Behind the Headlines — February 19, 2016

Behind the Headlines — February 19, 2016


– [Voiceover]
Production funding for Behind The Headlines is
made possible in part by, – [Voiceover] The Bartlett
Area Chamber of Commerce and it’s member company,
Ewing Kessler Incorporated. Providing mechanical
and building control solutions for
sustainable, energy efficient building performances. This privately owned
regional company is committed to
relationships and service responsive
to clients’ needs. Learn more at ewingkessler.com
and ekautomation.com. – [Voiceover] The
WKNO Production Fund, the WKNO Endowment Fund,
and by viewers like you. Thank you. – The revitalization
of the Medical District tonight on Behind The Headlines. (dramatic orchestral music) I’m Eric Barnes, publisher
of the Memphis Daily News, thanks for joining us. I’m joined tonight
by Tommy Pacello, who’s the president
of the newly formed Medical District Collaborative,
thanks for being here. – Thank’s Eric. – [Voiceover] Gary Shorb,
CEO of Methodist Le Bonheur, thanks for being here. – Thank you. – [Voiceover] Ken Brown is
Executive Vice Chancellor of the UT Health Sciences
Center, thanks for being here. – Thank you, thank you. – [Voiceover] Along
with Bill Dries, Senior Reporter with
the Memphis Daily News. So we’ll get all
your perspective on your vision and why
you’re involved in this. But I’ma start with you
Tommy and we’ve got some maps that kind of
define the area and define the area
we’re talking about. These two gentlemen represent a couple of the
institutions involved, but a whole lot of
prominent institutions in the area are involved
in this collaborative. So let’s define the
area and then we’ll get into the vision
and the changes and some of the problems
you hope to address. So, talk about the institutions
involved, let’s start there. – Sure absolutely. The area generally runs
from about Cleveland to Danny Thomas and Avants,
approximately North Parkway, But it also includes
an area around the Pinch District to
bring in Saint Jude. And within that area, it’s about two and a half square
miles, there are eight major institutions that
are involved in this effort So, in addition to Methodist
and University of Tennessee, there’s also Regional
One Healthcare, there’s Baptist College
of Health Sciences, there is Saint Jude and ALSAC, Bioworks, Southwest
Tennessee Community College, Southern College of Optometry. And they make up
about 16,000 employees and about 8,000 students. And collectively represent
about a 2.7 billion dollar operating budget
within the district. – [Voiceover] It’s
an amazing thing, I drive through there every day, I work downtown,
I live in Midtown and you don’t think
about it because, in part, the area is,
with some exceptions, is not the most attractive
area in Memphis. You know, and that is part of– it’s more than
attractiveness but that’s part of what you’re after right? Because people don’t
really live there, there are only a handful
of restaurants there, and yet you’ve got all these
employees and students. So talk a little bit about how you became involved and so on. – You’re right and I
think that we see this even more so now
because downtown Memphis has gone on this
upward trajectory and Midtown has
been waking up with Overton Square and Crosstown
and all the neighborhoods beginning to click on
all cylinders really with Broad Avenue and
Cooper Young etcetera. The Medical District
which had been primarily a place that
people drove through and unless you
were working there or had a reason to be
there, you weren’t exposed to all the really great
stuff that was happening within the campuses themselves. So the idea behind
this work is how do we turn this pasture area
into this really vital linchpin that connects
the Downtown and Midtown? The campuses, the
institutions that are there, have done a remarkable
job on the campuses. So now the effort is to
say how do we leverage that investment and to fill in the
gaps between the campuses? – And Ken Brown, we were talking a little bit before
the show about how you got involved and
I think what you told me is that you all were
doing your master plan and had some public meetings
and pick the story from there. – Yeah, we were
doing our master plan which was long overdue for
the University of Tennessee. But to our surprise in
some of our public forums, Region One was doing
their master plan. You know, Gary and
the work at Methodist and Le Bonheur they stay in
a planning phase if you will. And so for the institutions to have the opportunity
to collaborate and we all move to a
level of transparency where I share my
master plan with Gary and Mary at Le Bonheur
and Dr. Coopwood at Region One. And it was really
interesting because they kinda shared
their master plans. So we realized that
our visions really were almost in sync as it relates
to the Medical District. The timing of it was remarkable because about the
same time, Pitt Hyde and the Hyde
Foundation were looking at revitalization of
the Medical District. And we were very
very fortunate to get a group U3 that was brought
in by the Hyde Foundation to really bring those
conversations together. – And you work for U3 as well as being president, or
you’re an adviser? – A bit of a
transitional period now– – [Voiceover] A
transitional period, okay. – but I have been
working with U3 as a special project
manager focusing exclusively on the
Memphis project. – And U3 was involved
