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Binghampton, Frayser Gateway Centers and proposed TIF plan models on how to revitalize commuties

Binghampton Gateway retail center is under construction at Sam Cooper and Tillman.

Binghampton Gateway retail center at Sam Cooper and Tillman will open by end of the year.

A real estate sign denotes the availability of the Frayser property sits advertising the proposed use of a shopping center.

Two high-need areas in Memphis, Binghampton and Frayser, are ramping up investment in their communities with incoming Gateway retail centers and a proposed neighborhood tax-increment financing plan.

Binghampton and Frayser - two high-need areas in Memphis - are set to be beneficiaries of much-needed capital investment with incoming Gateway retail centers. The planned developments are a result of Community PILOTs from EDGE to provide funding.

“First and foremost, it’s important because the neighborhood has asked for it for over a decade. And that’s consistent with our work, really, it’s prioritized and driven by residents,” said Noah Gray, executive director for Binghampton Development Corporation. “After that, there are the immediate, tangible benefits of improved food and job access.”

The scheduled improvements didn’t necessarily gain traction overnight, though. For instance, the Binghampton development has been a decade in the making.

That is when the Binghampton Community Development Corporation was founded. Established by the Christ United Methodist Church in 2003, the BCDC’s original mission was to revitalize the neighborhood’s housing. Encompassing an area between Summer Ave. and Poplar Ave., it had long been in decline.

A few years later, BCDC Executive Director Robert Montague began eyeing a property on the corner of Sam Cooper and Tillman. At that time, it was home to a low-rent apartment building. An eyesore, it had an aging red-brick façade with rusting staircases. Chronically over-stuffed dumpsters sat in the parking lot. All fronted by an undeveloped, oft-overgrown acreage. It has since been razed.

A shopping center was one of the ideas he was mulling. A closer look at Binghampton shows he was on the right track. Although there is a surfeit of wood frame housing and blue-collar employers, there remains a dearth of shopping options.

“In Binghampton, they’ve never had a quality shopping center built in their community,” said Shawn Massey, partner in The Shopping Center Group and key player in the Binghampton and Frayser Gateway Centers.

After consulting with residents in the area, Montague heard a somewhat common refrain - it takes us two buses to go to Poplar Plaza to get groceries; all the convenience stores in our neighborhood don’t sell healthy food; we would love a grocery store.

Framing of a building is erected as part of the Binghampton Gateway.

With a plan in mind, Montague and other Christ UMC members approached Massey.

“As a member of the church, they were looking for some expertise in retail and they came to me. The Binghampton Gateway project, I have donated 100 percent of my time to it, even though it’s my profession to develop and lease shopping centers, and have taken no fees from the project,” said Massey, who has been developing commercial real estate for 20 years.

Securing development deals aren’t just a matter of who you know. To get a major retailer to invest requires assurances. It’s capitalism, not gambling, after all. A sense of future return on investment is helpful. And when the proposed project is in a low-income area, it’s even more challenging.

“Urban development is really a marathon and not a sprint. It is harder to convince developers or retailers to locate in an urban area for a variety of reasons. One, they don’t do as much sales in an urban area as a suburban area. Two, there are security, safety and crime concerns in some areas that retailers don’t want to deal with,” said Massey.

What locked in the Binghampton Gateway project was a Community PILOT (payment in lieu of taxes) from EDGE. It was the first community loan granted by the development board. It’s what ultimately attracted retailers to the project.

The BDC received a 15-year PILOT. Total capital investment in the project will be $6.8 million. The facility will be owned, managed and maintained by the development corporation.

“That PILOT allowed us to sit down with Save-A-Lot and negotiate a rent that was economical enough for us to build a new building and for Save-A-Lot to make a profit. To do new development is really hard in an urban area without some public incentive like a PILOT,” said Massey.

The discount grocer will be the primary tenant at the Gateway Center. A sought-after retailer was the Dollar Tree and will be the secondary tenant. Others will be announced later.

“After a grocery store, Dollar Tree was the number one tenant mentioned to come to Binghampton,” said Massey. “We wanted to engage the neighborhood to make sure we were building the shopping center they wanted to see, not what we thought it should be.”

Formerly home to the Treasury, the lot in Frayser now sits vacant and overgrown, with vehicles scarcely parked about.

While the Binghampton Gateway Center has been germinating for years, the Frayser development is another story.

