Center City Development Corporation Board Meeting To: Center City Development Corporation (CCDC) From: DMC Staff Date: February 21, 2018 RE: Development Loan Application 11 W. Huling Ave. The enclosed Development Loan application has been submitted for consideration at the February 21, 2018, CCDC Board Meeting. Project: Applicant: 11 W. Huling Ave. Huling Properties, LLC Doug Carpenter, Project Principal 11 W. Huling Ave. Memphis, TN 38103 Applicant s Request: Development Loan in the amount of $100,000. Project Description: The subject property is located at the southwest corner of W. Huling Avenue and Wagner. The 11,000 sf building was constructed in 1917 as a warehouse for the National Biscuit Company. The main section of the building, approximately 8,800 sf, is now being used as office space. The building interior will be renovated to serve as the home of DCA, a creative communications consulting agency. Renovation work funded by the CCDC Development Loan will include roof repairs, brickwork and tuck-pointing, window and door repair, new interior walls and other permanent tenant improvements. Parking on site is located in a fenced surface lot to the rear of the building. A smaller section of the building, approximately 2,200 sf, is located along Wagner and originally served as the carriage house for horse-drawn delivery vehicles. The former carriage house will be used as a short-term rental apartment. In addition to this Development Loan, the applicant is concurrently requesting an Exterior Improvement Grant (EIG) from the CCDC in an amount up to $44,941. The scope of work for the EIG will include exterior renovations only and will not overlap the Development Loan scope of work. Page 1 of 4
The following budget describes the overall financial structure of the project, including both the Development Loan and the Exterior Improvement Grant scopes of work. Sources: CCDC Development Loan $100,000 CCDC Exterior Improvement Grant $44,941 Applicant funding $48,849 Total Sources: $193,790 Uses: Interior renovation (Dev. Loan Scope) $103,908 Exterior improvements (EIG Scope) $89,882 Total Uses $193,790 The applicant currently owns the subject property. Construction is scheduled to begin in Q1. 2018 and be completed in Q2. 2018. Dev. Loan Budget: The Development Loan can be used for building renovations, site improvements, and new construction. Building system improvements, permanent equipment, and first floor, non-residential tenant improvements that are permanent in nature are also eligible uses. Removable fixtures and equipment and soft costs are not eligible expenses under the program. The CCDC Development Loan is permanent financing at an interest rate of 3%. While the loan has a 10-year term, the amortization schedule is based on a 20-year period in order to offer the applicant lower monthly payments. The following budget describes the proposed scope of work for the Development Loan: Uses: Refinish floors on first level $4,850 Door & window $17,075 Window weatherization $1,700 Interior Painting and Trim Work $16,918 Insulation $437 Electrical $3,780 Interior framing, labor, and cleaning $14,923 Clearing/grading $5,075 Brickwork & tuck pointing $850 Roof repair $5,600 Page 2 of 4
Construction contingency $10,000 Contractor fees and overhead $22,700 Total Project Cost $103,908 Sources: Owner Contribution $3,908 CCDC Loan $100,000 Total Sources $103,908 Design Review: Project Scoring: Design Review Board (DRB) review and approval is required for this project and will likely be requested in Q1 2018. The Development Loan program currently has a maximum loan amount of $150,000. Per the Development Loan project evaluation and scoring criteria described below, the project grades for a maximum loan of $100,000. Development Loan Evaluation and Scoring Criteria: Basic Qualifications: Primary Use Office (below 15,000 sf) $10,000 Eligible Improvements (less than $500k) $10,000 Historic Property Renovation NR District $15,000 CCDC Priorities: Located within NR District $40,000 Ground-floor tenant secured $15,000 Financial program Risk & Investment $5,000 Enhanced Architectural Lighting $5,000 Total $100,000 EBO Program: Any project that is awarded a financial incentive from the DMC must comply with the Equal Businesses Opportunity (EBO) Program. The EBO program requires that the applicant make a best faith effort to reach no less than 20% participation by women and minority-owned businesses (M/WBE) for the portion of the project scope that is eligible for bidding or subcontracting. The portion of a project subject to meeting the EBO requirements typically involves the hard and soft costs for design & construction. According to the estimated budget, a 20% level of M/WBE inclusion for the hard and soft costs related to design and construction would be approximately $21,557. Page 3 of 4
