Behind the Headlines – April 17, 2015

Behind the Headlines – April 17, 2015


(male announcer)
 Funding for
 “Behind the Headlines” is  provided by
 D-H-G and Advisors.  D-H-G is a full service
 accounting firm serving Memphis  and the Mid-South region for
 more than 60 years combining  community involvement
 with the technical resources  of a national firm.  For more information,
 visit DHGLLP.com. (female narrator)
 Production funding for
 “Behind the Headlines”  is made
 possible in part by.. The transformation of Downtown
Central Station tonight on “Behind the Headlines.” [theme music] I’m Eric Barnes, publisher
of the Memphis Daily News. Thanks for joining us. I’m joined tonight by a
roundtable of people involved with and watching
the project Downtown.  June West from
 Memphis Heritage.  Thanks for being here. Thanks. (Eric)
 Alex Turley, a developer
 with Henry Turley Companies. Thanks for having me. (Eric)
 Ron Garrison, the head of MATA.  Bill Dries, senior reporter
 with the Memphis Daily News.  And Archie Willis
 from Community Capital. Thank you all
for being here. Let’s start
with you, Alex. And maybe just give an overview
for people who haven’t seen the details of what’s been
proposed for the project down at Central Station. The various components,
some more firm than others. We get that. But outline the
project for us. Well, at Central Station, we
are working on a project that includes a transforming
the apartment portion of the property in to a boutique hotel
with a movie theater that would be operated by Malco at the
corner of the property at G. E. Patterson
and Front street. And we would essentially
continue the residential development that we started
really 20 years ago at South Bluffs and most recently
with South Junction and sort of connect the south side of
Central Station with additional residential development. And we would propose to keep the
farmers’ market as an integral center piece
of the project. So, it would be an authentically
mixed use development. So, the mix of some
hotel, some more residential, the Malco movie theater. There’s talk of a
grocery store with D. Canale, the longtime
Memphis company. But that’s still
pretty tentative. But it’s been out there
that that’s been talked about. We’ll go through some
more of those details. But Ron Garrison,
MATA owns the building. Correct? The city owns it. The city owns the
building but MATA is involved, why? Well, the city owns the building
but it can only be used for transit use. And it was
intended for MATA. And that’s
where we’re involved. We maintain it and, you know,
lease it out, etcetera. But in the
presentation that went to, I think, the finance
committee of the MATA board, one of the benefits was that
it sort of gets MATA out of the real estate business. Is that a fair
characterization? Yes, out of the real estate
business is a good thing for MATA. We need to focus on
transit and getting folks to where
they need to be. And we’ll talk more about the
MATA role and the Amtrak will still be there,
which isn’t MATA really. But we’ll talk
some more details. Archie Willis, funding
a project like this. You’ve been involved a lot
for what we talked about, 15 years,
before the show. Funding all kinds
of projects around. What are the challenges and or
the opportunities in terms of funding this
sort of project? Well, in this case,
it’s pretty — fairly unique
situation actually. We are working with, as you
mentioned and Alex mentioned, other development partners. So, part of the challenge is
identifying those partners. And then they will bring their
funding and financing to the table to combine with a
small amount of funding we’re requesting from
the public sector, primary for what we call
public and civic improvements. But the primary funding sources
will be funding provided through the various
development partners. For example, the hotel
developers will bring their own financing to the table. We will be involved
directly with the apartments. We’ll bring
financing to the project. Malco will bring their
financing to the project. And the civic component will
be used to enhance the farmers’ market and to do some other
enhancements to the property that we think
will make it a much, much more viable
and vital situation. Overall, it’s estimated
as a $55 million project. And the public
component would be? The public component is three
million dollars and 52 million dollars of
private investment. And the three
million, do you know where? Are you going
to the county? We’re actually working with MATA
to pursue grants that they are eligible for. They will
need a 20% match. So in theory, we get
three million dollars. They will get
2.4 from a grant. And then the local.. It could be government. It could be philanthropic
supporters as well, will provide 600,000
for the 20% match. And we’ll break
down a little bit more. June West. So, from a
historic point of view, it’s obviously an
iconic building. The importance not just to this
building but in the context of a whole lot of, I guess
from your point of view, winds in terms of historic, not
just preservation but massive redevelopments
from Overton Square, to the brewery right down a
couple of blocks from this project, to Crosstown,