with transformations, revitalizations in Philadelphia,
Detroit, is that correct? – Right, correct. So– – [Voiceover] So there’s some precedent for this
sort of thing. – And they really are a
real estate advisory company that specializes on
institutional real
estate strategies. And within that is an
effort to think about how do you leverage
the anchor institutions to build communities
back around them. And that was exhibited,
as you mentioned, in West Philadelphia
around Penn, around the Penn Hospital System and around Drexel
with a group called the University City
Development Corperation. And then again, most
recently in Detroit, with Midtown Detroit Inc. Working with Henry
Ford Hospital, Detroit Medical Center,
and Wayne State. Remarkable results in
both of those situations doing exactly that same type of an effort that
we’re applying here. – Right, Gary you
all got involved– you were happy to get
involved, tell me how Methodist and Le
Bonheur got involved. – Yeah we were delighted
to get involved. We, as Ken said,
we’ve had master plans for our various campuses. Le Bonheur, obviously, is a
350 million dollar investment. We’re getting ready to
make 300 million dollar investment in
University Hospital. So the more vibrant we can
make the medical center, the better off we’re gonna
be with those investments. And we had had a working
group for some years trying to work on
things like security and Ken’s really led
the charge on that. Parking and some
other issues around making the medical
center greener. But we didn’t have a
template or a plan, anything that would
compare with what U3 brought to the table
with their Detroit and Philadelphia experience. So, we were delighted
The Hyde Foundation made the investment
and now we’re making our own investments. – Is there an angle
at which it’s also, sort of, a business investment? I mean I know
Methodist Le Bonheur is non-profit, but you
have a bottom line, you have a budget
to make and so on. But you’re trying to recruit. You’re trying to
recruit Ken’s students and students from other, new
employees from other places. Is that part of, I
mean, if anyone has ever been in the new Le Bonheur
hospital it’s beautiful. I mean it’s an amazing
place and amazing people. You step outside it’s iffy. And is that part of it
just from a pure business point of view of
recruitment and retention that you felt like you needed to improve the area around it? – Oh definitely, absolutely. We want people to
feel safe when they come into the medical center. We want them to
feel like they are a part of a vibrant, diverse,
sustainable part of our city. And this plan will create
that, which is great. But the talent
issue is also huge. It’d be wonderful to have
more of our employees, and we’ve got
about 6,000 working in the medical center,
living there too. Working there, playing there. – We’ll put a map up that
shows where that difference– you know the numbers
Tommy in terms of, you may have already said it, but it’s something
around only two percent of the people who work
in the Medical District live in that area. – Well, right about three
percent of the employees of these institutions
collectively live
in the district and about six percent of the
students live in the district. But, the interesting
thing is that when you actually look at
the maps and see where they’re living, they’re
choosing to live very close by. So they’re living in Downtown,
they’re living in Midtown. And the housing that’s
in the district today, that housing that
is where a student and the employees
may want to live is at 98 percent occupancy. So you have a really high
occupancy rate in the district. So we actually have a bit of a supply issue of quality housing. That’s something
that we can work on relatively quickly
to help provide. – [Voiceover] Alright, Bill. – And that’s kinda
the question that I want to start with
is in assembling this plan, you’re looking
at the land available that you’ve got and you’re
looking for investors to do things like
housing and retail and something other
than the current uses. What kind of potential or
what kind of an inventory is there within the district
for those opportunities? – It’s a good question
and anytime you’re doing urban infill development,
the land assembly can be somewhat challenging. But one thing that
we think is a great– we look at it as a huge
potential for the district is the fact that we
have about 110 acres of surface parking
lots or vacant land that are actually owned
by the institutions. And those create opportunities to then develop
partnerships between the institutions,
private sector developers to see this
development take place. – For the University
of Tennessee, Ken, describe for me kind of
what you’re looking for in terms of your students
and your employees in the area where the University
of Tennessee is currently. – I want to pick up on
a point that Gary made. We probably are in the
midst of 350 million dollars of capital construction over
the last three to five years. That’s a huge investment
on the behalf of the state, long overdue, but nonetheless
a huge investment. We’ve got 3,500 students
roughly every year. We’ve got roughly
3,500 employees. We’ve got joint practice plan ventures with Gary
and Region One. So, 100 percent of the
physicians in Region One, 100 percent of the
physicians in Le Bonheur are University of Tennessee
faculty affiliates. So we recruit
residents nationally. The competition to
