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- The continued transformation of the Medical District, tonight on Behind The Headlnes.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian, and thanks for joining us.

I am joined tonight by two members of the team of the Memphis Medical District Collaborative.

Rory Thomas, you're the new president as of a couple months ago of the Memphis Medical District Collaborative.

Thanks for being here.

- Thank you for having me.

- And Ben Schulman, you are the director of real estate for Memphis Medical District Collaborative, which from here on out we will call MMDC.

- Much easier.

- Yeah.

And Bill Dries is a reporter with The Daily Memphian.

The Medical District, we had your predecessor, Tommy Pacello, talking a little bit earlier who tragically passed at far too young an age during last fall.

But the District, we had them on a number of times talking about even before MMDC was formed or when it was first formed.

Rory let's do the quick sort of 30 second or so, what is MMDC?

We'll talk about some things you've got going on.

We'll talk obviously more about the depth and sort of reach and the various programs of MMDC, but how, you're stuck in an elevator.

How do you describe what you do?

- Well first, thanks for having us.

And really grateful for the foundation that Tommy and prior team members laid for the organization.

But just a quick elevator pitch of the Medical District Collaborative, we are a nonprofit that uses an anchor strategy so our medical institutions and educational institutions to make the district more vibrant, prosperous and equitable for everyone.

So we are a catalyst in real estate, workforce and so many other initiatives to make the district better.

And so many great things have happened over the prior five years with Tommy and the team, and look forward to making the next five years even more prosperous.

- And it kind of works in no small part because it is the partners of the big institutions, right?

You name them because I'll leave somebody out.

- Well, 100%.

So you have your medical institutions.

So Methodist, Baptist, St. Jude.

You also have educational institutions such as Southwest, Baptist Health Sciences University, Southern College of Optometry.

Those are key partners as well.

UT is involved as well too.

So really those entities coming together.

Not saying it is just competition, but to collaborate, to make the district better for the community is really something and it took a lot of vision from, you know, the Hyde Foundation and other foundations and partners to really make that happen.

- Right, and St. Jude is a partner and, cause I put you on the spot there, and also I still call them The Med, but Regional One is also a partner.

- Yes, Regional One.

- Absolutely.

- And definitely that the chair of the board, this year is Dr. Coopwood as well, and kind of what the anchor strategy is, you know, you can't pick up these big hospitals and institutions and move them, they're anchored into the Medical District.

So Regional One be over there a little bit later today.

- Yeah.

And then a big part of what is going on, I mean, it's the thing that people see and that maybe they first experience other than the hospitals and the institutions, is the real estate there.

And I remember, you know, when MMDC was first being formed and Gary Shore, the former president of Methodist was on, and he and Tommy were talking about it.

And you realize that there were all these people, tens of thousands of people who work in this district, a tiny fraction who lived there, a tiny, tiny number of things as simple as restaurants.

And all this space, all this real estate that much of it surface parking lots that were wildly under utilized, there were park spaces and a lot of abandoned but cool old buildings.

So talk about, real estate is a, I mean, this is about people and it's about how we live, but real estate is essential to that.

- Yeah, absolutely.

Really what MMDC's real estate program is intended to do is expand the ecosystem of developers who are investing, building and working in the district.

And as a result of that, it's really about stitching together the fabric through a cultural, social, economic, and the built environment fabric as well, through real estate development, urban redevelopment.

So it's working it through a look at what the needs are of the individual neighborhoods within the Medical District and how those can be developed in concert with some of the institutional expansions that are a foot as well.

- And we're talking about a space before I go to Bill, that goes all the way from Poplar and beyond where Methodist Le Bonheur, that image really badly over to where on Union where UTHSC is and Southwest is and all over there down into the, even to reaching towards the Pinch District, right, and St. Jude.

And probably, but just to give people a sense of the scale, it's not just the narrowest footprint of where the hospitals are, it's the broader neighborhood.

Bill, let me bring you.

- So people who have been through the Medical District have seen the demolition work on some buildings that have been there a long time, maybe since the '60s or '70s.

And this is mainly along Jefferson, west of Manassas.

Is that part of this plan?

- So the demolition that we see along Jefferson is part of the Orleans Station developments.

That is being led by UTHSC and developed by the Henry Turley Company with ComCap Partners.

And that project will deliver 372 residential units to the district, as well as 16,000 square feet of commercial space.

So really that is going to be a very catalytic project.

And when you deliver that degree of density into an area, that's really going to portend that the Medical District is a destination to itself and a 24/7 community, no longer a passthrough between downtown and midtown.

- So Rory, when 372 units come into that area, those are people who, some of them will be working in the Medical District.

- Right.

- But they will also be consumers in an area that doesn't have a lot of retail at this point.

So what does this do to the concept of the Medical District?

