Ambassador Hotel gets PILOT approval

Ambassador Hotel | PKM Architects

Originally, Ed Cabigao wasn't going to buy the Ambassador Hotel.

A Nashville group, GEM Investments LLC, was going to do so and Cabigao was going to move his restaurant, South of Beale, into the building. But, when the Nashville deal fell through, he couldn't pass on the chance to own the former Ambassador.

“Ambitions have changed slightly,” Cabigao said. “I'm still passionate about South of Beale and the restaurant business, but I'm also passionate about helping the city move forward and providing it with a better streetscape.”

Now that his PILOT request for the property has been approved, his passion can be put to work.

On Sept. 10, the Downtown Memphis Commission (DMC) approved a 15-year PILOT (payment-in-lieu-of-taxes) for the 15,000-square-foot building.

The renovation will cost about $2.5 million and rejuvenate the 1915 structure, which has suffered from blight, roof failure, and water damage over the past few decades.

Historic photo of the Ambassador Hotel building | Center City Development Corp.

Cabigao will move his popular Main Street restaurant, South of Beale, into the first floor, and develop 10 apartments above it.

South of Beale has outgrown its current building, and limited space currently forces Cabigao to turn down three events a week. But, its newest incarnation will have 5,000 square feet — enough for a larger kitchen and rooms for private events.

“We're going to fill that 5,000 feet,” he said. “Having that kind of revenue is going to help the business. If we didn't have that, it wouldn't be worth it.”

Design-wise, the renovations will maintain the integrity of the original hotel, which, located near the railroad station, housed thousands throughout the early and mid-twentieth century.

“The focus is to utilize the existing structure and bring it back in a historic way,” said Austin Magruder, the building's architect and project planner. “We're going to bring back the iconic sign that was on the building.”

The apartments are going to have exposed brick, stucco walls, and wood flooring.

Hotel Interior | PKM Architects

Improving the Ambassador Hotel's blighted condition has been a DMC priority for two years. According to Brett Roler, the group's vice president of planning and development, the building wasn't structurally sound.

“This building was in dangerous condition,” he said. “It could have conceivably failed and been a major safety issue within the neighborhood.”

Concerned about the state of the building, the DMC tried to convince the previous owner to stabilize the space through development incentives. But, they weren't enough.

“We offered incentives proactively,” Roler said. “But, we couldn't get them to the table with us.”

As a last resort, the DMC took the owner to environmental court, where the building was declared a nuisance. Due to that, the owner was required to provide emergency stabilization to the building and, soon afterwards, he sold it.

Now, with the PILOT approved, renovations on the Ambassador Hotel are expected to begin soon. Cabigao hopes to have South of Beale moved to the new location by May, with the apartments ready a few months after that.

For Roler, it's another victory in a quest to grow Downtown Memphis while keeping it unique.

“We prefer historic preservation and adaptive reuse because it helps us develop Downtown Memphis in a way that embraces and leverages an authentic character and sense of place,” he said. “We're not building a Downtown that looks like any place U.S.A. We're building a Downtown that looks and feels authentically like Memphis.”

Credit: John Klyce – Reporter, Memphis Business Journal