recruit these people into this environment
is extremely intense. So, we’re recruiting and
competing with our competitors nationally to get really
really high end people. And for most people
it isn’t about how much money you pay them, it’s about the environment
that they have to live in. And when people come into the
Medical District our students, and even though our
students have been to undergraduate institutions, most of ’em they’re coming
to professional school now. They still have moms
and dads who still wanna know where’s he gonna
live, where’s he gonna stay? And it’s a horrible
answer for me to give, I don’t really know, he can
move down on Mud Island, there are plenty
of places around. But, if we had that capacity
in the Medical District, residential capacity,
we have no doubt our students would
stay on campus. That district is among the
safest places in Memphis. We report our crime statistics
to the Clery Report, our crime on campus is
almost a virtual nil. And so, having a
residential community and we’ve done probably
6, 8 million dollars worth of demolition,
old buildings that have been offline for 18 years. So we’ve got the
land capacity for a developer to come
in, work out the terms of the land lease with
us as a state entity, to build those
residential communities for our faculty, our
staff, our students, the basic scientists
that we recruit, the physicians that we
jointly recruit into Region One and
Methodist Le Bonheur. – And Gary, from your
standpoint at Methodist, what does this planning add– I mean you’ve already
got very ambitious plans that you’ve already
outlined for the campus. Are there those kind
of opportunities like Ken talked about to
look at what you’ve done and maybe change some
things in that regard? – Yeah there are. Just using the parking
example Tommy highlighted. We’ve got about four
acres of surface parking near our professional building
just off of Union Avenue. We’re building a 700
car parking garage with this new hospital complex. One thought is, we
get those cars off of that surface lot into
the parking garage then we can use that four acres to have another Bristol
apartment building that’s right there
on Union and that’s 100 percent occupied right now. So the demand is
there, if we can just create the various
residential opportunites it’s gonna be, we’re gonna
have a lot of success. – And I think we’re
doing the same strategy as a part of this
conjoined effort. Taking some surface lot space, old buildings that
have been offline. Between Madison and
Jefferson we’ve got literally a city block that
in the next three years can be completely, the
existing structures, completely demolished
and the flat lot parking used to build some
residential complex. – And we’ve seen so
much construction in that historic
medical center area that I would imagine
that the temptation is so great and the
momentum so great for all the
institutions to keep on making their plans
and doing what they’ve been doing
for decades now until someone finally
said, wait a minute, there’s an opportunity to take
a more total look at this. – Yeah, well the
parking thing is a very interesting piece
of the equation because we all have our separate and independent
parking strategies. And if you look at Le
Bonheur, Region One, and the University
we all have a lot of parking in the
Medical District. But, it isn’t
convenient parking where the parking lot is most
convenient for us to use. It may be misplaced
at some distant point. So you have people walking from distances, great
distances in some cases, from their parking
to where they work at only because the property
that their entity happens to own is a
great distance away. And so just having a
conjoined parking strategy for how we’re gonna manage
parking collectively in the Medical
District would be huge. – You talked,
Gary, in an article we did about the collaborative and I don’t want
to pin this on you, but you were very honest
and it was an interesting quote about “As an
anchor we’ve been buying properties for years as
a way to target blight, but we are unintentionally
dragging down property values.” Talk a little bit about that. Anybody who knows
Methodist Le Bonheur knows you’re work, knows that
that’s not your style. You’re a very civic
minded person, but you unintentionally
kind of contributed to the blight, talk
about that a little bit. – Well, because we
haven’t had a plan, it’s been more of a
defensive strategy. When problem properties
come on a tax sale, we’ll go and we’ll buy ’em
for a few thousand dollars and, unfortunately, the
condition of the housing would warrant just a
tear down of a strategy. So that is not helping
anything in terms of building more capacity for
housing in the Medical District. So we needed a plan. And back to Ken’s
point, it was just so opportunistic
that we have U3, who’s done this in
two other cities, come and say look, we know how to put this together
and we can help ya. – And to be clear for
anyone who’s listening, Methodist is not getting
into the residential apartment business, I
assume, just so that’s– – No, no, no, we do
not want to do that. – [Voiceover] Yeah, and
nor does the university. – And to your point,
you’re not going to be putting skilled physicians
and surgeons into dorms. So talk a little bit
about the partnerships and how you get
housing done when you got land, but
you obviously don’t want to build
apartment complexes. – Well part of the challenge is you’ve got to put
