The Story of the Sterick Building

The rise and fall of the “Queen of the South.”

by

The 1920s were the golden age of Memphis commercial architecture. Try to picture this city’s skyline without the landmarks constructed during that decade: The Peabody, Hotel Chisca, Claridge Hotel, Wm. Len Hotel, Ellis Auditorium, Farns-worth Building, Columbian Mutual / Lincoln American Tower, new Cotton Exchange, Shrine Building, Elks Club, and Orpheum Theatre. Overshadowing all these was the Sterick Building, at the northeast corner of Third and Madison. Construction began in November 1928 on the largest office complex in Memphis, a 340,000-square-foot tower with almost 900 offices, and at 29 stories, then the tallest building in the South.

Two prominent Texans from Fort Worth merged their last names to give the Sterick Building its name. Ross S. Sterling, a wealthy investor and politician, was co-founder of the Humble Oil Company and later served a two-year term as Texas governor. His business partner was his son-in-law, Wyatt Hedrick, an accomplished architect who had designed highly decorative commercial structures throughout Texas in the 1920s.

The site they chose for their latest venture had been the former home of Napoleon Hill, a cotton merchant once considered the wealthiest person in Memphis. The authors of Memphis: An Architectural Guide described his impressive mansion, erected in 1882, as “Memphis’ finest example of robber-baron Victorian architecture.” After Hill’s death in 1909, ownership of his property transferred to his descendants, Memphians Olivia Polk Evans Jefferds, Henry Niles Grosvenor, Charles Niles Grosvenor III, and others — collectively referred to as the “Grosvenor Estate.”

Sterling and Hedrick made a crucial mistake when they selected this prime location. They didn’t purchase the land itself, instead signing a 99-year lease for the 148-by-148-foot property along Third Street (present-day B.B. King Street). They were spending more than $2.5 million to erect a skyscraper on land they didn’t own. What’s more, the lease terms were unusual. The Grosvenor Estate would collect monthly payments of $1,500 in the form of gold bullion “or the fluctuating dollar equivalent of that amount of gold.” These financial details didn’t seem to matter at the time but would certainly cause problems later.

The City Within the City

Most Memphians didn’t know, or care, about these arrangements. All they noticed was the gleaming Gothic Revival (or “Commercial Gothic”) skyscraper going up in the heart of Downtown. The builders spared no expense on the “city within the city” that could draw as many as 10,000 workers and visitors every day. On the exterior, polished granite wrapped around the street level. Above that, Bedford stone from Indiana clad the first three floors. Higher floors used “artificial stone” — specially cast concrete that could be formed into highly detailed arches, pendants, spires, and other decorative elements, much of it hand-carved by this city’s own Christie Cut Stone Company. As the Sterick stretched to its full height, builders capped the top with a mansard roof of green tiles, adding two more windowless floors that concealed the elevator mechanism and utility systems. Two underground levels housed the four massive coal- and oil-fired boilers that would provide steam heat, along with the building’s own water well, ice-making and refrigeration equipment, and parking for 50 cars.

Interior details made the Sterick Building more elaborate than any other office building in Memphis. Inlaid blocks of polished Tennessee marble floored the four main corridors, meeting at a lobby topped by a “theatrical dome.” The walls dripped in gold-painted decorative plaster, prompting one newspaper to describe the interior as “rivaling the beauty of a Moorish castle.” Floors of all public spaces throughout the building were polished terrazzo. Other interior features included elaborate light fixtures, four-bladed ceiling fans, ornate staircases and door handles stamped with the Sterick “crest,” and doors and trim carved from quarter-sawn white oak. “Ray-O-Lite” Venetian blinds shaded each of the building’s 2,280 windows. Larger offices had their own wash basins, with drinking fountains and spacious public restrooms located on every floor.

The Sterick News, the building’s monthly publication designed to introduce new tenants to their fellow “Sterickites,” bragged that “the famous Dunham differential vacuum heating system gives a temperature of spring in the coldest winter.” The editors paid special attention to the eight Otis “Micro-Signal Control” elevators, hailed as “the last expression in vertical transportation.” Four elevators would serve only the first 12 floors. Express elevators would whisk passengers from the lobby to the higher floors, a 25-second ride at a speed of 900 feet per minute, making them the fastest elevators in the country. The Commercial Appeal noted that New York City, with all of its skyscrapers, had limited the speed of its elevators to 700 feet per minute. Even though any floor could be reached by pressing a button, the Sterick preferred to employ young women — clad in starched white uniforms — to serve as “pilots” for each car.

