Challenge

An obsolete and abandoned Sears, Roebuck & Co distribution center and retail store less than two miles from downtown Memphis was destined for demolition when a local business investor promoted his vision of a new urban village. But what was once an economic heartbeat that brought together people from all walks of life had been shuttered for more than two decades and was reviled as an example of “what doesn’t work” in Memphis and a “beacon of blight.” The enormous 2.5 million square-foot building and its accompanying parking garage were little more than a dark shell.  And no previous developers, organizations, or government groups had come up with a solution.

What We Did

Urban Atlantic through its affiliate Mid-City Community CDE embraced the vision of a revived mixed-use development, where one part would be leased to nonprofits, another would become residences, and still another would be transformed into a marketplace with restaurants and other vibrant gathering spaces. The cost was projected to reach $203 million. Under the master plan, half of the space would be leased to nonprofits, including one of the city’s most celebrated philanthropic organizations, St. Jude Children’s Research Hospital. Tenants would also include the Memphis Education Fund, Methodist Le Bonheur Healthcare, the Crosstown High charter school, Memphis Teacher Residency, and Church Health YMCA. Crosstown Arts, a 501(c)3 non-profit, was formed to facilitate the redevelopment.

Mid-City Community CDE was attracted to the project, in part, because of the Urban Atlantic’s involvement in a nearby Hope VI residential development that benefited from Low Income Tax Credits. The Crosstown project would promote jobs and economic development for the entire area. Building on the developer’s contribution of $25 million, Mid-City moved to help fill the funding gap. A total of $56 million of New Market Tax credit allocations provided about 20 percent of the needed funding.  Seeing the enormous potential of this project, Mid-City was in early with its offer a low-interest loan of $12 million from its New Markets Tax Credits allocation. The company’s deep real estate development experience helped to bring other Community Development Entities (CDEs) to collaborate on the remainder.

Revitalization Achieved

Driven by community passion and determination to do what was considered by many to be the impossible, the project sponsor used Mid-City and other CDE’s funding to transform a 12-acre parcel of land on the outskirts of downtown Memphis into a wildly successful landmark and popular urban destination. The excitement and community life that infuses Crosstown Concourse stands as a testament to the power and promise New Market Tax Credits and the ingenuity and determination of countless community members, investors, development partners, and other visionaries.