together a quantity of land in order to
attract developers. And that’s where we’re
looking for Tommy and U3 to really
start prioritizing. Where are those
opportunities the most likely to occur,
what’s it gonna take? And then we’ll just
phase it as we go along. – [Voiceover] You
wanna address that? – Yeah I be’d happy to. One of the things
that we’ve seen whether you’re talking
about in Philadelphia or whether you’re
talking about Detroit is you have to have that
backbone organization the backbone organization
that connects the dots between
these opportunities that are present with
the anchor institutions and then develops the
strategies on fill them back in. So to Ken’s point about
the parking strategy, to Gary’s point about
this vacant land, one of the things
that the organization is able to do is then
to begin to sort of package those items
together and think about how do we work to create
that additional supply and we can build
the partnerships with the private
sector developers. How do we then also help to increase demand in the district? One of the things that
we’re looking at is, and that worked very
successfully in Detroit, is employee incentives to
live closer to the district. – How does that work? – Well, in Detroit,
a fund was raised and by the employers and
as well as philanthropy. And the employees
of the district were offered
incentives to either buy a house in the
district, to move in, or to lease in the district. And we’re exploring
what some things might look like in Memphis
and how it applies here. It’s not a direct comparison. Detroit had a lot more
vacancy than we have. And our issue is more
of a supply issue. But it’s an example
of how you can take really an input into the
anchoring organizations through their employees,
through their real estate, through the dollars
that they’re spending and refocus them
a little bit more so that you can
increase both the demand while you’re planning
for the supply. – We’re talking about incentives and someone watching
the show will be saying, well they’re gonna want
money from the city and the county and
they’re gonna want tax incentives and so on. Good thing or bad,
there’s somebody watching who’s gonna think that, who
has questions about that. Is that part of this,
are their tax incentives to get people to come
in and build and so on? – Not by our organization. – [Voiceover] Okay. – The Downtown
Memphis Commission and others, they exist
to and one of reasons– the things that they
are able to provide are these types of tax
incentives and pilots and so forth and so on. Our budget and our organization is made up by these guys. By the institutions as well as by philanthropy coming together. – [Voiceover] Okay, okay. Bill. – But infrastructure, which
is the publicly financed part of this, the
streets and roads and the transit
systems seem to be inherently a part of this as you change the way the
people get around. You change where
they park, you change the distance that they
have to walk here. – And the benefit of
the city’s investment or the county’s investment
in that infrastructure is now your tax base is
completely different tax base than what
it is right now. In terms of people
living in the district. – [Voiceover] And what you– – Well you all invest, I’m
sorry to interrupt you, but you all invest, I
think I saw an article, literally streetscapes
and signage. Is there any part of
you that’s a little frustrated that the city or
county just doesn’t do it that you all have
to take that on? Or is that just the
world we live in now? – Well I think that part of what we have to do in this district to increase the
opportunity for investment is we have to be brilliant
on the basics, right. So we have to make sure that a district that has
seen disinvestment over the past several years,
not talking about the campuses, but it’s basically
between the campuses. Has that same level
of care in looks like the district or else people
will not be investing. Now, I think that
what we’ll be doing is you’ll see partnerships
with the city. So making sure that– there are nine major
infrastructure projects planned in the district
that will either start to be designed or start to be implemented in
the next three years. This works as a public
private partnership. This city puts in the
public infrastructure and then the private
sector builds up to it. For years, if you do
it in the right way, there’s a high
return on investment for both parties in
doing it that way. – And just a quick answer. I don’t really find
myself frustrated that the city
really doesn’t have the resources to
invest in everything. They have a huge responsibility. It’s like the park,
Health Sciences Park, in the nucleus of our campus. We have a lease with
the city for that park. We maintain it, we cut
the grass, we keep it up. The city has lots of parks. And I’m sure they’d
like to maintain them all at the same level. The fact that
they’ve got a finite amount of resources
to be able to do that doesn’t negate my responsibility to maintain that park in
the nucleus of my campus. And so, we’re very
very happy that the city was willing to lease us the park so that
we can maintain it. So, it is a
partnership, you know? – Yeah, we’ve got that
same attitude too. Eric, I mean we’re
ready to take over, via Le Bonheur, one of
the other public parks. You’ve gotta work
through the process with the city, but they’ve
kind of set the stage for that. As well as we know
