Photo by Jim Weber // Buy this photo

Homeless people are common around the boarded-up apartments along Jefferson near Watkins, part of a 28-acre tract that Florida-based WSG Development planned to convert to mixed retail and residential before it went into foreclosure this year.

Candice Hawkinson is stuck with an urban wasteland just beyond her doorstep in the southwest corner of Evergreen Historic District.

Until a nice development comes along, Hawkinson and other Midtown boosters believe a 28-acre expanse of green may be the best they can do.

Photo by Jim Weber
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Artists make a statement in the fenced rubble and derelict apartments of a 28-acre tract that Florida-based WSG Development planned to convert to mixed retail and residential before it went into foreclosure this year. Though the site was scheduled to be demolished, the fenced-off area has turned into a pocket of poverty and crime.

Instead, the site targeted for a major mixed-use project is a jumble of vacant, rundown homes and apartments, mostly boarded up and fenced off, punctuated by piles of debris.

“That is a travesty,” said Hawkinson. “It’s appalling. You’ve got 80 parcels that are now for all intents and purposes vacant houses. You’ve got the transient areas. The homeless, vagrants, drug dealers, prostitutes — they’re moving in.”

But who will clear the land near Poplar and Cleveland is unclear now that a would-be developer faces foreclosure on a 2007 loan for the project.

Hawkinson and others are awaiting a scheduled auction April 19 to see what might be next for a project that once promised a mixed-use development perhaps anchored by a Target store.

Lehman Brothers Holdings, itself under bankruptcy protection, initiated the foreclosure proceeding against WSG Memphis, a unit of WSG Development of Miami. The developer took out a $14 million construction loan for the $180 million project three years ago.

While observers believe WSG was for real and Target was keenly interested, the project fell victim to the collapse of commercial real estate and drying up of credit associated when the recession deepened in 2008.

“It was strictly the economy,” said Danny Buring, managing partner of the Shopping Center Group Memphis. “I can show you hundreds of developments like this around the country that were crushed by the economy.”

Buring believes there’s a definite need in Midtown for such a development. Without faulting WSG’s plan, he said the site was competing with Overton Square and the Mid-South Fairgrounds for a big-box retailer like Target that probably would only need one store in Midtown. “Target really liked that site, but they also liked the Fairgrounds.”

Buring said foreclosure isn’t necessarily a sign the Memphis project was unworkable. It could have more to do with WSG developments elsewhere.

Commercial real estate agent James Rasberry said Midtown essentially has multiple big-box sites competing for a single prize, which puts a tenant like Target in the driver’s seat.

“Do I think anything’s going to happen down there? I don’t see it in the short term. I think we’re fighting over the same few retail tenants.” However, he added, “I think that whatever happens, that property will be forced now to be cleaned up.”

WSG’s project manager didn’t return multiple phone calls seeking comment, and a Lehman Brothers contact person wasn’t available.

City Councilman Jim Strickland, whose district includes about half the site, said he met about a month ago with someone who was looking at moving forward on the project. “They’re interested in developing, and I set them up to meet with some developers.” He wouldn’t identify the principal developer.

Strickland said WSG was in the wrong place at the wrong time. “They spent all that time. They got all those parcels together. And then the recession hit. It was very unfortunate timing.”

Robert Lipscomb, director of Housing and Community Development, said city government stands ready to assist with measures such as a tax increment financing district, which could direct retail revenues into infrastructure.

“Whoever is the surviving entity, I’ll work with them,” Lipscomb said. “That area is so important, it’s just critical. We’d like to see the area cleaned up, because it’s pretty blighted over there.”

For now, Midtowners would like to see the blight removed.

Evergreen Historic District Association president Chris Morton called the foreclosure “very unfortunate, but I had a feeling it was coming. The development would have been great for Midtown. We have had real concerns about the boarded-up, vacant properties. We prefer it bulldozed at the earliest possible time.”

Joe Spake, a Midtown resident and residential real estate agent, said the area has long been a pocket of blight, but it has gotten worse. “The vandals have taken the architectural features off the houses. It really is like ‘Fort Apache the Bronx.’ But you never see many people there. I don’t think even the gangs want it.”

Spake added, “I’m not a commercial guy, but it might be more marketable if it was just a green hunk of land, rather than the ruin it is now.”

Hawkinson has watched the project unfold and spoke for it before it won City Council approval in 2008. She’ll attend the auction in search of clues to what’s next.

“I would like to see the city partner up with some, I use the term ‘developer.’ Find some money people, and at least demolish these empty homes. This has got to be razed. Somebody put up a big wire fence. That fence has not only been torn down, it has been rolled up and hauled away.”

–Wayne Risher: 529-2874

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