and on, and on, and on. I feel like the
city is on a wave. You know, we may not call
it historic preservation. We may call it restoration of
important buildings or whatever. It seems to be historic
preservation may be a dirty word these days. And I don’t
mean that in jest. But basically the redevelopment
of all of these properties in Central Station,
I’m extremely excited about the
Central Station project. It brings
density to that area. And having our offices on
South Main a long time ago, I saw the give and
take that was happening. You know, people being there
too soon and then not making it and whatever. And I think this density of
people being there either by hotel or apartments. I can’t think of a better thing
to be able to go spend the night in the hotel and get on the
early morning New Orleans train. Because nobody wants to
drive and get there that early. So, there are all sorts of
components that make this a win-win situation. I love the transparency
around the powerhouse, which is an iconic
building in to itself. I love tying the
street, Front street, in to Main street. I think that’s
tremendously valid. And I think it just shows that
historic properties like that can be exciting once they’re
handled in the appropriate way. Bill. Archie, in terms of
assembling financing, we’ve seen one project just in
the last few months that came to fruition at Crosstown. That involved numerous
financing partners on this. Is this different because
of the different pieces are handling
the financing? Or does this work
about the same? It’s actually different. Crosstown.. We weren’t involved with
Crosstown but we’re somewhat familiar with it just
because we keep up with that
kind of activity. It was a very
complex project. It’s a huge
project, first of all. You know, 800,000,
I think it was, square feet or
something like that. (June)
 Over a million. Various components. So, they had tax
credits, for example. They’re trying to use
historic tax credits, combining those two. Each set of tax credits has
their own rules and regulations. Combining tax credits is
challenging in of itself. The whole notion of
public-private use and the separation of private components
versus public components creates potential funding. So, theirs was much,
much more complicated. In our case, again with the
development partners we are working with, they will
bring financing to the table. And they will have to go through
their normal processes to get funding from the banks
and the investment sources that they
typically use. But it won’t be
quite as complicated. And just to make a
comment on June. Part of our strategy is to
get historic tax credits. So, we are certainly honoring
the historic character of the building. And part of that will hopefully
allow us to generate some additional tax
credits for the property. Alex, we talked about
this a bit before the show. If you look at the map of what
is happening around that parcel of crop regardless
of what it is there, this is like.. This is really like the piece of
a puzzle that kind of links all of those things together that
have been happening for some time on
the south end. Yeah, I mean we’ve
looked at the sort of.. We’re tracking the development
that’s occurring south of Beale street right now. And, you know, when
you look at Chisca, the brewery, sort of the
Front street corridor. You know, picture where
Gus’s Chicken is and, you know, where the distillery
is being built and there’s apartment
projects planned there. You sort of have this linking
of the C-B-D to South Main. And, you know, the Central
Station project sort of creates that link from the
river to South Main. Or even to the Horizon,
which is the big project that went dormant. It’s under
development now. And so, we’re excited about the
opportunity of creating sort of an anchor to the
South Main, you know, to the South Main
merchants that should. You know, it’s sort of the
new offerings for Downtown. I mean, we hear it
daily from our residents. Can you get us a movie
theater and a grocery store? I mean,
it’s just consistently. That’s what
people want. And I think it’s, you know,
it’s really a testament to where Downtown is in its
development right now. Ron, in terms of Amtrak,
are you talking with them? Are you involved
in talks with that? How does that work? Because there has been a lot of
talk over a lot of years about increasing
Amtrak service here. Amtrak will
remain there. They have a lease. And the property is been put in
place in such a way that there has to be rail there for
it to maintain its status. We have
talked with Amtrak. And, you know, as far as
them increasing service, you know, we’ll find
out in the future. What I’m more interested in is
up on top where the buses are and moving those down on the
Front street creating a new station for the trolleys and
connecting service for our disabled and
elderly customers. Those taking the buses down and
then being able to quickly get on the trolley at the trolley
station with a great venue. You know,
make it look really nice. And then they have access to
all of the amenities there, too. This will really
improve the quality of life, you know, in that
