Securing financing for Downtown Memphis developments never seems to be an easy task.
Chance Carlisle and Tyrone Burroughs are hoping to make that hurdle a little less daunting. On Thursday, the duo announced the creation of the River City Momentum Fund.
The fund will ultimately serve as a local venture capital fund, providing investment opportunities for local and out-of-market investors in real estate developments in Downtown and throughout the city. The buy-in idea here is Memphis.
Carlisle, who is the president and CEO of Carlisle Development Corp., said the idea came out of several discussions while looking back at how much momentum the city had pre-pandemic. (Burroughs is the president and CEO of First Choice Sales & Marketing Company.) The stall for several notable projects such as The Walk on Union Avenue, among others, has been caused by a litany of issues including higher interest rates, supply chain issues and available financing options outside public incentives.
“It is our explicit goal to raise capital from investors of every community, similar to the capital raising of the Grand Hyatt Beale St., in which more than $20 million of local, minority capital had been committed. The River City Momentum Fund provides that opportunity again at a larger scale,” Carlisle said in a statement.
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The goal is to raise $100 million to $150 million by early 2025, with an ambitious target of more than $1 billion in equity, debt and public incentives in the fund’s reserves. The aim, once fundraising reaches its target, is to streamline financing options for projects in Memphis, Carlisle said.
Carlisle said the logistics of the fund are still being finalized, however, the fund will be monitored by an advisory board. He added that the fund wasn’t modeled directly after the initiative, but the leadership behind the River City Momentum Fund was aware of the strategy the community development financial institution, Capital Impact Partners, began in Detroit.
The River City Momentum Fund is expected to help expedite the process for both local and out-of-town investors. In some ways, the River City Momentum Fund’s goal is to peel back the veil and allow greater access for investors to pinpoint a target and quickly allocate funds for a single project. The aim is to get more projects across the finish line faster and open up the opportunities for investing in Memphis in a new way.
Downtown Memphis Commission (DMC) chief operations officer Brett Roler said he’s excited about the fund and doesn’t see a conflict with existing incentives such as the DMC’s payment-in-lieu-of-taxes (PILOT) program. Roler added that additional resources to help cover gap financing are needed. For him, the fund showcases locals buying into Memphis, something that will only help encourage investment throughout the city and from outside investors.
Carlisle said, anecdotally, it is difficult to complete a $1 billion project, but ten $100 million projects can be completed twice as fast. He added that the fund is also a solution to the city’s reliance on nonprofits, private donations and the hotel and motel tax.
“As a primary vision-caster for the city of Memphis, I applaud the scope and scale of this initiative,” Memphis Mayor Paul Young said in a statement. “I believe it embodies the spirit and bold thinking I encourage for both Memphis and Memphians. Our city is stronger when we build together.”
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The fund is targeting a few notable projects at the start of its inception including The Walk, One Beale, Central Yards and the former Racquet Club in East Memphis.
Of the aforementioned targeted developments, Carlisle Co. is involved in three of the four as the primary developer. Carlisle acknowledged that the majority of the shortlist are projects he’s involved with, however, that is a means to start somewhere, he said. The goal is to create access for developers and projects throughout the city; both ones that have stalled and ones that are still germinating. In September, Carlisle Corp. announced plans for a mixed-use development at the 12.5-acre Racquet Club site. The company also has been the main driver behind the One Beale development, which includes the Caption by Hyatt, Landing Residences and Hyatt Centric. The company has also partnered in the acquisition of the Central Yards 5.6-acre site near Cooper-Young. The mixed-use project was first announced in 2020.
Additionally, once the reserves are built up, the fund is expected to help offer financing for public-private projects including FedExForum, Renasant Convention Center district and Liberty Park.
“It is my belief that, too often, progress is stalled due to a lack of momentum and initiative,” Burroughs said. “This effort lacks neither of those attributes. I am firmly invested in this from day one and invite all, both public and private, to join this effort.”
Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X/Twitter:@neilStrebig.
