For years, South Memphis has had a tool designed to generate money for neighborhood redevelopment. The problem? There wasn’t enough development happening to generate the money.
Now, Memphis Mayor Paul Young says a proposed $7 million investment could change that.
Young announced the funding Thursday, Oct. 15, during the Memphis Housing Summit, outlining a partnership between the Memphis Health, Educational and Housing Facilities Board and the Community Redevelopment Agency (CRA) to inject new resources into the existing South Memphis/Soulsville tax increment financing district, or TIF.
“The challenge that we’ve had with the South Memphis TIF is that there hasn’t been enough new development to create money in that bucket,” Young told summit attendees.
A TIF captures additional property tax revenue generated by development within a designated area and reinvests it in neighborhood improvements. But without new development, there is little additional revenue to capture.
“We put the TIF in place. No money,” said Andrew Murray, speaking on behalf of the CRA. He credited the Soulsville TIF Community Advisory Committee for continuing to push for the resources necessary to implement the neighborhood’s redevelopment plan.
“The mechanism wasn’t working,” Murray said. “So we said, ‘Okay, well, let’s go find some money.'”
Young said the $7 million would come from fees collected over the past 15 to 20 years from projects that received development incentives. He said the proposal also includes additional support from the city, Memphis Light, Gas and Water and philanthropic partners.
The investment would allow the city’s Essential Housing Program, already operating in Uptown and Klondike-Smokey City, to expand into South Memphis. The program works with local developers to transform vacant lots into housing.
Young said the funding could also support home repairs and commercial redevelopment, including potentially helping move forward long-discussed plans for the Metro Shopping Plaza at 394 E. E.H. Crump Blvd.
One major obstacle, he explained, is that building a new home in neighborhoods with lower property values can cost more than the finished home is worth.
“You don’t get a lot of people to take that investment opportunity unless you have another incentive,” Young said. “It brings another incentive to allow those projects to now have cash flow.”
The announcement comes as Memphis pursues Young’s goal of creating 10,000 new housing units by 2030.
Young said most of the necessary approvals for the proposed investment have been completed and expects the funding to become available within approximately a month.
“This is the kind of investment that can help define the future of an entire neighborhood,” Young told the audience, “and become the model for how we change the course of our city.”
