Southwest Suburbia

Bucking housing trends, David Walker is building an ambitious middle-class subdivision, not far from Highway 61. Is he dreaming?

by Phil Campbell


To the north, in the Westwood community, is the neighborhood of Boxtown, one of the city’s poorest areas. Isolated by trees and a lack of development, only one side of the road in Boxtown has sidewalks.

David Walker turns onto Riverside Drive, moving away from downtown in his Chrysler LeBaron. The 40-year-old Baltimore resident has on a black trench coat, a gray suit, and a dark blue tie that reads, in light-blue letters, “We bring good things to life.” He’s heading toward his proposed middle-class subdivision in Whitehaven – yes, Whitehaven – and recounting the story of how Harbor Town developer Henry Turley once questioned his sanity and praised his chutzpah at the same time.

“He said to me, ‘What makes you so bold?’” Pleased, Walker arches his thin black mustache upward with the curve of his lips. “That’s what he said. ‘What makes you so bold?’” (Turley doesn’t remember meeting Walker).

Walker heads south on Interstate 55, then exits at Highway 61, driving toward the Mississippi state line. Along the six-lane road are hourly rate motels, used-tire yards, seedy-looking garages, pawn shops, housing projects – all the trappings of inner-city despair. Then Walker turns left on Horn Lake Road, and in a short time everything changes. Trees begin to appear, solitary and tentative, then in groups on modest-sized tracts of land. Walker takes a right on Holmes Road, and small, abrupt hills slow him down. People disappear. This is the image of southwest Memphis that Walker wants people to have, land that more resembles the peaceful countryside of the Mississippi Delta than the urban blight of the Bluff City.

It is here that Walker hopes to persuade 109 middle-income home buyers and their families to buy a lot in the first phase of his proposed subdivision, Diamond Estates. Eventually, his entire development, called the Gemstones Community, would have 604 homes, ranging in price from $115,500 to $147,900.

“We plan to overcome the perception with the truth,” Walker says, when asked about marketing his subdivision. The truth, he says, is that this part of the city has so little crime that the homes across the street from the future development statistically have only one burglary every 50 years. Why? Because those homes are isolated from the rest of Memphis. And if potential home buyers are still concerned, Walker says, they should also be aware that no homes in the Gemstones Community will face a major thoroughfare; instead, they will all face inward, forcing any home burglars to go out of their way to scope out these homes. He’s slower to add that a 6-foot-high brick wall will separate the 250-acre subdivision from the rest of the city, with a small guardhouse at one entrance.

Four years ago, Walker knew nothing about developing real estate. Now the former IBM contract negotiator is looking to move from Maryland to Memphis to buck long-established housing trends here. The city is helping out, investing more than $600,000 in infrastructure improvements, including sewer extensions and road improvements and expansion on Holmes Road. Walker has obtained loans from First Tennessee Bank, realty service from Crye-Leike, engineering help from ETI Inc., and four area homebuilders in the city. He’s also received the encouragement of Memphis Mayor Willie Herenton, whose own subdivision, Banneker Estates, sits a quarter of a mile away. Twenty-six of Herenton’s 30 lots have already sold.

“The only new person in this deal is me,” Walker says, then adds, “and I’m a quick learner.” As the outsider, he may not be staking his local reputation on the project, but he is staking his money. He says he’s sunk six figures – he won’t say exactly how much – into the Gemstones Community so far. While some are depending on him to succeed – particularly First Tennessee, city officials, and a small group of black investors on the East Coast – the majority of people are sitting back and waiting to see what happens.

It’s an attitude perhaps best summed up by Herb Hilliard of First Tennessee. “I think we’re very fortunate someone like David Walker would want to take those kinds of risks,” he says.


West of the would-be Gemstones lies Coro Lake, a middle-class, relatively safe neighborhood that surrounds a quiet, man-made lake.

Memphis continues to lose residents to the rest of the county and into Fayette and DeSoto counties as well. According to the U.S. Census, some 36,000 people left Memphis between 1980 and 1990; during that same period unincorporated Shelby County’s population jumped from 60,000 to 120,000. Ironically, however, the very people who are contributing to Memphis’ immediate population decline may be contributing to the possibility of a middle-income housing revival within the city limits.

Consider this fact: One housing lot in the eastern part of the county now costs a home buyer, on average, almost $40,000. There’s a rule of thumb in the real estate business: Expect to pay five times more on the house than the land below it. A $40,000 lot should have a $200,000 home sitting on top of it.

Land “out east” is often too expensive for the middle class. The rich can afford to flee to eastern Shelby County, but not necessarily people making $50,000 a year. By comparison, lots in Walker’s development will begin at around $26,000.

“They’re not making any more land,” Walker says. “If [this development] is not a success this year, it will be in the near future. The building patterns are that they’re using up all the lots available out east. [Memphis] needs something like what we’re doing with Gemstones.” And, Walker warns, competition for the middle class in DeSoto County may begin in earnest if Memphis developers do not act.