Early news coverage, in the form of the city’s daily newspapers or smaller neighborhood newsletters, had nothing but praise for the new building. In November 1929, one year into the building’s construction, a writer for The Peabody Hylites thanked Sterling and Hedrick for “proving faith in Memphis’ supremacy as an agricultural, industrial, and commercial center.” She noted that the building’s 3,500 tenants would be “comfortably cared for … with every conceivable equipment that inventive genius has devised to meet the luxurious taste of the present-day businessman.”

These innovations meant that constructing and furnishing the Sterick cost more per square foot than any other building in the South. Noting the 29 tons of electrical fans throughout the building, a building manager told reporters, “Were all these fans put in one place, enough air motion would be generated to cause a small tornado.” What’s more, the power to run those fans, along with the lights and other power requirement, “used as much electricity as 600 homes every day.”

Some tenants were so eager to be “Sterickites” that they moved in months before the building was truly ready. The Commercial Appeal told the story of Dr. Miriam Drane, a physician who had immediately leased offices there. Even though the elevators weren’t operating and the stairs weren’t finished, she clambered up a ladder every morning to reach her clinic on the second floor. The paper didn’t say if her patients did the same. After several months, the elevators were operating, and the good news, Drane said, was, “They didn’t charge us [rent] for the months we were cliff-dwellers!”

At 9 a.m. on March 5, 1930, Mayor Watkins Overton turned a key in the massive bronze door of the main entrance on Third Street to open the Sterick Building to the public. The Commercial Appeal called it “probably the city’s greatest house-warming in recent years.” More than 5,000 visitors, each of them given a white carnation, toured the building throughout the day. “Interest centered on the Renaissance lobby, with its unusual decorative effects, and harmonizing pink and black marble panels,” according to the newspaper. “Feminine visitors admired the women’s lounge on the thirteenth floor, a quiet, well-furnished suite, with wicker furniture, lounge, day bed, dressing tables, showers, and even ash trays.” For the men, a barber shop on the same floor “departs from the traditional scheme with fixtures of orchid tint and art mirrors.”

Of course, the main attraction was the view from the top floors, offering “a wide sweep of the Mississippi River and a vast panorama of three states spread out below.” The two uppermost floors, initially laid out for offices, would quickly be transformed into a restaurant and private club.

The tour was supposedly the first time that co-owner Ross Sterling had visited the new building, and he claimed to be delighted that the building was only one-fourth occupied. Early tenants included lawyers, accountants, and sales representatives for a diverse range of American businesses, many of them with no obvious ties to Memphis: the Atlantic Coast Railroad, Colgate-Palmolive, Graham Brothers Motor Cars, Savannah Sugar Refining, and others. Several floors were specially designed for doctors and dentists. The Junior League moved its headquarters to the second floor, and a group called the Southern Scribes opened its club’s offices in the Sterick.

The ground floor was reserved for retail. In 1930, Walgreens announced it would open a branch here, featuring “a sanitary soda fountain of the newest design.” Another ground-floor tenant that year was Meldor’s, a men’s clothing and accessories company, “handling a complete line of hats.”

Streamlining the Skyscraper

Just two years after its grand opening, the Sterick Building owners put the property on the auction block. They had no choice. By the time of the auction in September 1932, with the country deep in the Depression, the Sterick was barely half-occupied, and the owners were saddled with delinquent property taxes of $40,000 and a past-due payment of some $1.5 million on its first mortgage bonds.

The property, valued at $2.5 million, sold for less than half that. Only one bidder, the Madison Avenue Corporation, purchased the landmark for $1.2 million. Principals in the firm, which was organized for the sole purpose of acquiring the Sterick, included Memphians Robert Godwin, Frank Gilliland, and L.B. Echols, who had been the Sterick’s general manager.

This was only the beginning of financial troubles that would plague the building for decades. In 1937, newspapers reported that the Madison Avenue Corporation sought refinancing of the building “to seek a reduction of overhead through lower interest rates and elimination of unfavorable financing.”

