Joining Together To Get Our Share

There are very few concepts that are likely to draw virtually no opposition.  I’d like to offer two:
1.  Memphis has too many blighted and abandoned buildings that need a champion to either refurbish or repurpose, or take down.
2. Memphians need to make sure we get our share of federal and state dollars floating around that would stimulate job growth and new revenue for the City.

Every now and then, those two concepts come together, as is the case with the 20-story abandoned hotel at 969 Madison in the Medical Center.  Abandoned for more than 15 years, many Memphians have no memory of it ever being a productive piece of real estate.

At one time, it was a vibrant hotel with a 400-plus space parking garage below.  Today, it sits at the northeast edge of the UT-Baptist Research Park, being developed by Memphis Bioworks Foundation.  My office in the 20 South Dudley Building sits almost next door.

Imagine the impact that building could have on the Medical Center if it were to return to use as a hotel.  One of the tallest buildings in the area would look better, scores of new jobs would be created (construction jobs at first and permanent hospitality jobs upon completion), there would be a host hotel for all of the people visiting patients or doing business within the Medical Center, and UT Health Science Center would have a hotel next door to campus.  In short, it is just the kind of catalyst to keep the development of this area of our city moving forward.

Anyone in the hotel business will tell you that now is a tough time to talk about development.  Recessions are not kind to travel plans.  So, that is where concept number 2 comes into play – wise use of Federal dollars to accomplish an important goal.

The City of Memphis and Memphis Bioworks Foundation recently received of a $2-million grant from The U.S. Department of Housing and Urban Development (HUD) as a part of funding for the hotel redevelopment and refurbishment.

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 structures.

According to HUD; these Brownfields which are often perceived as unproductive eyesores in their communities hold tremendous potential as sites for community revitalization.  Since 1998, HUD has made an investment of $171 million in BEDI grants and $761 million in companion Section 108-guaranteed-loans in 138 communities. These funds have leveraged another $1.2 billion in other public and private funds.

The total project cost for the hotel on Madison is $33.8 million.  The HUD grant is just one step in the process toward funding of the hotel development.  As a next step, the city of Memphis will seek an additional $4 million in Section 108 loan funds.  Of the total $33.8 million projected cost of developing the hotel, private equity will cover approximately $6 million of costs. New Market Tax Credits (another Federal program) will provide $8 million and traditional debt make will make up the balance.  While the hotel project still has some pieces that need to fall in place, it is a great example of public private partnership coming together for a common goal and of targeted application for dollars that we can bring into the community. The City will also benefit from the new jobs, sales tax, and other tax revenue that is projected to be over $800,000 per year.  From Memphis Bioworks perspective, we hope this is just one of many projects we can join city leaders in as we all seek to get our City’s fair share.

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