By Walker’s research, there are 4,896 people in the immediate area who can afford to move up to homes that cost between $100,000 to $148,000. If you take in a 10-mile radius, there are 15,090 potential home buyers.

“You probably got more schoolteachers in the city of Memphis than you have $100,000 homes,” Walker gushes. “You add on that the police, the fire department, and all the hospitals ... There’s a tremendous potential there that isn’t being addressed.”

Local developer Kevin Hyneman, one of the largest producers of middle-income homes in the county, has sold 85 homes in Turley’s Harbor Town, a mixed-income neighborhood, and he’s now building 180 middle-income homes in East Memphis on Yates Road. In a year’s time, however, he’ll build 500 homes, most of them outside Memphis. Hyneman is reluctant to criticize a government-endorsed subdivision like Walker’s, but he isn’t very excited about the future of new middle-income housing for Memphis.

“To be honest with you, we’ve shied away [from developing in Memphis] because [property taxes] do have an impact,” he says. “When you’ve got city and county taxes, a lot of times that does have an effect on how much people can afford to buy.” The middle class is particularly vulnerable on the tax issue, Hyneman says.

“Cordova seems to be the exception,” he says. “The city taxes really haven’t come into play that much.”

Walker parks his car a couple hundred yards off Holmes Road, having followed a long, loosely defined trail of tire marks in the dirt. White posts and stubby green pipes dot the empty landscape, marking sewer and power lines. No houses have been built yet, but Walker seems to be seeing them in his head, homes quaintly set back from groomed yards and freshly paved two-lane streets. He stands on Diamond Estates, clutching a colored design of his subdivision. His slogan-stitched tie shifts with dramatic sweeps of his arms.

On his map of the Gemstones Community, there is room for 604 houses of different architectural styles and two miniature lakes, as well as a shopping center with a bank branch inside, and an elementary school. The Memphis City Schools system, he says, will build the school if the area demonstrates a need for it; as far as shopping centers go, he’s initiated talks with some grocery companies, but nothing is definite.

Walker is a one-man operation. He’s got financial backers – friends, Omega Psi Phi fraternity brothers, and professional colleagues from the East Coast who stand behind him, but the voice on his two answering machines, the one in Baltimore and the one here, is his. He lobbies city council members himself, often just showing up and staying the entire length of the meetings, sometimes even when items relating to his development aren’t on the agenda. He has no assistants to speak of, just contractors and subcontractors. A veteran negotiator, Walker uses his soft, somewhat high voice to make sure he comes across as the most genial, most flexible guy on the planet. “You can always find a way to make a deal,” he says.

Walker worked at IBM for more than a decade; his last major job involved negotiating more than $100 million in computer software for a major air-traffic control system in Great Britain. During those years, he quietly boasts that he never let a negotiation with a contractor reach an impasse. Everything’s win-win, he believes, if you have the patience and tenacity to find a solution.

Walker is originally from Hernando, Mississippi. A Jackson State University alum, he went to Wharton Business School at the University of Pennsylvania, but didn’t finish (“had to go to work,” he explains). One day he came across 250 empty acres in southwest Memphis as he was seeking land for his own retirement. He looked at the property and recognized its potential. He considered buying the land at the corner of Holmes and Weaver roads for speculation purposes, but then he learned about Herenton’s Banneker Estates. The mayor planned to make his subdivision an affluent development targeted for African Americans, a gated community, anchored by his own $400,000 home.

If the mayor’s home stabilized Banneker Estates, then Banneker Estates stabilized the area around it, Walker figured. It was an appraisal others had, too. Former Hamil-ton High School and NBA player Todd Day has plans to develop his own affluent, 68-acre subdivision next to Herenton’s.

A year after Herenton’s development plans were announced, Walker bought 250 acres of tree-covered land less than a mile away. “Early on, I was hoping someone could find a reason why this wouldn’t work,” Walker says. “The only reason it hadn’t been done before is that no one had elected to do it. A success waiting to happen.” Walker immersed himself in research on real estate development, as well as the local market.

The city of Memphis got involved in 1996, when it formed the Middle Income Housing Task Force. Composed of bankers, realtors, home builders, developers (including Walker), and politicians, the committee decided that the market Walker talks about so endlessly probably does exist, but that it needs to be encouraged. There are large sections of undeveloped land in Westwood, Raleigh, and Frayser. These parts of town were often isolated from other neighborhoods, mostly devoid of crime and other problems because they are mostly devoid of people. If the city provided the sewers and MLGW the power, developers might build homes. If the city threw in incentives for the customers, people might purchase the homes.

The committee decided to endorse two test projects before the city council; one was local developer Milton Grant’s proposed Elm Springs subdivision, whose plan required $608,000 in public infrastructure improvements for 138 middle-income homes straddling Raleigh and Frayser. The other was Walker’s Gemstones Community, which would be built in sections, starting with the Diamond Estates subdivision, at a cost of $616,000.