Owned by a client of Massey’s, Manherial Patel, the property at 2571 North Hollywood was originally proposed to be sold and developed into a truck stop last year.

Near an I-240 exit, the idea fills a need. There are no truck stops between Lakeland and West Memphis along the route. However, like in Binghampton, more basic needs exist in the area. Access to fresh food is a good example.  When residents heard the idea, it was quickly rejected.

Adjacent Rodney Baber Park is getting a $5 million upgrade.

The fact that the property backs up to Rodney Baber Park didn’t help the pitch either.

“It floods pretty often, so we got about $6 million from the Greenway project federal funding to raise it up and redevelop it into a really nice sports complex,” said Steve Lockwood, executive director of the Frayser Community Development Corp.

With the recent influx of funding, the park is undergoing a revitalization. Among the new amenities will be a lake for fishing, as well as bike and walking trails. The baseball and soccer fields will be upgraded to host competitive play. There will also be a trail that connects the park with the site.

“The community, rightfully, said ‘we don’t want to see a truck stop next to a park, you are putting all this investment into a park, like Shelby Farms, and we don’t need a truck stop and the element it might bring,’” said Massey.

“The Frayser Gateway and the sports complex should complement each other, since the sports complex will bring in teams from out of town that would use the hotel and restaurant,” said Lockwood.

In search of a solution, Patel approached his friend.

“I was brought in to broker a peace between the community and my client who just wanted to see a good development on his property. He’s owned the property for more than a decade and it’s just been empty,” said Massey.

Once Massey met with members of the community, a plan began to emerge.

“They wanted to see another quality grocery store come in, quality apparel value retailer, and a sit-down restaurant. Those are the things missing in this part of Frayser,” said Massey.

A site plan was rendered for the 20 acres. Anchored by a grocer, 99 retail and 37 restaurant jobs will be created. Frayser currently has an unemployment rate ranging from 15 to 30 percent. The project is being developed by Dipesh Patel, operating partner of the G2 Venture Group. Investment totals are upwards of $16 million. In June, a 15-year Community Builder PILOT from EDGE was awarded.

The development will also address a long-running problem in Frayser – blight.

Located at 2571, North Hollywood, it was a former retail location.

“It’s been rundown for a long time,” said Lockwood. “It was at one time the Treasury Department Store – a significant store like Macy’s – until it was shut down 20-plus years ago, and then it became ugly and empty.”

Leaders in the Binghampton revitalization process hope investment in efforts like the Gateway Center and Broad Avenue’s resurgence can be capitalized for broader gains in the neighborhood.

The Binghamton Development Corporation hopes to create a Neighborhood Tax Increment Financing (TIF) District in the neighborhood. The area is bounded by Poplar to the South, Holmes to the East, Summer to the North, and East Parkway on the West.

If approved, growth in the area’s tax revenues above 2016 numbers will go to into a fund for improvement projects in Binghampton.

It’s projected to generate $26.2 million in revenue over the next 30 years.

The Memphis & Shelby Co. Community Redevelopment Agency will have final say on all projects. They are slated to go to the “direct benefit of the poor,” according to Gray.

"The Binghampton Development Corporation will not necessarily serve as the developer, although we could. The BDC has submitted the application to CRA as if we are the steward of the TIF (tax-increment financing) so we plan to make recommendations to the CRA board but they have the ultimate say in how the dollars are spent,'' Gray said.

Projects will be geared across five categories: Housing and neighborhood development, infrastructure, public facilities, environmental improvement or site acquisitions, and economic development.

"What we’re looking for are projects that the neighborhood would prioritize as being in its best interest. If it’s a housing development, then we’re looking for projects that preserve affordability and create high-quality, rental and homeownership opportunities for residents. If the community development that we do is displacing Binghampton residents then we are not doing ‘just’ community development,” said Gray.

Gentrification success stories like Broad Ave. have downsides. Rents go up as neighborhoods improve livability. Low-income residents are eventually pushed out. The TIF is designed to turn this drawback on its head and benefit the poor.

“Preserving affordability is the key strategy of this TIF model,” said Gray.

Gray hopes the Gateway projects and TIF plan could serve as models for Memphis on how to revitalize communities.

“The Binghampton Gateway Center and Binghhampton Neighborhood TIF can serve as a prototype role for other neighborhoods to mimic. We hope to climb the steep learning curve for other neighborhoods. We think there are more Gateways to come,” said Gray.

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