Financing has been secured for transformation of high school into Northside Square

By Sophia Surret – Daily Memphian

October 18, 2024

Developers of the $81 million redevelopment of the former Northside High School in Klondike-Smokey City announced on Oct. 17 that they have secured financing for the residential phase of the project.

The mixed-use development at 1212 Vollintine Ave., known as Northside Square, will include 42 affordable housing units.

“We’re focused on this affordable housing population that Memphis needs to serve and do a better job of serving,” said Roshun Austin, president and CEO of The Works Inc., a nonprofit community development organization that will sponsor, own, and operate the project.

The redevelopment of the former Northside High School in Memphis’ oldest Black community aims to help address the city’s high poverty rate, Austin said.

“Forty-two is a drop in the bucket,” Austin said, noting the city needs nearly 40,000 affordable housing units. “But we have opportunities throughout the Klondike neighborhood to provide housing for people so that we’re not displacing those who are here.”

Memphis Mayor Paul Young said the project is an opportunity to bring more affordable housing into the community.

“I want to be clear when I say affordable housing, I mean quality affordable housing units,” Young said. “We want to ensure that our residents in this community have affordable places to live that are also high quality.”

Austin said affordable housing refers to households earning at or below 80% of the median income, about $40,000 annually.

“That’s 24% or more of this city,” Austin said. “Eighty percent or below the median is not about what houses look like; it’s who lives in them.”

ComCap Partners, a minority-owned firm, is the lead developer. Founder and president Archie Willis III, who has worked in Memphis development for 40 years, is leading the effort.

The 42 units, pre-leased in late 2025, will include one- and two-bedroom apartments.

Willis said this approach targets a different segment than the affordable three-bedroom houses being developed as part of the Moving Klondike Forward initiative, which aims to sustain affordable housing in the neighborhood.

“This is by far one of the most impactful projects that we will be involved with,” Willis said. “It’s challenging; it’s difficult; it’s hard to finance.”

“We have to be driven by more than economic benefits,” he added. “It takes intentionality to create affordable housing and ensure the end result is quality, sustainable housing.”

The team closed on commercial financing last fall.

The 270,000-square-foot project is described as the largest private-sector investment in a low-income Black neighborhood in Memphis led by Black developers.

Financing includes New Market Tax Credit equity, conventional debt, $3 million in senior debt from First Horizon Bank through its Community Investment Tax Credit, $2 million in public funds from the City of Memphis’ Affordable Housing Trust, and $48 million in equity from The Works using private philanthropic dollars.

Louis “Bo” Allen Jr., regional president of First Horizon Bank, said the bank aims to support community-focused developments.

“These are going to be 42 brand new, really high-quality units,” Allen said. “We’re thrilled to be a part of that project.”

Aaron Patrick Architects, a local minority-owned firm, designed the residential units, and Grinder Taber Grinder is the general contractor.

Each unit will include a washer and dryer, granite countertops, and other high-quality amenities.

The Health, Educational and Housing Facilities Board of the City of Memphis granted the project a 20-year payment-in-lieu-of-taxes (PILOT) incentive.

Austin noted the building did not generate property taxes when it operated as a school but will do so after redevelopment once the PILOT expires.

The development team plans to attract residents of varying incomes, families, and age groups.

The redevelopment of the nearly 60-year-old building, initially budgeted at $72 million, will also include a two-court gymnasium by Dream Sports, a Memphis Symphony Orchestra space, a performing arts center, a food hall by AR Hospitality, a LifeDoc health clinic, a Moore Tech campus, a Goodwill Excel Center, and a Muggin’s Coffeehouse.

Austin said about 60% of the building is being converted into a “core shell,” meaning it is being stripped down to its structural framework.

The project is expected to be completed by early 2026, with residential and commercial components finishing at the same time.

“It’ll go from empty to hustling and bustling real quick,” Austin said.