- Well, first it's being mentioned, it makes it a destination.

So coming in, looking at it, people looked at, you know, going downtown for, you know, live, work and play in the midtown for same thing as well and the Medical District was more of a passthrough.

It's been mentioned, it makes it more of a destination now.

So you're going to be able to have employees living in those apartments, you're going to be able to have students that go to the area colleges and universities to live in those apartments.

Now you're going to have even more of a, you know, not just the after hour side of things.

So when people get off, hey, they'll be able to go to retail, be able to of course purchase goods and services, restaurant, so it's really gonna be a game changer.

So I think it covers maybe 10 acres.

So it'd be a big game changer for the Medical District.

And hopefully that will be a catalyst for even more development and especially with the new Medical District investment fund that we recently announced as well.

- Ben, in some ways, it feels like the Medical District is this kind of Rubik's cube and you're trying to rearrange this to make it work a different way.

Was there any kind of comprehensive plan for this area that you've been able to find other than, oh, okay, we need parking so let's do a surface parking lot next to the building that we have?

- So there's no comprehensive plan for the Medical District itself.

Some of the things that we engage in, certainly taking cues from Memphis 3.0 and its credo of building up not out, and then directly conducting small area plans with our anchor institutions and neighborhood stakeholders to really understand the nuances of what is needed particular to each neighborhood.

And then that becomes the thing that we can respond to, to compliment some of the larger public investments and initiatives.

Like for example, the mConnect bus rapid transit line that's proposed for Union Avenue.

So everything is working in concert with one another.

- Right, and that's a bus line that will connect downtown to the University of Memphis with Union and Poplar being the main east-west corridors for that.

Before I send it back to Eric, Rory, let's talk about St. Jude being included in this.

And the Medical District, although we don't think of it, the Medical District for these purposes, does it also include the Alabama Street corridor that is between St. Jude and Methodist Le Bonheur and Le Bonheur is getting ready to do a massive expansion over there?

- Oh yes, and that is critically important as well.

As you think about a lot of the major surgeries as well that St. Jude patients have, they also take place at Le Bonheur.

So that is a critical area for us to continue to redevelop and really important to have that as part of the district.

And that, you know, we've seen the Edge District and other parts grow but that is definitely going to be a major focus in years to come for MMDC.

- Let's talk about the money.

You mentioned this $30 million loan fund which I want to get to, but prior to its announcement creation, these projects, for instance, Orleans Station, but other, you know, the beautification for lack of a better word, you know, the changes to streetscapes, small little parks and gathering spaces that were put together, how is all of this funded?

Again, and we'll get to the $30 million loan fund.

- Right, well, it goes back to the anchor institutions.

So each anchor institution came together to support it.

The Hyde Foundation, Pyramid Peak and other area foundations came together to know that this is very important for the city because if the Medical District flourishes, it's going to have a great economic impact across the city of Memphis.

So the streetscape projects, pre-development grants to get some of these facade improvements and other things.

It really came back to really those anchor institutions and our foundation support.

- So you all are not, when some people who are familiar with this show and they kind of would think, well, this is like Downtown Memphis Commission, it's not quite.

- Right.

- Maybe some of the same goals but not the same lending capacity, grant making.

You're not quasi public, you're a fully private, is that correct?

- Right, we're a 501(c)(3) community development.

- Okay, okay, but you work closely with DMC, I assume, cause you're, a bunch of the Downtown Memphis Commission area encompasses your area, is that right?

- Oh yes, there's a lot of overlap.

And we worked together on a ton of projects.

Paul Young, of course, the new president there, he sits on our board as well, so it's a lot of collaboration with DMC.

And they have been tremendous partners throughout the years and look forward to continuing to partner even further going forward.

- Now, the loan fund, $30 million.

What is, and I don't know if you both want to take this, but what is it, where did the money come from and what are the goals for that funding?

- Well, I will just start off.

And, you know, when articles came out so many people, "How are you able to accomplish this in your first 60 days, get $30 million?"

[everyone laughs] It's like, no, this was years in the making.

So being-- - Good on you [indistinct].

- Just right place at the- - He snapped his fingers and there's $30 million appear.

- I know, right place at the right time.

But this was something years in the making in which we want, and we've recently kind of changed our mission statement as well to make sure that it is equitable and inclusive as well.

So to be able to give, to work with Pathway Landing, Kresge Foundation, Hyde Foundation, and of course First Horizon, Regions and Truist to contribute the $30 million is really going to be a game changer in which we're able to spur more inclusive development as well.

So where, you know, second, third, fourth generation developers, you know, have those capital already lined up and relationships.

Now it's going to be able to spur more creative ideas to come into the district.

So those, you know, who may just be getting started in development, they're now able to go and apply for funds.

And I believe it's 250,000 up to $3 million.

