By Tom Bailey Jr. - The Commercial Appeal -

ArtSpace has selected a 107-year-old warehouse in the Historic South Main District to build affordable live/work spaces for 50-70 artists and their families.

The $15 million-$18 million project, at 138 St. Paul, not only will renovate and preserve the old three-story, red brick United Warehouse building, but build a new companion building and connect the two structures, said Wendy Holmes, vice president of consulting for the Minneapolis-based ArtSpace.

Across the nation, the nonprofit group has built 30 such developments where low-income artists can live, work, exhibit, perform and feed each other’s creativity.

The name’s not nailed down, but, she said, “ArtSpace Memphis has a ring to it.”

The LRK architectural firm is designing the project.

The United Warehouse building, distinguished by its arched windows and doors, is just southeast of South Main’s Arcade Restaurant, directly behind St. Martin Condominiums, 137 G.E. Patterson, and west of Downtown’s the large Postal Service center.

ArtSpace has negotiated a conditional $850,000 purchase price agreement with property owner Phil Woodard. Final agreement is contingent on due diligence and ArtSpace acquiring financing commitments.

The key money component is securing federal low-income tax credits through Tennessee, Holmes said.

That money typically provides half to 60 percent of the equity for ArtSpace projects. About 15 percent often comes through historic-building tax credits, 10 percent from philanthropies and a mix of local sources, and other money from Community Development Block Grants and other federal programs.

Made from a short list of eight buildings around the city, the selection is a boost for a South Main District eager to energize work-a-day street life with more people.

But foremost, said Memphis College of Art president Ron Jones, the ArtSpace facility will provide long-term support for artists and the Memphis arts community. MCA is a neighbor, having opened its Nesin Graduate School last year two blocks away at 477 S. Main.

“First, ArtSpace contractually sets it up so that it’s not the artists coming in and growing the economy of the area and then other people pushing the artists out,” Jones said. “The space will continue to be there and continue to function the same way.’’

By bringing practicing artists just two blocks from the MCA graduate school, ArtSpace will offer his students with role models and instructors. “It’s perfect in so many ways,’’ Jones said.

For the South Main District, he likened ArtSpace’s impact to that of an anchor store in a retail development.

“As we get a critical mass of artistic, creative people, then restaurants and boutiques and pedestrian traffic increases and all that starts to transform a place into something more desirable and something that can contribute to the city’s future.’’

South Main business owner John Sylvester heard of the selection this week.

“I think it’s perfect,” said the owner of Sachë Clothing and Design, 525 S. Main. “You have the opportunity for pedestrian traffic to flow through. It’s a great fit for us. The location helps tie in this end of the street and hopefully with some other projects that have been going on in the Main strip.’’

Woodard bought 138 St. Paul in 1998 intending to develop up to 28 condos. He recalled it previously housed an ICB’s discount store. Now, Huey’s restaurants use it for storage.

The ceilings are 16 feet and there’s a nice rooftop view, the developer said.

If all goes well, Holmes said, construction should start in late 2013 and be completed by late 2014.