entire community there. And the trolley stop is at
the station as I understand it. Now you have
it on G.E. Patterson. And I believe the plan here is
to make a central trolley stop a little bit
further on Main street, on the Main street
side of the station. That’s our hopes if we
can combine the stations. We have to look at
the engineering. But yes, if we can take that
station out and combine that in to one station
there on Front street, you know, it would
be a trolley station, it would be for transit,
it would be for buses. Kind of multi-modal. Very easy for folks
to then, you know, even if they take
their bike or walk, to jump right on the
trolley or the bus to go where they
want to go. Right. And then Archie, when you
presented this to the finance committee at MATA, you talked
about kind of changing the access to the property. So that now, there would be
access in to the larger market area that includes the farmers’
market right off of that trolley stop there on Main. That’s correct. If you recall the
presentation, we.. One of the points
we make in this.. You might not think about it but
it’s pretty obvious if you do. The train station itself is
a barrier from the east to the west. So, if you’re on Main street,
how do you get west of that physical barrier? You literally have to
walk around the block. So, we’re trying to do
two different things. We want to create what we’re
calling Connector Concourse. That will be in an opened
area from Main street that will connect and go through under the
platform and connect to the what we call the market plaza on the
western part of the property. The same market plaza
will have an entry way off of G.E. Patterson. And if they’re able to
relocate the trolley stop, then that opens up that area by
the powerhouse and we’ll create what we think will be
a great civic space. And there will be a market
plaza where people can gather. People can gather
before they go to the movie, after the movie. Ideally we might get some retail
development under the platform. We can
work that out. It will be a great
connector there. But it just creates a great
space for people to gather and also provide that connectivity
down G.E. Patterson in to the market plaza
or through this concourse from Main street in to
the market plaza. June, the history of the
structure is pretty obvious. But talk to me about historic
preservation because I think sometimes people have the idea
that historic preservation is.. It has to stay exactly as it
is now with the same uses. And that’s not
the case at all. No, not at all. And actually in most cases, it’s
adaptive reuse of something that the building
was not used for. And I totally understand
that this is a modal situation because of the
trains and the Amtrak. The building itself is
a wonderful building. It is a landmark for
that corner of South Main, of course. And using it this way in a
pedestrian urban design is going   to make that building a
much more effective building. You’re not really
changing the building. You’re changing
what’s around it, if you will. You’re adding things to it
but not in a distractive way, not in a
detrimental way. And I think that’s
the key to good design. And I think they’ve come up
with a really good design where they’re not covering
up the building with what their
additions are. There’s a lot of transparency,
visual transparency. And I think it will be a
real boom for South Main. I’ll put you
on the spot. Roughly how many
residential units, or I don’t know how
you would count it, are going in that
South Main area right now? New, underway. I mean,
is it hundreds? Is it thousands? I mean, if people
haven’t driven down there, it’s pretty. If you go past, I guess that
would be to the south of Central Station, there’s a huge amount
of apartments going in there. Again, we talked
about the Horizon. What are
the numbers? So, if you go from Crump to
Beale street and from Riverside to essentially,
let’s go to Second, because you made.. There’s a development that’s
occurring right there where Happy Mexican
restaurant is. And if you include what we have
planned at Central Station in terms of the
additional apartments, it’s around 1,150 new
residential units in that area. And then
Turley Company. Henry Turley obviously
developed Harbor Town, much of Harbor Town. But then other
developers get involved. I mean, is that
sort of what happens? This sort of virtuous circle
from your point of view or from the residents’ point of view,
more people begets more people? And we like when more
developers come in and, you know, develop
projects Downtown, for sure. Moving slightly to, I guess
that would be to the east. The, I guess, really last of
the big housing projects is still there. Your company has been involved
with the redevelopments of all but one, I think we
said before the show, of the big
redevelopments. So, the one next to
Methodist Hospital or at the
corner of Lamar. I mean, the really blighted
properties that were there are now these
really quite lovely. I mean, for lack
of a better word. And you all have been
part of the financing, public – private
partnership. What is the status
of the one that is? What is it
called again? Foote Homes, thank you. It was on deck that it was going