And that's really what we're looking for to encourage all types of development and ideas to come into the district.

- Is it purely real estate development or is also business formation?

- So real estate, some mixed-use development.

We also have other business recruitment tools and, you know, incentives for residents to move into the district and so forth, but mainly real estate, mixed-use development.

- What sort of, I mean, what does that do for you in terms of you're that liaison, I assume, to developers and so on.

So now there's this $30 million fund.

Other development has happened there without this fund.

What is this, why was this necessary?

And is it, why was this necessary?

- So the reason that the fund itself was necessary is that even though there has been increased investor interest and development in the Medical District, it's still a relatively soft market.

And the rents that one can charge often don't pencil out.

So traditional financing institutions look askance at financing projects to be able to be completed.

So what a fund like this does it steps in as a more flexible financing tool and actually allows projects to come to fruition.

In turn, now we're establishing the market as a functioning market where previously it may have needed additional subsidy or assistance.

And for us, what this really means is that we're able to support projects at every step of it's life cycle.

So as Roy alluded to, we have a pre-development grant fund, that's up to $5,000, basically taking a back of the napkin sketch to something more tangible.

We have an internal fund that allows projects to get through their deeper due diligence period.

And then this fund, which is administered by Pathway Lending is really intended to allow projects to be built and as I mentioned completed.

- Let me bring Bill back in.

- So with housing coming to the Medical District, one of the discussions that's really happening all over Memphis is affordable housing.

And I'm sure you you've both heard people say the problem isn't in Memphis, the problem in Memphis it is not a lack of affordable housing, it's a lack of quality affordable housing.

So is that part of the plan for the housing mix in this district?

- Oh, 100%.

So when you look at the statistics of the Medical District, nearly 43% of residents live below the poverty line right now.

So we want it to be equitable and inclusive as well.

So this could spur more affordable housing options within the district and that's something that we want to have that good mix use of affordable market rate as well.

Anything you can add?

- Yeah, and I would just add to that, we know that 95% of available rental housing in the Medical District is occupied.

And when you have occupancy rates that are that high, you put upward pressures on rents.

And it potentially also acts as a disincentive for landlords to upkeep their buildings in a quality way because they have no incentive to.

So introducing more product into the markets will hopefully meet that latent demand and also spur improvements upon existing stock that is in the district already.

- And you mentioned that ComCap Partners is part of the Orleans Station and they've done much of south city, right, that's Archie Willis and company who've done tremendous amount of transformation of what were formerly public housing projects are now mixed-use developments with a big focus on affordable housing.

Some of the other things in the district.

So if somebody hadn't been in the district in, you know, five years or something like that, they would say, "Oh, I drove through there a long time ago.

I was visiting somebody in the hospital unfortunately."

I mean, hospitals are great, great institutions, great care, but it's kind of a wasteland.

There are parts, I work downtown, I live in midtown, so I'm in there a lot.

And they're, maybe highlight some of the things.

I mean, there are restaurants, coffee shops, there are businesses in there.

Obviously we're coming off COVID and so the last year was weird, but pre-COVID, post-COVID, what is the landscape people would see, businesses and activity?

- Well, you will see a lot of, and of course me being new to the district as well and looking back at the history just over the five years of the organization, over 30 or 40 new businesses have gotten started.

We've seen even our anchor institutions increase and do a ton of development.

I think it's maybe over a couple billion dollars of planned development within our anchor institutions within the Medical District.

You've seen new apartments take place.

I think The Rise, I think, kind of opened during the pandemic but it's over 90-something percent are already occupied as well.

- Apartment not, really not far from AutoZone Park, which is, and I apologize for that, but I remember I've said this to other people involved with projects there that, and I said this to Craig Unger, the President of AutoZone Park at Redbirds and the FC 901 or 901 FC, I always get it backwards.

And he said, you know, with apartments and development happening in the Medical District, they were looking at putting a new entrance on that side of, that would be the east side of AutoZone Park.

And you realize it's walkable, but when all of that is dead and scary and abandoned it seems very far away because there's no reason you would walk up there unless, you know, a handful of tourists who are walking to... - Sun.

- Sun Studio, thank you so much.

So that's an interesting dynamic and the other dynamic and this, you and I, Ben, met randomly cause I saw Alex Turley, Henry Turley, who's now CEO of Henry Turley Company, so I pulled over to yell at Alex because I like to yell at Alex, Alex is a friend.

And I met you there and you all were in a little triangular dog park that is, I mean, we talk about these billions of dollars in investment and we talk about these massive institutions and we talk about $30 million loan fund and we talk about the Orleans Station which is a tens of millions dollar project, if not, I don't know how, it's huge.

This little dog park though, talk about the importance of small things like that to making a neighborhood.

