BILL DRIES - The Daily News -

Most who drive by the vacant parking garage at Madison Avenue and Pauline Street aren’t even aware there are motel rooms atop the garage.

This week, the building at 969 Madison Ave. got a bit closer to a new life with a $2 million grant from the U.S. Department of Housing and Urban Development (HUD) and loan assistance to bring back the motel and parking garage.

It’s owned by the Memphis Bioworks Foundation, whose offices are a block away on Dudley.

“We’ve been trying to wrestle with redeveloping it back into a hotel or, worst case, having to tear it down,” said Bioworks executive director Dr. Steven J. Bares. “Having done demolition, I’d really rather redevelop it.”

So Bioworks has been working with a hotel developer and has “made a lot of progress on some options,” Bares said. They are talking to several hotel brands.

Bares said the decision to keep the hotel was an easy one, given the area.

“Remember you have to really look at that hotel in the context of the whole medical center,” he said.

“The medical center doesn’t have a good long-term-stay hotel anywhere. So having a hotel adjacent to UT and so close to Methodist Hospital and MERI and approximate to what we’re doing would be a real asset to the community.”

The HUD grant and the upcoming federal loan application is described by Bares as a critical step in bringing new life to a building long vacant even when nearby Baptist Memorial Hospital was still standing.

The building opened in 1968, according to Assessor’s office records, and was a Holiday Inn at one point.

“It’s really going to be an anchor for that whole area,” said city Housing and Community Development director Robert Lipscomb.

The grant comes through the federal Brownfields Economic Development Initiative (BEDI), which targets abandoned or vacant buildings that have some kind of environmental contamination. The money is used for the cleanup as well as the revitalization of the structure.

Lipscomb said because of the age of the building, there is probably some asbestos that needs to be removed.

The HUD funding means the city of Memphis will seek an additional $4 million loan for the project on the southwest corner of Madison and Pauline.

The motel and parking garage renovation is a $33.8 million project.

“They have a gap in financing the hotel and there’s still a gap. So, what we’re going to do is also borrow $4 million,” Lipscomb said.

The money will be borrowed through what is called a “108 loan.” Applying for such a loan is a requirement of getting a BEDI grant.

Lipscomb is looking a bit farther on the map – to the north and the south. He said the area, which includes the University of Tennessee Baptist Research Park, is a link between two new mixed-use developments built on what were once public housing projects – Legends Park and University Place.

Legends Park is being built on what was once the Dixie Homes development. University Place was built on what was once Lamar Terrace.