Crosstown Concourse has been hailed as one of the city's most complicated projects. With a renovation cost of $200 million, the project's visionaries, contractors, architects and aids speak about how the renovation grew from a Recession-era impossibility to a national gem.
The 1.5 million-square-foot Crosstown Concourse has been in the making ever since Sears & Roebuck Co. shuttered the structure in 1993.
But that redevelopment process wasn’t always a sure thing. In fact, many involved in its redevelopment weren’t ever really sure it would happen. Ahead of the project’s completion in spring 2017, a number of those involved in the process took part in Urban Development Unpacked: Crosstown Concourse, a ULI Memphis presentation, to discuss how the project came together.
“For the first four years the primary question was ‘You want to do what?’” said Tony Pellicciotti, principal with LRK Architects who has been working on the project for the past six and a half years. “We all knew this building was impossible to do. This building was a wreck inside. But it all starts with a big idea.”
And that big idea was a vertical urban village, a term Todd Richardson of Crosstown Arts coined. But what does that mean? It’s one thing to take a tall building and build vertically. But it's the mix of tenants and the possibility for collaboration that make this project stand out from any of Memphis' other historic rehabs.
Richardson said his first conversations about the potential project came in 2009.
“We knew early on it wasn’t enough to put really smart people in a room and come up with a vision and implement it,” he said. “It couldn’t be a top-down approach.”
Crosstown Arts formed in 2010 with a mission to cultivate the arts and music in Memphis through efforts based in the Crosstown neighborhood.
“In 2010, if I asked people where’s Crosstown, not many could say,” Richardson said. “Since Sears left Crosstown the neighborhood fell off the mental map. This was about renovating a building but also building a community. It’s reminding people this neighborhood is here and get them here again.”
And getting people to Crosstown again will clearly happen with an estimated 3,000 people coming and going in Crosstown Concourse every day, whether it’s in the 265 residential apartments or the retail and office components spread throughout the building.
Getting to that point has been a trial with Crosstown Concourse regarded as one of Memphis' most financially complicated projects.
Gil Uhlhorn, a member of Bass, Berry & Sims PLC who deals primarily with commercial real estate clients, recalls the early days of that process.
It was May 2, 2007, when he received the first email about the project.
It was March 22, 2012, when he participated in the first meeting with the Crosstown development team to discuss the project’s structure.
One big day in the project’s life came Dec. 29, 2014, less than 60 hours before the drop-dead moment for investors, and the moment that would signal that the bidding process would start anew.
But it was that day at 3:25 p.m. that the financing closed and the project quickly moved ahead.
Brett Grinder, vice president of Grinder, Taber & Grinder Inc., said he spent New Year’s Eve signing contracts so his team could get in immediately after the New Year’s Day holiday to get to work. Within months crews onsite went from 100 workers a day to 700.
Richardson joked that ignorance is bliss when asked how Crosstown Concourse was able to happen. He made it clear back in 2010 that he was happy as an art history professor, and wasn’t planning to spend the next five years trying to convince people of what they don’t think they need.
“We knew when we started this would never happen,” Richardson said. “We gave ourselves a two percent chance. Plus it was the middle of a recession.”
Redeveloping a massive structure in the middle of a recession would require thinking outside the box, he added.
“We couldn’t require a 400,000-square-foot tenant in 2010 to come here, nor did we want to,” Richardson said. “Instead of thinking about a space to be filled, let’s think about a neighborhood. What makes a great neighborhood? Food and retail, but also health care, education and green space.”
And instead of spreading horizontally this project would be stacked vertically, and a massive team would be onsite doing that work simultaneously.
Imagine hundreds of subcontractors onsite all moving toward one goal. Technology made it all impossible with a cloud-based site that enabled anyone on the project to simply pull up what they needed.
Grinder said a drone has made daily inspections more precise.
“You can inspect every single mortar and joint,” he said. “Inside the building you have the atria so we fly the drone up and down to get up close.”
High-definition photography shot from a plane flying overhead is delivered to the team on a monthly basis, which keeps tenants and the public aware of the project’s progress.
The Crosstown Concourse project is much more than just the iconic Crosstown building. The real estate of the property covers 16 acres across seven tax parcels, including the purchase of a U.S. Housing and Urban Development-financed property on the north side. There also is a railroad bridge over North Parkway and an abandoned pre-Civil War railroad easement that falls under the project's jurisdiction.
But those original property purchases only signaled the complexity to come. Multiple agreements with contractors have been negotiated and nearly 30 leases signed for the office, retail and multifamily projects. There is some 625,000 square feet under lease, and that doesn’t include the residential leases.
“When you look at a project this size it’s overwhelming, so you have to break it down into specific segments,” Uhlhorn said about the legal standpoint of Crosstown Concourse.
Just in his firm’s office there were individuals working separately on leases, title and bank loan documents.
The total project costs of $191 million has a variety of capital sources, everything from an $8.2 million city loan and bank loans totaling $80.5 million to nonprofit loans of $12.5 million and investor capital of $31.7 million.
The design team had its own challenges, starting with the fact there were 106 primary members.
“That’s 106 cats you’re herding,” Pellicciotti said. “How do we keep all these people focused? From Vancouver, San Francisco, New Orleans, Toronto, New York and Princeton; from the development side we all knew it couldn’t be done, which is why it’s great to be here today.”
In fact, Pellicciotti said the team had to convince the design software company Autodesk to roll out new software to make it all possible for architects and contractors to work together.
“What if more people pick the same door to move at the same time,” Pellicciotti said. “We taught software creators how to make it happen...Architects and contractors don’t like to play well together. So the big idea on our end is let’s break that mold and work together. We understand that working together we can do more.”
The project had many challenges but the integrity of the building didn't need to be revisited. The building is designed five times the strength of modern office buildings. Pellicciotti said that a structural engineer, after examining the building exclaimed, “If there’s an earthquake that’s the building I’m running to.”
The team has LEED design aspirations. One important point in getting there is that the building is already much more energy efficient than the LEED baseline, helped by its large concrete mass that retains heat in the winter and stays cooler in the summer.
The finances, the renovations and the technology have all come into play to prepare Crosstown Concourse for the final piece: its inhabitants.
"A building is where people work, live or shop. But design is where people are. This place, the priority is that everything is designed for people to interact," Richardson said.
"What a shame to just come and co-locate. You can do that in any strip center in Memphis. Everything is designed to be more than a pass-through space and take advantage of this expertise in arts and health care in one building.”
When it’s fully up and running – tenants will move in in the early months of 2017 and a grand opening is tentatively planned for May – Crosstown Concourse will be owned by a nonprofit entity run by a nine-person board of directors and management handled by Cushman & Wakefield/Commercial Advisors and LEDIC Management Group.
A measurement the building’s success won't come when the empty spaces are finally filled with commercial, office and residential occupants. It’s much later.
“Success isn’t groundbreaking or opening day. It’s 10 years from now when people are still there and it has the right kind of impact,” Richardson said. “At the end of the day we hope this is a catalyst for this area of the city and the city as a whole.”