- Well, I mentioned earlier about stitching together the fabric of communities and that's how you do it with those small scale moves and that allows for these random collisions to take place.

And all of a sudden you've made a new friend, right?

And what's interesting about Edge Triangle where we met is that, that is part of this kind of constellation of little green spaces that are emerging within the Medical District.

Obviously there are bigger crown jewel green spaces like HSP, Morris Park, but with Edge Triangle and then there's the Ravine which is under development right now.

That's being led by DSG and Downtown Memphis Commission, that is taking what was a underutilized railroad right of way and turning it into a linear park.

So there's this whole network of ways that you can engage with space in a really new fashion for Memphis.

- You are polite to call that an underutilized space.

[Ben laughs] That, it is a scary gully in the middle, right across from the old Commercial Appeal building that goes under and kind of right off Union and is just unlit and forbidding and there are historically a whole lot of trash down there.

And now there will be what in this area?

- Yeah, so there'll be an active linear park that will be full of kiosks.

There'll be an amphitheater that will host performances.

And then Memphis Made is opening up a second taproom at that little hug at the northern ends of the Ravine as it's being called.

So there's going to be a whole lot of activation on a site that as you mentioned, may be kindly underutilized.

Or perhaps scary and derelict.

- Scary, abused and sad.

Let me, we've five minutes or so left.

Let me go back to Bill.

- Rory, what do you hear from workers in the Medical District about the prospect of living in this area or just the prospect of hanging out in this area, you know, buying things in this area?

Is there buy-in from that specific segment?

- Yeah, so we have an annual survey that goes out to anchor institutions and their employees and also residents.

And some of the common things, so we all think about that we wanted a community that will live.

We want to have, you know, see safe and clean streets.

We want to have good schools within the area.

So that's something even under early childhood development and childcare.

So there's a lot of young professionals within the district.

How do we attract those services here?

They want to be able to do things during lunch and also after hours.

So they want more restaurants, more other amenities and services to be brought to the district.

But overall, most people want to be able to live close to where they work so they're able to cut down on commute costs, walk to work, bike to work, take a shuttle to work.

Those are some things that we continue to get feedback on and something we want to work over you know, in the next five years to make happen.

- It's a huge workforce, not just in the Medical District but with the other medical institutions that are across this city.

I mean, healthcare is a major driver of the Memphis economy.

- Well over, I believe it's 20,000 employees within those anchor institutions.

So adding the other institutions that are located there, I think it's over 8,000 students that go within the colleges in the Medical District.

So yes, a large population who would love to be able to, you know, live where they go to school and also live closer to the job as well.

- Mm-hmm, go ahead.

- Just a couple minutes left.

One thing we joked about, but it's not a joke, the trash and unclean spaces.

And talk about, you have staff that helps to clean up the Medical District, right?

I mean, they're what, a team of how many people, who people will see them in the blue shirts pushing, you know, often pushing trash cans and sweeping and picking things up, and they're all over the Medical District.

Talk about the importance of that beyond no one likes to see trash, but there's a spiraling, positive effect, right?

- Oh, 100%.

So even when I, you know, blessed to get this position, so what is the Medical District?

And well people will point to the ambassador program.

So they'll see ladies and gentlemen going out to, you know, do landscaping, recycle, pick up trash and litter to make it a cleaner space and also even a safer space as well.

So just think about where you want to live, work and play.

You want to have a good, safe and clean environment.

So that team, really grateful for the ambassadors who are out there, about members of their team, going to, basically for all the things and investment that's happened.

They're going to make sure that it is maintained going forward so that's very critical.

And the great work that has happened and attraction to the Medical District is in large part to that ambassador program and their team.

- In terms of talking to developers and bringing in private capital and investment, is that part of what they want to see, the cleanup, the kind of commitment, the small spaces we, like where we met?

I mean, those aren't just nice to have.

- Yeah, absolutely.

You know, if you take a step back MMDC is nothing but a reframing device and through all of these programs that we help administer, it reframes the perception both for developers but also for the people who are living and studying and working in the communities.

- But just with about 30 seconds, before you were at MMDC, what did you do?

- So before that, I ran the SBA program for the city.

So the Small Business Development Center, so helping small businesses get contract opportunities, funding, federal government contracting and so forth.

So, successful over those eight years and grateful to move into this new role.

- I did look you up a little bit.

In your time at the SBA center, client numbers grew at what, forty to forty-five percent, up to 800, 1,000 a year, small business [indistinct].

- Yeah, we became the flagship center for the state and also a national model.

So, grateful to take this experience and to help us scale the Medical District to have a great economic impact within the city.

- All right, Rory, thanks for being here.

Ben, thanks for being here.

Thank you, Bill.

And thank you for joining us.

Join us again next week.

[intense orchestral music] [acoustic guitar chords]