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VOL. 131 | NO. 25 | Thursday, February 4, 2016

Collaborative Aims to Enhance Memphis Medical District

By Madeline Faber

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In 2016, the Memphis Medical Center will see $1.8 million in upgrades and enhancements aimed at creating a unified, livable district. That’s the annual budget for the newly established Medical District Collaborative, a nonprofit entity made up of the area’s stakeholders and executives.

With 16,000 employees and 8,000 students, the Memphis Medical Center is one of the Memphis’ most economically active areas, but it lacks a pulse after work hours. Executives and stakeholders in the major institutions are working together to change that.

(Daily News File/Lance Murphey)

The collaborative’s inaugural board meeting on Monday, Feb. 1, put an official phase on months of discussion around how to give Memphis’ economic powerhouse a pulse after work hours.

In summer 2014, the area’s eight anchor institutions hired consulting firm U3 Advisors to design and help implement an “anchor strategy” to redirect the area’s massive economic resources and defensive property holdings into something that lifts up the entire district.

Tommy Pacello, president of the MDC and a team member with U3 Advisors, said that change will be apparent in May of this year, with plans that include streetscaping, public art projects and wayfinding signs initially, followed by real estate development and parking management further down the line.

“People don’t do this just because they’re good citizens and it’s good for the area, but because it helps their individual organizations,” said Omar Blaik, CEO and co-founder of U3 Advisors, which has applied similar strategies in converting research and medical districts in Detroit and Philadelphia.

Gary Shorb, CEO of Methodist Le Bonheur Healthcare and chair of the MDC, said his goal is to have 15 to 20 percent of his employees living in the area.

“We’ve never had a master plan before,” he added. “The problem with previous efforts is that we didn’t have top-level engagement.”

For the first time, the leadership is playing the same game. A cohesive community development strategy could retain students and employees as well as attract researchers and outside investment for all.

With an array of suitable housing, reinforced security, retail and restaurant offerings, green spaces, events and a cohesive identity, there’s no reason why Madison Avenue’s middle child can’t play in the consumer-facing leagues like Midtown and Downtown.

The influence and demand already is present, but it needs to reach a human scale. The institutions bear a $2.7 billion total operating budget and control half of the property in the Memphis Medical Center. With 270 acres of institutional and commercial parking, it’s difficult to achieve the sidewalk vibrancy that supports a live/work environment.

Pacello sees the MDC as a coordinating body between the institutions and the public realm. The leadership, the people who make up the institutions and business owners want the same goals: safe streets, strong schools, job opportunities, and amenities and services.

“It’s less about development and more about providing incentives,” said Blaik. His strategy is to flex the institutions’ existing assets – huge property holdings, workforce base and daily activity level – to increase demand for goods, services and residential offerings.

Those actions could include employee and student housing incentives for those that choose to live in the district, as well as storefront improvement grants and a pop-up retail incubator in the style of MEMShop. The MDC won’t have the power to grant payment-in-lieu-of-taxes incentives, but it is aligned with the Downtown Memphis Commission, which can fulfill streetscape improvements and possibly grant tax breaks to businesses looking to move to the area.

Building housing is going to be a critical step. Only 2.7 percent of the area’s employees and 6 percent of its students currently live in the district. Blaik added that any newly constructed housing would be mixed-income and “blend with the fabric of the street” rather than looking like dorms.

“As an anchor, we have been buying properties for years as a way to target blight,” said Shorb. “We were unintentionally dragging down property values by buying and then tearing down problem properties.”

Another piece of building up a street-level economy is spending more money locally. Pacello said the district is spending only $50 million of its total budget with locally and minority-owned businesses in Memphis. Over the next five years, he believes that amount could double.

Shorb said that Methodist Le Bonheur has recently changed one of its purchase orders from a national group to a local minority-owned business, and more contracts are on the way for other Memphis businesses.

“We’re having to change our thought process about purchasing and how it works to enhance us. With refocusing it, we could have a large impact and actually create more businesses,” he added.

The district’s growth strategy is also building on the slew of hospital expansion announcements that broke in late 2015, with St. Jude Children’s Research Hospital, Le Bonheur Children’s Hospital, Methodist University Hospital and others soon to ring in an investment boom. St. Jude has said that it plans to hire 2,000 new employees, and the district is going to have to keep pace with housing and services.

“Built environment communicates something to you,” said Omar. “Five years from now, the district will look like a place we care about and invest in.”

PROPERTY SALES 70 275 21,235
MORTGAGES 72 278 24,410
BUILDING PERMITS 178 499 43,933
BANKRUPTCIES 54 146 13,614