Staff Evaluation: The DMC s Strategic Plan encourages facilitating and accelerating real estate development, incentivizing Downtown development when necessary to increase investment and economic development, and fighting blight to improve the visual appearance of the built environment Downtown. DMC staff is highly supportive of this project for several reasons. First, the full renovation of existing buildings is an important goal of the CCDC and the Downtown Memphis Commission (DMC). Second, the project is situated in the heart of the South Main neighborhood, an area of continued focus for the DMC and its affiliated Boards. Staff is supportive of this project and believes that the proposed development will only strengthen the momentum created by the over $100 Million in investment that is currently planned or underway in the South Main District. Finally, approving a Development Loan for this project actively supports a local company, DCA, in their efforts to invest in permanent office space in Downtown Memphis. Recruiting and retaining Downtown office users, especially creative firms, is a top goal for the DMC and its affiliate Boards. Recommendation: Staff recommends approval of a Development Loan in an amount up to $100,000, based on approved receipts and subject to all standard closing requirements and conditions. Page 4 of 4
2.7.18 / HULING PROPERTIES, LLC DEVELOPMENT LOAN APPLICATION SUBMITTED TO: Downtown Memphis Commission Center City Development Corporation Board (CCDC) 114 North Main Street Memphis, TENNESSEE 38103 PREPARED FOR: HULING PROPERTIES, LLC 11 W. HULING AVENUE MEMPHIS, TENNESSEE 38103 PREPARED BY: DCA CREaTIVE COMMUNICATIONS CONSULTING DCAMEMPHIS.COM 901.372.5100
a building of such pleasing architectural quality and dignity as would not only be a source of pride to its directors, stockholders and employees, but would, in a measure, express to the public the purpose and ideals of the Company. W.F. WILMOTH, 1912 DEVELOPMENT LOAN APPLICATION TABLE OF CONTENTS APPLICANT BACKGROUND PROPOSED PROJECT SITE CONTROL FINANCIAL ITEMS PROJECT TIMELINE PROJECT TEAM CREDIT REFERENCES DISCLOSURES APPLICANT AFFIRMATION Equal Business Opportunity Program
I. Applicant Background PROJECT PRINCIPAL Doug Carpenter HOME ADDRESS 1583 Goodbar Ave. Memphis, TN 38104 901.488.3493 OFFICE/PROPERTY ADDRESS Huling Properties, LLC 11 W. Huling Ave. Memphis, TN 38103 901.372.5100 While not a property developer by trade, Doug Carpenter and DCA have been involved in a number of major civic development projects including Crosstown, Tennessee Brewery, and Big River Crossing, as well as consumer-focused developments like Loflin Yard and the reshaping of Humphrey s Prime Cut Shoppe. 1
II. Proposed Project This application is submitted for Huling Properties, LLC at 11 W. Huling, Memphis, TN 38103, by Doug Carpenter, owner and primary tenant, for improvements made to this property. As the owner and principal of creative communications consulting agency DCA, Doug has played a significant role in numerous projects that updated and elevated the Memphis landscape. These will be a combination of paid rentals and donations to community-based groups to help other organizations build their local investment. The building also features a residential area that will be used as rental accommodations, creating additional income for the building and adding to the city s hospitality revenue. The office building is 8800 square feet; the residence is an additional 2200 square feet. Both are situated on a half-acre property adjacent to Downtown rail and trolley lines. The building was constructed in 1917 as a warehouse for the National Biscuit Company better known today as Nabisco. The area now used as the residence was the carriage house for the horse-drawn delivery vehicles that brought the innovation of wax-wrapped crackers to retailers throughout Memphis, replacing the damp, stale edibles previously kept in open