The idea of bringing together everyone to try and steer the housing market back into Memphis made politicians, financial experts, and real estate industry leaders feel pretty good. The government of Shelby County, as part of the “balanced growth” agreement with the city, even agreed to pay half of Walker’s infrastructure costs.

But then Chapter 98 was passed in the Tennessee General Assembly, and everyone but Walker lost interest as the city’s ability to annex eastern Shelby County was threatened. Mayor Herenton declared that Memphis’ overall health and ability to grow was in serious, perhaps fatal, danger if the city couldn’t chase after citizens who moved out east. Words between Herenton and Shelby County Mayor Jim Rout were exchanged, the “balanced growth” plan fell apart, and the county refused to pay its half of Walker’s infrastructure improvements.

Suddenly, the city couldn’t afford to pay for both Grant’s development and Walker’s development. Walker called Grant.

That was several months ago. Grant recalls the conversation. “He told me the city was a little short on his [project]. I said, ‘That’s fine. Do yours and see if you can actually do it.’”

Grant wasn’t particularly concerned about Elm Springs. He’s currently involved in a $20 million-dollar apartment project on Germantown Parkway. “I’ve been tied up with what I’m doing,” Grant says. “I don’t know what [the city did]. I haven’t had any communication with the city.”

Walker got all of his funding approved in January.

In the end, Walker’s biggest problem may not be his own lack of experience with real estate; it may be, as he says, overcoming the negative perceptions of home buyers. A lot of people consider anything that’s not “out east” to be crime-ridden. Land to the north and south of Interstate 240 is “dangerous,” according to the people who don’t live there.

Marketing the development has as much to do with what you call the area where the Gemstones Community is located as it does describing the homes you can have built there. In reality, the currently empty plot of land is sandwiched between Whitehaven and Westwood, the neighborhoods which lie adjacent to Walker’s subdivision; those names are not necessarily going to sell the kind of homes you’ll find in Bartlett or East Memphis. “I call it ‘Southwest,’ Walker says. “And I think in a few years it’ll be called ‘Gemstones.’

“The city calls it Whitehaven,” he allows.

Defining the area is a crucial marketer’s tool. Walker may want to take advantage of the fact that Westwood, the neighborhood to the north and west of Diamond Estates, hasn’t had a homicide in two years, and that crime has been dropping, thanks in part to the presence of a police mini-station a couple of miles away. But Westwood encompasses a variety of areas, such as Boxtown, one of the poorest and oldest neighborhoods in Memphis; homes out there didn’t even have indoor plumbing until a decade and a half ago, and the city has provided sidewalks on only one side of the road. Westwood comprises two housing projects, but there are also a number of modest, stable neighborhoods. Whitehaven also runs the gamut, from Graceland and upper-middle-income houses to integrated, lower-middle-class neighborhoods, to streets stricken with poverty.

And other, independent neighborhoods nearby could form other perceptions about “Southwest.” Coro Lake and Robco Lake lie in the corner of the city and state; the two man-made, private lakes are strictly patrolled by the residents who want to keep out everyone from South Memphis car thieves to Mississippi fishermen. Though crime is low there, their insurance is often high because insurance companies tend to lump them in with the rest of the 38109 zip code, where auto thefts remain high. Coro Lake residents don’t like to be called anything but Coro Lake residents.


Not far away on Horn Lake Road lies Mayor Willie Herenton’s $400,000 home in the pricey, gated subdivision, Banneker Estates.

“When people don’t know, I just smile and say, ‘Greater Whitehaven,’” says Barbara Ingram. “Coro Lake is older than Westwood. In the [daily newspaper’s section on] real estate, they lump us in with Westwood.”

Coro Lake residents are a tough, realistic crowd. They know that if they were able to magically lift their lake and middle-class homes into the air and place them in Germantown or Collierville, their property values would double or triple. That’s why residents like Ingram would welcome a successful Walker. Ingram, however, isn’t crossing her fingers. “How can I be a realtor and excite people about moving here?” she asks. “Just take shopping alone. What will appeal to these people? There are no banks in this area ... Walgreens is the nearest big store, but they’re not in the immediate area.”

The land where the Gemstones Community will sit already has a brief history of controversy and development plans gone awry. In the 1980s, a developer tried to put hundreds of “middle-income” houses there, according to Coro Lake residents. The houses would be two train boxcars put together and sold relatively cheaply. The boxcars were available, but it was soon determined that adjusting such a non-residential structure for heat, water, and power was impractical. At the beginning of this decade, another developer wanted to add a mammoth trailer park. Coro Lake and Westwood residents fought that off.

If any of that is to be taken as a pessimistic sign, Walker’s ignoring it. Instead, he’s talking to 12 interested home buyers, and he’s looking forward to seeing the city come through with the recommendations of its Middle-Income Housing Task Force. “We need to see follow-up on initiatives addressing home-buyer and homebuilder incentives,” he says. “It’s time to move on to those incentives, so we hope to see something in the next few weeks.”

And if you don’t, expect Walker to do something about it. n

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