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2022 was an eventful year in the Memphis business world.
Construction work started at BlueOval City, Ford’s electric vehicle and battery plant, and wrapped up on the Hyatt Caption, the first of the brand anywhere in the world. First Horizon bank announced it would be acquired, and FedEx saw some big changes. Plans were revealed for the potential transformation of a vacant skyscraper, while plans for a luxury hotel tower were scrapped.
Here’s a recap of some of the biggest business moments of the year.
Plans for 100 N. Main redevelopment revealed
In January, the Downtown Memphis Commission tapped 100 N. Main Development Partners, a team led by Kevin Woods, to redevelop Memphis’ tallest building, which has sat vacant for years. The team, which also includes Billy Orgel, Jay Lindy, Adam Slovis and Michael McLaughlin, beat out 11 others for the chance to breathe new life into the blighted tower.
Originally, the development team and the DMC had hoped to have a development agreement signed over the summer after a six-month due diligence period. However, materials shortages and inflation have driven the cost of development up and stretched the timeline for work to begin.
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The project is slated to include apartments, a hotel, office space, restaurants, retail and rooftop amenities. New infill construction at the south end of the site would include additional apartments and retail space.
Last month, the developers said they originally anticipated the entire project would cost $267 million. Now, they’re estimating the first phase alone to cost $261 million. However, Woods said they remained committed to the project and a DMC board gave the OK for the development team to start some demolition work, even though no development agreement has been signed and they have not yet acquired the building from the Downtown Mobility Authority.
Loews Hotel falls through
In February, city officials confirmed New York-based Loews would not be moving forward with plans to build a 20-story tower in Downtown Memphis. The luxury hotel, which would have been built at Civic Center Plaza, was meant to serve the nearby Renasant Convention Center. The plans had been the subject of lawsuits, as well.
The hotel company cited changes in the hospitality industry during COVID-19 as a factor in its decision to pull the plug on the project, but didn’t close the door on future development in Memphis.
“Our hope is the future will allow us to look at new transactions in Memphis, although the timeline is undefined,” Alex Tisch, Loews president, said in a statement at the time.
TD Bank announces agreement to acquire Memphis-based First Horizon
Toronto-Dominion Bank Group plans to finalize the acquisition of First Horizon Corp. in a $13.4 billion deal in the company’s first quarter of 2023, which is between November and January, according to TD.
TD’s pending deal for First Horizon means Memphis is set to lose the last of its once three headquartered prominent banks following the previous departures of Union Planters and National Bank of Commerce.
The deal was announced in February, First Horizon shareholders voted to approve the agreement in May. TD Bank is awaiting full regulatory approval on the deal, according to an update from them in November.
TD sought to acquire First Horizon to significantly expand its U.S. Southeast presence and plans to make Memphis a “regional hub” as part of the agreement, according to TD.
FedEx news:From package handler to executive: Shannon Brown says farewell to FedEx after 44 years
Memphis business news:Gwyn Fisher to lead economic development at Greater Memphis Chamber
Construction begins on Ford’s BlueOval City in Haywood County
In September construction began on BlueOval City in Stanton, almost one year after Michigan auto giant Ford Motor Co. and South Korean company SK On announced plans to invest $5.6 billion in an electric truck and battery plant campus.
The number of onsite construction workers on site continually ramped up throughout 2022 with steel now erected at the Electric Vehicle Center and BlueOval SK battery plant about 40 miles from Memphis. BlueOval City’s construction peak is anticipated for summer 2023 with an expected 6,000 construction workers on site each day.
Ford and SK plan to create 5,800 jobs at BlueOval City with West Tennessee elected officials and community members excited about what it could mean for the region’s long-term fortunes once production is scheduled to begin in 2025.
Steps forward, back for One Beale
The Caption by Hyatt hotel opened at One Beale in June, the first Caption to open anywhere in the world. The opening of the second Hyatt-brand hotel at the campus was met with a great deal of fanfare but came amid increasingly terse negotiations between developer Chance Carlisle and city officials over public incentives for the planned third hotel, the Grand Hyatt.
At the Caption’s opening party, Carlisle said that without further public subsidy, the hotel wouldn’t move forward and he might not invest further in Memphis. This fall, the city agreed to give $10 million to the project.
However, it proved not to be enough. In November, Carlisle said the hotel won’t move forward, due to a $5 million financing gap.
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Downtown Memphis hotels:Dream Hotel to move forward, now with apartments
Tough end to the year for FedEx
FedEx started the year strong, having taken advantage of the e-commerce boom brought on by the pandemic. In June, founder Fred Smith stepped down as CEO, handing the reins to Raj Subramaniam, who expressed a positive outlook for the company.
However, things changed in September when FedEx released the news that they undershot financial analysts’ expectations by a wide margin in the first quarter of the new fiscal year. With earnings falling short and operating costs at a high from inflation, the logistics giant announced a plan to aggressively reduce spending, making cuts to nearly every area of the organization, from FedEx Express daily flights to FedEx Ground sort facilities.
The news sent the market into a panic, causing FedEx stock to plummet nearly 20% in one day. Though the company cited the global economic downturn and inflation as the cause of its disappointing results, analysts were left asking whether executive leadership choices could also be to blame.
Memphis-area housing market normalizes after COVID-19 pandemic
After years of being classified as a seller’s market, the Memphis area housing market’s ongoing transition to a normal market became an important talking point for Realtors and potential homebuyers alike.
Inventory still remains lower than at previous points in the past decade, the number is currently 3,106 through November 2022. That’s highest figure in two years, according to data from the Memphis Area Association of Realtors.
That has helped create a less hectic and competitive market with median sales prices of Memphis-area homes also not rising as fast as during the COVID-19 pandemic. The number of homes sold in the area has also dropped from 2021 (20,484 through November) to 2022 (18,612), another sign of the changing market.
Niki Scheinberg contributed to this report.
Corinne Kennedy covers economic development, real estate and healthcare for The Commercial Appeal. She can be reached via email at Corinne.Kennedy@CommercialAppeal.com
Omer Yusuf covers the Ford project in Haywood County, residential real estate and tourism for The Commercial Appeal. He can be reached via email Omer.Yusuf@commercialappeal.com or followed on Twitter @OmerAYusuf.
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