barrels. Now that he is the owner of a historic Downtown property, he hopes to apply that passion and experience to transform this former warehouse into a space that adds value to the entire community. The building will not only serve as DCA s headquarters, but also open its doors for public and private events that mirror the agency s mission to advance Memphis. American architect and sustainability expert Carl Elefante stated, The greenest building is the one that is already built. The adaptive reuse of this 100-year-old warehouse preserves a stable, well-constructed structure in the heart of Downtown while adding improvements that will increase its efficiency and sustainability. This upgrade will also add to the economic health of DCA, the primary tenant of the building, by providing a space that builds confidence in potential clients and allows the expansion of the agency to meet growing needs. We will also be able to provide office space for micro-businesses, entrepreneurs, and small non-profits needing a flexible work area to grow their enterprises. In addition to office rental, 11 W. Huling will host both public and private community events. We anticipate presenting 10-15 events in 2018 and expanding in the years afterward. During the second World War, the building was used as a boat manufacturer for the U.S. Army; when needs changed after the war, it became a warehouse for United Liquors. In the last half of the 20th century, it changed owners and identities several times, from a printing company to a photography studio to an architecture firm. Doug Carpenter purchased the South Bluff Warehouse District building in 2017 with the intent of carrying on its creative spirit. For the purposes of event rental, the target market is groups who share DCA s commitment to building community and promoting creativity and innovation in Memphis. Non-profits, educational institutions, arts and technology organizations, placemakers, and any other groups focused on expanding our horizons will be welcomed. As a marketing firm, we are highly qualified to reach our targets and will apply our professional experience and resources such as social media, public relations, and web development to share our story. We will also have AirBnB s vast network available to reach Memphis tourists and staycationers. 2
II. Proposed Project (cont.) Having recently ended a long-term lease at another Downtown office, Doug bought 11 W. Huling with the awareness that it would allow DCA to grow its staff to meet greater client demands. Our success not only bolsters our own ability to employ Memphians but also improves the staffing prospects of our clients. The building has the potential to incubate small businesses through the use of co-working space and provides an employment resource for photographers, event planners, musicians, and other entrepreneurs who would benefit from access to our resources. When it was constructed in 1917, 11 W. Huling reflected more than the basic needs of storing goods. Rather than creating something standard and expected, the architects were given a directive to design a building of such pleasing architectural quality and dignity as would not only be a source of pride to its directors, stockholders, and employees, but would, in a measure, express to the public the purpose and ideals of the Company. As the owners to take this building into its second century, we want to guarantee that the building continues to express the ideals of the business inside, including an appreciation of aesthetics, a spirit of collaboration, and a commitment to innovation. 3
NOT IN SCOPE DEMOLISH EXISTING - TYP NEW OPENING FOR 36"X84" DOOR 1 DEMO PLAN 1/8" = 1'-0" DEMOLITION NOTES: 1. VERIFY LOCATION OF ALL STRUCTURAL ELEMENTS PRIOR TO DEMOLITION. 2. BEAD BOARD SIDING TO BE SALVAGED AND STORED IN GARAGE AREA FOR LATER USE 4
