable grocery very linked to South City and this development and the team has been dedicated to that work, even though it is not required of them," said DCM president Jennifer Oswalt. "They can produce the smaller grocery store in the middle of the development and move on, but they continue to work on the larger grocery."

Adams did not say what grocers would occupy either location, but when asked by CCRFC board member Jeri Moskovitz if he still plans to partner with an affordable, large, name brand grocery store, he said yes.

After the changes were presented, the board voted to approve a revision to incentives package offered to help fund the cost of Union Row. A Tax Increment Financing district initially approved after the project was first announced would have meant Adams would pay full property taxes, but about 75% of the taxes up to $100 million could be used on project infrastructure. Another $50 million was also approved to build two parking garages.

With the revised plan, the CCRFC board approved revised incentives, which included expanding cap on TIF funds to $185 million and nixing the parking incentive.

The board also approved a 30-year tax break for Tom Intrator, a New York developer planning a $1.1 billion project in the Pinch District near St. Jude Children's Research Hospital.

The first phase of the project, worth about $600 million, will include 942 residential units, two boutique hotels with a total of 406 rooms, along with around 170,000 square feet of retail and 222,000 square feet of office space.

Desiree Stennett covers economic development and business at The Commercial Appeal. She can be reached at desiree.stennett@commercialappeal.com, 901-529-2738 or on Twitter: @desi_stennett.