AutoZone expands on Cotton Row as Memphis office construction perks up Expansion would redo pair of historic Cotton Row buildings

Ted Evanoff | Memphis Commercial Appeal

Almost a quarter century after moving Downtown, AutoZone Inc.’s headquarters has overflowed with workers, leading the retailer to buy a pair of nearby Cotton Row buildings that once housed prominent cotton merchants.

AutoZone will renovate two empty brick buildings at 104 and 110 S. Front St. into offices able to contain about 300 employees, company spokesman Ray Pohlman said.

The Memphis retail chain, which employs about 1,500 people in the 123 S. Front headquarters, is expanding into buildings put up side by side in 1880 and once home to Allenberg Cotton Co. and C.W. Hussey & Co.

AutoZone was the first major corporation to relocate into the then-faded Downtown and its current expansion underscores the new attitude finally taking hold in the center city toward office development.

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Downtown offices and stores began to empty in the 1970s and languished until entrepreneurs and investors in recent years gave empty old buildings new purpose as bars, restaurants, apartments and lofts, now housing more than 12,000 residents.

Retail stores and offices remain scarce, although offices are slowly coming back. Carlisle Corp.’s One Beale project and Townhouse Management’s 100 North Main makeover propose to build three office towers containing enough space for almost 5,000 workers.

One Beale construction could begin by December under a plan that calls for an eight-story apartment building, nine-story luxury hotel and 25-story office tower containing at least 200,000 square feet. The 5.5-acre site faces South Front a block from AutoZone and would include a rooftop restaurant overlooking the Mississippi River waterfront.

Townhouse, a New York investor, would turn the empty 100 North Main skyscraper into apartments and a 600-room luxury hotel serving the Memphis Cook Convention Center.

Next door, new office towers would stand atop a new garage, reach 25 stories in height including the garage and hold 500,000 square feet of office space.

Townhouse’s activities at the 38-story skyscraper follow the recent move of Bass Pro Shops into The Pyramid, the iconic arena that stood empty for years on North Front, and the $1 billion expansion getting under way nearby at St. Jude Children’s Research Hospital. Also, ServiceMaster’s 1,200-employee headquarters just moved from East Memphis into the renovated Peabody Place Mall.

"The acceleration of development in the Downtown core is possible,’’ said Chance Carlise, chief operating officer of Carlisle Corp., a Memphis restaurant operator and real estate investor.

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Low rental rates on Downtown property have discouraged lenders from making construction loans for new buildings, retarding growth in the central core. “We believe One Beale will help reset the market in respect to real estate rates and allow new construction to occur,” Carlisle said.

Only a handful of new office buildings have gone up Downtown since AutoZone relocated from East Memphis. With a vacancy rate of 20 percent in the best center city office buildings, renovations have been more common, especially over the last two years, including the Carlisle's Hotel Chisca renovation into a residential property.

Officials and investors in SouthernSun Asset Management are renovating the Hickman Building at 240 Madison and plan to relocate there from East Memphis. Nearby, the old Crane Co. office building was renovated at 254 Court for general use.

Wunderlich Securities relocated from East Memphis to One Commerce Square. The Meritan foundation departed East Memphis for 245 Adams. The empty Universal Life building at Danny Thomas Boulevard is being renovated for offices for economic development agencies.

AutoZone’s headquarters are contained in a 220,692-square-foot building that was opened in 1995 at 123 S. Front overlooking the Mississippi. The 2.4-acre site had been occupied by warehouses that once serviced riverboats hauling cotton.

Front Street between Peabody Place and Jefferson became known as Cotton Row when the city was considered the world’s largest inland cotton market and the Memphis Cotton Exchange thrived. More than 300 mill buyers, factories and cotton merchants were located on and around Front, including Allenberg and Hussey. Most of those firms moved to the suburbs, or vanished amid consolidations and the pressure of globalization on smaller firms.

Allenberg, now located in suburban Memphis, was ranked among the city’s four largest cotton merchants when it operated at 104 S. Front. French commodity giant Louis Dreyfus bought Allenberg in 1981 and in 2009 bought Dunavant Enterprises, also a major Memphis cotton business. After absorbing Dunavant, Allenberg was considered the world’s largest cotton merchant.

C.W. Hussey gave rise to a series of Memphis Cotton Exchange presidents and a World War II hero, Clarence W. Hussey. The son of prominent merchants, he was awarded a Silver Star as a U.S. Navy lieutenant directing a stricken ammunition ship under attack off Sicily.

Before Cotton Row was emptied out, another principal in the firm, Robert Hussey, helped re-establish the private Memphis University School for college-bound students and endow the chair in religion at MUS.

No date has been set for modernizing the buildings at 104 and 110 S. Front, although work on the property, which contains about 57,000 square feet, could begin later this year or next year, Pohlman said.

Currently there are no plans to single out the AutoZone group that might relocate into the renovated area, Pohlman said, noting the current office spaces are full and busy with workers in the building 24 hours a day, every day of the week.

“This will probably take care of our space needs for the next 10 years,” Pohlman said.

AutoZone oversees a global logistics system that supplies more than 6,000 of its own auto-parts stores and warehouses. The company employs more than 53,000 workers, mainly in Canada, Mexico and the United States, and last year reported profit of $1.2 billion on sales volume of $10.8 billion.