1 DEMO PLAN 1/8" = 1'-0" DEMOLITION NOTES: 1. VERIFY LOCATION OF ALL STRUCTURAL ELEMENTS PRIOR TO DEMOLITION. 2. BEAD BOARD SIDING TO BE SALVAGED AND STORED IN GARAGE AREA FOR LATER USE NOT IN SCOPE NEW BUILT IN WORK STATIONS. VERIFY LOCATION WITH OWNER - TYP EQ EQ +/- 12' - 9" DEMOLISH EXISTING - TYP LOCKERS 18' - 0" LARGE CONF. 5' - 0" DEDICATED DESKS FRAMING ELEVATION 3 A0.2 03 103 +/- 15' - 6" PRIVATE OFFICE 4' - 6" 4' - 6" WORK TOP 15' - 0" 4' - 0" EXISTING STAIR 101 102 103 Mar 9' - 6" 4' - 7" 14' - 8" 102 FRAMING ELEVATION 2 02 A0.2 FRAMING 04ELEVATION 4 A0.2 NEW PARTITION WALLS. REFER TO FRAMING ELEVATIONS - TYP. RECEPTION NEW OPENING FOR 36"X84" DOOR FRAMING 01ELEVATION A0.2 REMOVE EXISTING PANELING MEZZANINE FRAMING ELEVATION 5 05 A0.2 NEW ROLL AWAY BENCH/HIGH TOP SEATING DICATED DESKS NEW BUILT IN WORK STATIONS. VERIFY LOCATION WITH OWNER - TYP FRAMING ELEVATION 3 A0.2 03 103 2 +/- 15' - 6" +/- 12' - 9" FLOOR PLAN 1/8" = 1'-0" PRIVATE OFFICE 4' - 6" 4' - 6" ENTRANCE WORK TOP 15' - 0" NEW WINDOWS TO MATCH EXISTING - TYP 4' - 0" 3' - 0" WORK STATIONS NEW BUILT IN BAR TOP SEATING. 101 DATA SMALL CONF. NEW FLOOR TO EXTEND TO EXTERIOR WALL, MATCH EXISTING - TYP. EXISTING STAIR NEW LOW WALL WITH SHELVING CREATIVES SUITE DOOR SCHEDULE Mark Height Width Phase Created 101 7' - 0" 3' - 0" New Construction 102 7' - 8" 3' - 0" New Construction 103 7' - 8" 3' - 0" New Construction 5 FRAMING 04ELEVATION 4 NEW PARTITION WALLS. REFER
ALIGN NEW WINDOWS AND TRIM WITH EXISTING - TYP WOOD FRAME FIXED WINDOWS TO MATCH EXISTING RECLAIMED BEAD BOARD SIDING NEW WINDOWS MATCH EXISTING - TYP LIGHT OPEN OPEN RAISED PANEL TO ALIGN WITH WINDOW SASH - TYP 01 FRAMING ELEVATION 3/8" = 1'-0" 02 FRAMING ELEVATION 3/8" = 1'-0" NEW WINDOWS MATCH EXIST - TYP LINE OF STRUCTURE LINE OF STRUCTURE NEW WINDOWS MATCH EXISTING - TYP RAISED PANEL TO ALIGN WITH WINDOW SASH - TYP FRAMING ELEVATION 03 3/8" = 1'-0" LIGHT RECLAIMED BEADBOARD RAISED PANEL TO ALIGN WITH WINDOW SASH - TYP FRAMING ELEVATION 04 3/8" = 1'-0" 05 FRAMING ELEVATION 3/8" = 1'-0" NEW RECESSED FLUSH BUILT IN BOOK AND DISPLAY SHELVING OPEN SHELVING AT CORNER 6
D E V E L O P M E N T L O A N A P P L I C AT I O N P R E PA R E D B Y D C A CURRENT 7
PROPOSED 8
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3. Site Control Estimated Costs & Bids Doug Carpenter owns 11 W. Huling Ave., after he purchased the building in 2017. 4. Financial Items Financial Information Provided Upon Request. sources of funds: OWNER CONTRIBUTION $3,908 CCDC LOAN $100,000 TOTAL $103,908 REFINISH Floor $4,850 DOORS & WINDOWS $17,075 WINDOWS WEATHERIZATION $1,700 PAINT $5,718 INTERIOR TRIM LABOR $10,325 INTERIOR TRIM MATERIALS $875 INSULATION $437 ELECTRICAL $3,780 FRAMING MatERIALS $2,975 FRAMING LABOR $7,750 DUST WALL/GENERAL LABOR $2,470 FINAL CLEANING $1,728 CLEARING/GRADING $5,075 BRickwork/tuck pointing $850 RooFINg $5,600 MISC. (contingency) $10,oo0 OVERHEAD $9,100 CONTRACTOR FEES $13,600 TOTAL $103,908 *Competitive estimates were collected from additional vendors. 10
5. Project Timeline Project will start at the end of the 1st quarter 2018 and will be completed in 2nd quarter 2018. 9. Applicant Affirmation This application is made in order to induce the Memphis Center City Development Corporation 6. Project Team Counsel for the applicant: N/A Architects and engineers: Austin Magruder Contractor for project: Octavius Nickson, Nickson General Contractors Other professionals: Doug Carpenter / DCA 7. Credit References Available upon request. (CCDC) to grant financial incentives to the applicant. The applicant hereby represents that all statements contained herein are true and correct. All information materially significant to the CCDC in its consideration of the application is included. The applicant expressly consents to the CCDC s investigation of its credit in connection with this application. The applicant acknowledges that it has reviewed the descriptions of the CCDC financial program for which it is applying and agrees to comply with those policies. The applicant shall also be required to show a good faith effort with regard to the employment of minority contractors. The applicant specifically agrees to pay all reasonable costs, fees and expenses incurred by the CCDC whether or not the incentive is granted or project completed. 8. Disclosures The applicant, guarantor, or any other principals involved with the project have never been charged or convicted of any felony or currently is under indictment. The applicant has never filed for bankruptcy. Doug Carpenter, Principal, DCA 10. Equal Business Opportunity (EBO) Program DCA is dedicated to representing Memphis and working with partners who reflect the ideals, ethics, and demographics of our city. Nickson General Contractors is a minority-owned business that has completed projects in retail, restaurant, non-profit, and healthcare settings and will complete a majority of the project scope. 11