to be demolished and rebuilt. There was some
community opposition. Their funding
is never easy. It was a recession. What’s the
status of that? The current status is actually
the housing authority issued an R-F-Q for a new
developer last year. They chose McCormack Baron
Salazar out of Saint Louis, which actually where our
partners on developing of the University Place, the
former Lamar Terrace, and Legends Park, the
former Dixie Homes. So, the application was
submitted for a Choice Neighborhood grant. Choice Neighborhoods is the
successor program to Hope Six under the
Obama administration. So, it’s a very similar concept
except Choice is a much more expansive project. It requires that you do more in
the surrounding community than was required under Hope Six
where you really just focused on the public housing site. So, that application was
submitted in February. The city and the housing
authority issued here back on the short listing in July if
keeps to their timetable with final selection
in September. So, if that comes to fruition,
then that will begin the process of the transformation
of Foote Homes, which will fit nicely in to
everything we’re talking about now in terms of Central Station
to really take the development eastward to meet the
Caliborne Homes site, which is not Heritage
Landing, which has already been developed. And Ron, back to
MATA for a second. I mean, some folks may
be watching and still go, wait, the head of MATA
is on and they’ve got, you know, struggling with
the trolleys right now and challenges. You’ve been at the job six
months and you’ve talked about challenges with, you know,
how do you serve a really big metropolis with bus service when
your funding has been shrinking. Again, this is for
MATA’s point of view. And I’m just looking
at the presentation to the finance board. It relieves, you know, provides
ongoing revenue to MATA. It relieves a
debt obligation. Is that correct? I mean, again, to repeat, it
gets you out of the business. Not in to the
business of planning. There’s a number
of things, Eric. One, we do have some maintenance
that needs to be done on the facility that we
can’t afford to do. We do have debt service on the
facility that we cannot pay back right now. So, you know, Archie and the
Turley group coming in and doing this helps us focus on transit
and put our monies what would be the greatest use for getting
people where they need to go in Memphis. And we’ve talked
about the trolleys. We’re taping
this on Wednesday. The show obviously plays on
Friday and over the weekend. You’ve got changes
happening with the trolleys. Give us an update
on the trolleys. People ask when will
the trolleys be back. When will service be
restored, etcetera. Well, Memphis in May is
right around the corner. We’ve been working with our
engineers looking at the area of the mall where the buses
and the trolleys don’t go. So, how do we get that to
work for the businesses? So, what we’ve done is we’ve
trained all of our operators. We’ve got new
signs going up. We’ve had the
engineers look at it. And we’re getting ready to do a
press release today to put the buses back on the mall and to
make them integrate with the rest of the buses that
simulate trolley service. And we’re working on getting
some other vehicles so that when there’s crush loads, we can
have additional capacity to make Memphis in May and the
opening of Bass Pro Shop, working all those things. And before the
trolleys were shut down, roughly how many people rode the
trolleys every year Downtown? It varied from
year to year. I think last year
it was 1.1 million. People think of it as a
little bit of a tourist.. And it is. There are tourists
on there and so on. But it’s also
become clear, it seems, to the South Main merchants and
all the Main street merchants, Downtown merchants. They really rely on those
trolleys to generate business and I guess then
generate tax revenue. So, it’s not just
a novelty item. No, it’s not, Eric. And I’ll just say
this one thing. If we can do what we need to
do and what we want to do, we can bring service back
in such a way that ridership is tripled. Three million folks. And then bring businesses
customers in such a way that it would really bring economic
viability back in a big way to Downtown. And go ahead. Are these the green buses that
we’ve been seeing that you’re talking about on the
mall during this run? Okay. And is this going to start
in May or is it going to start late April? We’re starting
on April 12th. So, this weekend. Let me switch back to the train
station and the assembly of the partners here, the selection
of the partners in all of this. Because these are companies
that are bedrock Memphis. The three players that
we’re talking about. The Wilson
companies, the Canale family, as well as — who
am I leaving out? Kemmons Wilson
companies. The Malco, too. I knew it
would come to me. So.. (June)
 And the Turley family. And the Turley family. Exactly. This is really aside from the
art of the deal here though. These Memphis companies being
involved really speaks to kind of a moment in our
development, I think. I agree. I think it’s a testament to sort
of what’s happening Downtown. And, you know, the fact that
