Memphis: residential development spurs commercial development: rough spots remain in Memphis, but the city is one of the success stories of downtown development.(Metro Focus)

The revitalization of downtown areas in the United States typically occurs first with commercial development followed by an upswing in residential development. Not so with Memphis, Tenn. According to U.S. Census figures, the population for the heart of Memphis in 1980 was 2,830. Today, the population is fast approaching 12,000 for downtown--which technically includes Mud Island and the South Main District--while there are around 25,000 residents in the 6.5 square mile area that makes up the central part of the City of Memphis.

In contrast, the suburban Memphis residential market has been down. MultiFamily Executive reported in its March 2004 issue: "... many analysts believe only an improving economy and an upturn in interest rates will improve the suburban score."

Jeff Sanford, president of the Memphis Center City Commission, explains that the draw of the river and visionaries who imagined converting vacant office buildings and cotton warehouses into residential apartments and homes are responsible for the influx of people to the area.

He says he and others believed the downtown dwellers were young and single. But that was before an August 2004 Downtown Market Study determined that 44 percent are 45-years-old and older, and that at least one-third of today's downtown Memphis residents are from other states or countries. Sixty percent of those residents have household incomes of more than $76,000, while 47 percent have incomes of more than $100,000.

Residents hold a variety of jobs, but Memphis' unusually large transportation base employs many, especially at such operations as the Federal Express headquarters. Healthcare is another area of employment growth, with many involved in the biotechnology segment. The area's job count held steady last year at 594,800, but is expected to increase this year, according to Sanford.

Other big employers in Memphis include Auto Zone, First Tennessee, Morgan Keegan Securities and National Bank of Commerce--all of which have headquarters here.

The one complaint new Memphis residents have is that there are not enough retailers downtown. The trick is for commercial developers to play catch up.