In 1945, the Sterick was sold again. More specifically, “control of the Madison Avenue Corporation has passed to interests associated with Col. James Hammond,” who was described in The Commercial Appeal as a “Memphis capitalist” — without mentioning that he was a former publisher of that newspaper. The sale price had dropped even further, with the building price recorded as $1,000,000.

That same year, exterior renovations changed the look of the Sterick. A “streamlining” project removed the nine-foot stone “spikes” that had decorated the upper reaches of the building. The Commercial Appeal explained, “These Gothic spires, which have become as familiar to sightseers as the building itself, were removed for safety.” The stones — actually cast concrete — had chipped over the years and become unstable. Some had even been struck by lightning, and “building officials couldn’t have those thousands of pounds of stone playing heavy-heavy-hangs-over-your-head with the multitudes who pass below.” The six-month project, which involved sawing and grinding, didn’t please tenants on the upper floors. One attorney complained to reporters, “The noise from the crews working outside our windows has us practically paralyzed,” and another said, “I can hardly hear myself think, much less dictate.”

More Changes of Ownership

The 1950s may have been the peak years for Memphis’ most prominent office building. By this time, some 20 years after it opened, the Sterick boasted an occupancy rate of close to 100 percent. That was a dramatic improvement from the early days, when occupancy remained so low that tenants themselves formed the Sterick Building Boosters Club, to help fill the empty offices.

In 1950, Hammond stepped down, replaced by his partner, Frank Gilliland. The Madison Avenue Corporation announced a two-year, million-dollar renovation that would air-condition the entire building. For several years, the two top office floors — occupied by the Pontiac Motor Division of General Motors — had air-conditioning, but most lower floors relied on the old ceiling fans that had been installed in 1930. This project would require replacement of most of the wiring in the building, and reinforcement to the roof of the building’s east wing, where a dozen cooling towers would be placed.

Even so, steady ownership of the Sterick remained a problem. In 1952, the Mid-Southern Foundation purchased the building for $1.5 million. Newspapers expressed some concern about this newly organized group, described as a “nonprofit welfare corporation.” A foundation spokesman, Memphis securities dealer Robert Jordan, explained his group’s purpose was to “support religious, charitable, and educational institutions of the Mid-South.”

So why purchase the Sterick? Jordan responded, “The acquisition of such a fine, income-producing property as the Sterick Building is [the foundation’s] first step toward carrying into effect its charter purpose” — which marks a rare time when the Sterick was publicly described as “income-producing.”

Within four years, the Sterick was sold again. By 1957, with the building occupied and seemingly doing well financially, the purchase price had soared — to $3.85 million. As with previous sales, the purchase did not include the land, which was still owned by the Grosvenor Estate. The new owner this time was Lawrence A. Wien, a prominent New York City attorney and investor whose portfolio of properties included the Empire State Building. Wien commissioned the Memphis architectural firm of Hanker & Heyer to draw up plans for a $200,000 modernization of the ground floor. This is when the old “theatrical” dome in the lobby, including much of the original ornate decoration, was replaced with a “20-foot ceiling cove with indirect lighting,” along with new stainless-steel and aluminum doors for the eight elevators, and new entrances on Third and Madison.

Perhaps the most dramatic change to the exterior took place in 1957. The Sterick, which had never been painted, received a thick coat of white paint, which also covered the green tiles on the roof.

Ownership of the Sterick, which always seemed to be in a state of flux, became complicated that same year. Although Wien continued to own the building, a group called Sterick Building, Inc. signed a 68-year contract leasing the Sterick from him. Management would now be in the hands of four Memphians: Alvan Tate, Sam Cooper, Lucian Minor, and Herbert Humphreys. Both Cooper and Humphreys were principals in the local food-processing plant, HumKo. With the building now 93 percent occupied, the new group announced additional plans for upkeep and improvements, newly installed signage, and a battery of mercury vapor lights along the roofline that would give the Sterick “a floating aspect at night.”

In 1965, a 10-story adjoining building called Sterick North opened. Though this structure made no attempt to replicate the Gothic Revival style of the original building, it addressed a growing concern — lack of parking — with the first seven floors serving as a parking garage for 400 cars. The upper floors would be home to a 125-unit Holiday Inn, complete with a rooftop swimming pool.