with what we want to do in improvement
in the overall look of the medical center,
we’ll have to make some investments in trash cans and benches and other
amenities, if you will, to really class it up and
we’re ready to do that. – Five minutes left,
Saint Jude came out in late last year in
a massive investment that they’re putting in. How does that impact this,
I assume for the better, but how is that– the level of investment
they’re putting in, which everyone
kind of heard that there was gonna be investment, but it was I think more
than people expected. Did that change things or
just accelerate this or? – I think it certainly
helps to make the case for the need for
additional residential development in the area. It’s one of the most meaningful economic development
announcements that have come out
in a long time. 2000 additional employees
being hired in short order, and they’re gonna
need a place to live. And they’re coming in
from, in many cases, from outside of Memphis. – Right, and the Pinch District,
that’s been so beat up. The mothballing of the pyramid, focusing on other
areas of downtown, what role do you all
play, I guess I’ll start with you, with the
Pinch District, if any? – So our area, and
if you see the map so that you’ll notice it extends around the Pinch District
up in Front Street so that we have a
good buffer around Saint Jude and
what they’re doing. And what we’re seeing
is that Saint Jude is going to be expanding beyond their current campus boundaries. That will begin to
trigger, we think, quite a bit of development
in the Pinch District. Recently, there’s
been some studies that have been done
in the Pinch District about a planning effort
soon to be underway there with the DMC and we’re engaged in all of those conversations. (crosstalk) And how does that then link with the core of the
Medical District? Along the Alabama corridor? And then also link into
the rest of Downtown. And those linkages are
incredibly important. And also begin to help give us
the momentum to close the gap between Saint Jude
and Le Bonheur and the core of the
Medical District. – Yeah, okay, Bill. – Will the organization
that you’re involved with, at some point, ride heard,
for lack of a better term, over a tiff or some kind
of financing district? – Um, well we haven’t
gotten into that yet, that’s not something that
we’re digging into right now. We certainly are not cut out to be a group that
would administering any sort of tax
incentives, we don’t have that type of
relationship, we’re not that type of an organization. So, to that end,
I don’t know that that’s our involvement. Of course we would
love to see some type of incentives offered
within the district especially as it
would promote quality, affordable housing
in the district. But not something that
we would be running. – What I will say though Bill is that everyday I get calls
from the private sector. As I’m sure Tommy
and Gary do too. You know the private
sector’s been remarkably responsive
to this effort. There are developers
knockin’ on the door every day that are
expressing interest in developing these properties and I would imagine
along the financing and tax incentive
line that there’re organizations
that’ll be coming out of the woodwork in
supporting this effort. And to your question
about the Pinch District, Any vibrancy from where ever,
we see it as a positive. – Just a couple minutes
left, this will be successful x years down
the road if what happens? If you look back
five years, what do you want to see differently? – Well if we improve the image of the medical
center, that would be something equal to what
we see at Overton Square. And if we have, I don’t know
what percentage to draw out, but a percentage of
my employee population now living in the
Medical District and biking to work and
going to restaurants and shopping in the
Medical District, that’s success to me. – Yeah, same question to you. – That billion dollar
economic impact that our faculty
and students have I’d like the concentration of it to be in the Medical
District in terms of living, restaurants, shopping, having those amenities, improve
the local transportation so that they can move
from the Medical District to Overton Square, to Downtown. We should have a robust
public transportation system. And when people look
at moving to cities and living in communities, those are the things
that they look for. – We have 15 seconds, thoughts– actually you agree
with those two things anything else that you would add that you would look
back five years and say I’m glad we
got that part done? – Yeah, one thing
I would say is that this is a marathon
it’s not a sprint. And at 20 years on and
West Philly there’s still work to do and while
we’re gonna start seeing changes very soon, it’s
gonna be a long process. – Alright, thank you
all for being here, thank you for joining us, join us again next
week, good night. (dramatic orchestral music) – [Voiceover] Support
for Behind The Headlines is provided in part by, – [Voiceover] The Bartlett
Area Chamber of Commerce and it’s member company
Ewing Kessler Incorporated. Providing mechanical
and building control solutions for
sustainable, energy efficient building performances. This privately owned
regional company is committed to
relationships and service responsive
to clients’ needs. Learn more at ewingkessler.com
and ekautomation.com. (guitar strum)

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