Longtime homebuilders land financing for Uptown multifamily project
Published on: November 19, 2019
JACOB STEIMER | MEMPHIS BUSINESS JOURNAL
Brothers Andre and Curtis Jones have been building homes in Memphis for 20 years, but their first multifamily project is just about to get underway.
The Jones brothers recently secured a $2.6 million loan from Financial Federal Bank and pulled $1.4 million in building permits to construct Malone Park Commons — a mixed-use project in Uptown set to contain 35 residences and a couple commercial spaces. They're planning to break ground in late December and be finished by December 2021.
"Everything is secured, and we’re ready to go," Andre Jones said. "It's going to integrate nicely into the neighborhood."
The project site is encompassed by North Main Street, Saffarans Avenue, North Second Street, and Greenlaw Avenue. It's four blocks north of where New York developer Tom Intrator just announced a $1.1 billion development set to include 20-story towers.
"I think [Intrator's project] is amazing. I’m excited to see it come to fruition. It is really ambitious. I hope it works out," Andre Jones said.
The project is set to cost about $3 million, with a $300,000 Center City Development Corp. loan and about $100,000 of the brothers' equity being paired with the Financial Federal loan. Jones purchased most of the land from the Memphis & Shelby County Community Redevelopment Agency (CRA), which had remediated it, for $75,000. He also received the assistance of a 15-year PILOT (payment-in-lieu-of-taxes) from the Center City Revenue Finance Corp. and a pre-development grant from the Memphis Medical District Collaborative (MMDC).
Despite the brothers' lack of experience with multifamily and relatively small amount of equity, Financial Federal felt confident in the loan, given Andre Jones' experience as a contractor and commitment to the neighborhood. The development will surround his home.
"This is in Andre’s backyard, so he’s going to make sure it's done right," said Financial Federal business development officer Shawna Engel. "It will be his neighbors."
Financial Federal CEO Kent Wunderlich acknowledged there is risk in the loan but said he wanted to help Downtown — and a minority-owned firm like the Jones' — grow.
The Memphis Business Journal first reported the project in June 2018. Since then, it has grown from 22 residences to 35 and from $2.1 million to $3.1 million.
The 35 residences will come in the form of single-family cottages, duplexes, and quadplexes, all of which will be rented. They will be small, with all but four falling between 336 square feet and 720 square feet.
"[American] households have been shrinking, but the sizes of our homes have been getting bigger," Jones said last year. "We wanted to offer the product needed for future households versus what was needed in the past [and to] bridge the gap between [Uptown]’s single family homes and Uptown Flats."