Even with these improvements, the Sterick was facing stiff competition from newer, more modern office buildings Downtown. When First Tennessee Bank opened its headquarters across the street, it lured away the Summit Club, which had occupied the top floor of the Sterick for decades. The Sterick responded by converting its 29th floor to the Tower Restaurant, and the floor below to the private Tower Club. Meanwhile, a few blocks away, the 100 North Main Building, with its distinctive rooftop restaurant that revolved every 90 minutes, also attracted new tenants. The Sterick was no longer the “best address in town,” and it certainly didn’t help that other office buildings and shopping centers, along with the new shopping malls, were opening in East Memphis and Whitehaven, drawing retailers and residents away from Downtown.

In late 1965, the Sterick Building changed owners again. Sterick Building, Inc., which had operated the building since 1957, transferred the lease back to Lawrence Wien, the New York investor, who expanded the new ownership group, to be called the Sterick-Memphis Realty Company, to include Memphis attorneys Frank Gilliland Jr., James Gilliland, and Robert Gilliland. If those names sound familiar to anyone following the Sterick saga, these gentlemen were the sons of Frank Gilliland Sr., who had been part of an earlier ownership team.

But there was no point in trying to keep track of owners’ names, because in 1973 the Sterick was auctioned yet again. By now, even the local newspaper seemed weary of all these transactions. A Commercial Appeal headline announced, “Sterick Dusts Off For Sale Sign” and reminded readers that the building “will soon go on the auction block for the fifth time in 43 years.” The giant building’s capacity was now down to 71 percent, with 115 businesses as tenants. The new owner this time was the Equitable Life Assurance Society of the United States, which paid precisely $1,902,837.60 for the building — but once again, had no ownership of the land.

The building’s new manager, Michael E. Gallagher, assured tenants, “We’re doing a lot of things that old tenants tell us no other manager ever did.” This included brand-new elevators and air conditioning. Other changes included an art exhibit in the lobby, an aquarium holding live catfish, and “a different type of live tree in the lobby each month,” according to The Commercial Appeal. “None are indigenous to Memphis, and this month [July 1974] it’s a Manila palm.” More surprising, and probably more welcome, were the owner’s plans for an exterior paint job. Expected to cost almost $200,000, “the exterior will be restored to its original beige sandstone appearance, but the mansard roof will remain white.”

In 1975, that issue with the “ground lease” reared its head. “A suit to determine whether rent on the Sterick Building land should be paid in current dollars or 1926 dollars has been filed in federal court,” reported the CA. Why would that matter? The problem was that the original lease, filed with the Grosvenor Estate, specified that the $1,500 monthly rent be paid in gold — “or the fluctuating dollar equivalent of that amount of gold.” As a result, the Equitable Life Assurance Company was surprised to receive a January 1975 bill for $13,469 — which the newspaper explained was “the amount equal to $1,500 of gold in 1926.”

Equitable didn’t have to worry about this problem for long. The following year, they sold the Sterick Building — yes, again — to Harold Collum, a Dallas real estate investor. Even though the life insurance firm had purchased the property for almost $2 million, newspapers reported the sale price to Collum was only $200,000.

According to some reports, Equitable was anxious to get rid of the property after learning of the high maintenance costs and the new ground-lease payments. The new ownership group would be called United Property Resources, Inc.

Closing the Doors

Meanwhile, in 1978 the Sterick Building was listed on the National Register of Historic Places. That was one bit of good news, because it gave the building a certain prestige and offered tax credits to the owners. But it was mostly downhill from there for what was once the city’s finest office building. Beginning in 1979, news coverage rarely mentioned the Sterick Building without noting it was “problem plagued” or “financially troubled.” Elevators were shut down when inspectors discovered the “ropes” holding the cars were badly frayed. A main water pump failed, leaving tenants on upper floors with no bathrooms or drinking water, and doctors and dentists unable to treat patients. The janitorial service company stopped working when it complained it hadn’t been paid in months. Tenants filed suit against the building management over ongoing maintenance and safety issues, while others moved out entirely. It was just one thing after another.

Alarmed at the condition of the building, which they described as “a dilapidated, dangerous fire hazard,” the Grosvenor Estate stepped into the fray. Claiming they had the right to control the building that stood on their land, they went to court to force ownership of the Sterick to revert back to Equitable Life, arguing that Harold Collum was doing nothing to address the maintenance issues. Equitable, however, wanted nothing more to do with the property, claiming they couldn’t afford to pay for the needed affairs. Lawyers for the Grosvenors pointed out that Equitable, the third-largest insurance company in the world, reported 1979 assets of $24 billion. Surely they could pay for the Sterick’s upkeep? It just went back and forth, with nobody, it seems, wanting to take responsibility.