our residential population has gotten to this point. And, you know, where
these companies that, as you said, I mean, we’re
talking hundred-year-old companies, etcetera, are
investing in this project. And it’s very exciting. We definitely think that dynamic
is important and notable. June. Well, and to mention one of
the things that we’ve seen in preservation situations in
Memphis is if you look at the success stories
we’ve had with Broad, Overton Square, what
we will see Downtown, it’s local investment. It’s local individuals that
understand our city and know what its citizens want. It’s Billy Orgel
buying the Brewery. You know, it’s not.. I don’t want to say we
don’t want outside money. We do. But we, as concerned about how
our city stays in some ways, locals get it. Some people
coming in do. But I’m just so grateful that
the local bedrocks are behind this type of program because it
makes us feel in a preservation and thinking about
historic properties as being
valuable again. And I think that’s tremendously
important to our city. We just have about
four minutes left. You’ve got news in the sense
that Memphis Heritage for the first time will be.. You’re raising
money to do grants. Talk real quickly
about what that involves. Well, we’re very fortunate. We received a
million dollar donation. We plan on raising three million
for the new century fund. And our game plan is to
fund programs so that we’re preventing things as opposed to
addressing emergency situations. Right now the board decided to
jump in instead of waiting until we had the full three
million and support MemFix, which we feel
bang for the buck. They’re always in
historic neighborhoods. They look at potential. They show people what can happen
in a certain area of our city. And so, we are partnering
with MemFix going forward on their projects. MemFix actually in
the Pinch this weekend. On Saturday the 11th is
our first program that we’re collaborating
with MemFix on. And what happens
with the Pinch? There’s talk of it
losing its historic status. It’s been stuck in the limbo
of the shadow of the limbo of Bass Pro. Thanks to Lee Harris,
Senator Lee Harris, it will not be taken off
the national register. Now it won’t be addressed in
Nashville so therefore it will just be there. And we’re very grateful because
that means the owners of those properties can apply for
historic tax credits if they go in to renovation. And is that your next,
sort of, priority area? Or is that fair to say? I think it’s a very important
area and I think what we’ve seen is we need to
maintain what’s still there. We lost so much when
the Pyramid was built. There was no control on
people saying I want to surface parking lot. So, I think we need to say
to the merchants and business owners and property
owners, you are important. And it kind of gets back to that
pedestrian bridge thing where we’re trying to get people
in to the Pinch to see that historic value. From a developer
point of view, I mean, is the Pinch.. What are developers
saying about the Pinch? They still need to
see Bass Pro open. Do they need to see a
connector between the Bass Pro and the Pinch district? I mean, is it still just too
uncertain for development to really happen there? Yeah, I think, as
you said, Bass Pro, you know, sort of, the fact
that Bass Pro is facing south, you know, the
entrance that we can see, makes us look at the
Pinch as, you know, an area that should
develop organically. It’s how I would see it. Well, like Broad
street perhaps. You know, but at the same time,
I see potential there because a lot of developers like
blank spaces to work in. And you’ve certainly got a lot
of blank spaces in that area. What about, again from a
development point of view and maybe from finance, one
thing that hasn’t done real well Downtown is office. Paul Morris from Downtown
Memphis was on recently. He said, well,
at the very least, we’ve stopped losing. But a lot of office space
has moved out to the kind of Ridgeway – Poplar. What’s your
take on that? How does that
change or can it? Our future opportunity should
be around attracting different kinds of
companies Downtown. You know,
you think of the start co’s. And it was covered
recently in an article. It’s the, you know, the
Archer Malmo’s of the world. You know, those types of
smaller companies that, you know, are trying to
attract millennial folks to come work there. I think that, you know,
developments like Central Station help in that effort to
attract those kinds of companies Downtown if
that makes sense. Yeah, it does. I think we’ll
leave it there. Thank you all
for being here. Alex Turley, June West,
Ron Garrison, Archie Willis. Thank you all. Thank you, Bill. Thank you
for joining us. Join us again next week. [theme music] (male announcer)
 Funding for
 “Behind the Headlines” is  provided by
 D-H-G and Advisors.  D-H-G is a full service
 accounting firm serving Memphis  and the Mid-South region for
 more than 60 years combining  community involvement
 with the technical resources  of a national firm.  For more information,
 visit DHGLLP.com. CLOSED CAPTIONING PROVIDED
BY W-K-N-O, MEMPHIS.  

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