Few Memphians were surprised when, in 1979, the Sterick was sold — this time to a group of Canadian investors. ICI Properties of Edmonton, Canada, took ownership in July 1979, and announced a complete facelift for the 50-year-old building. They would make all needed repairs, replace the roof, paint the structure inside and out, and repair or replace all the electrical and plumbing systems. The company even announced they would move their corporate headquarters to the Sterick so they could better monitor the situation.

By this time, the Sterick’s occupancy rate had plummeted below 40 percent, but Edward J. Leone, president of ICI, declared, “The Sterick is the Queen of Memphis, and we want to put her back on her throne.” This is the company who decided the exterior colors of the building should be yellow and brown, as they remain today. When that work started, even the building manager admitted the Sterick now looked like “it was wearing an ugly sport coat.”

After painting the building and making a few cosmetic changes, Leone’s investment group decided the Sterick was too much trouble after all, so they did what everyone before them had done: They sold the building. The newest owners were now Norwood Management Company and Tennessee Management Company, described as “recently formed Tennessee corporations.”

Just one month after the sale, a horrific event took place which almost certainly sealed the fate of the Sterick Building. On the afternoon of April 4, 1981, a prowler assaulted a young woman working alone on the 23rd floor. Her screams drew the attention of the Sterick’s security guards, who chased the assailant into a large group of offices down the hall, and locked him inside. He decided his only escape was to break a window and crawl outside, onto one of the building’s narrow setbacks, where he began to run around to the Third Street side of the building.

The day had been stormy, and witnesses looking out the windows of First Tennessee Bank across the street, at first thinking the man was a construction worker, watched in horror as a strong gust of wind blew him off the building. His body landed on another setback nine stories below.

This tragedy cemented the Sterick’s reputation as a building that was derelict, dilapidated, and now dangerous, too. Management struggled to hold onto the property, but a few months later, an outside painter was nearly killed when a window air-conditioner tumbled out of a window and crashed into his scaffolding. By 1983, news about the Sterick was generally bad. A typical headline was this one: “Sterick Building Faces New Crisis.” As more tenants left, more owners and management groups stepped in, one after another — Grossman Enterprises in Florida; Memphis Management Associates; and Sterick Tower Partners, composed of the Algernon Blair Group of Montgomery, Alabama, and EMSI of Miami, Florida.

One of the principals of that last group stated the obvious. In addition to resolving all the never-ending maintenance issues, the old building needed a careful, thoughtful renovation that reflected its history and preserved its architectural integrity. “What has happened over the years to the building is that a lot of its beauty has been covered up,” said Mark Shantzi with EMSI. “We’re addressing ways to recover as much of that beauty as we can.” As with the other plans announced over the years, none of that happened.

In the 1980s, Memphis Heritage moved into one of the hundreds of vacant offices in the building. “We think the Sterick Building will be outstanding if its details and elements are restored and given attention,” said Kay Newman, the organization’s then-president. “We plan to keep our offices in the building and hope to work with new owners with research and advice.” The problem was that no owner was willing to stay with the building long enough to give it the attention it deserved — or to spend the money it would cost.

In 1991, the Sterick was put on the auction block again. By this time, the building that once housed almost 900 offices had only two tenants. Ownership had reverted back to Equitable Life, as the Grosvenor Estate had demanded, but they did little to the building but seal it off and basically mothball it — keeping the rain out and making sure window panes and other parts of the structure didn’t pose hazards to pedestrians below.

Out of all those Downtown landmarks constructed in the 1920s, Ellis Auditorium had been demolished to make way for a new, modern convention center complex, but the rest were still standing, some looking as nice as the day they were constructed. Only the mighty Sterick Building had deteriorated to such a pitiful condition that there was serious talk of its demolition.

That’s when Stuart Harris stepped into the picture. As head of Constellation Properties, he had transformed the sadly neglected Medical Arts Building at 240 Madison into The Commonwealth. Harris and his team were looking for a new project. They found one by looking down the street.

See part two of this story, “Saving the Queen of Memphis.”