At a meeting on Tuesday morning, the Memphis City Council's economic development, tourism, and technology committee approved the allocation of $2 million in city funds to remediate blight at the historic Chisca Hotel.
The money will be managed by the Downtown Memphis Commission (DMC), and it is only to be used for clearing up blight. None of the funds may be used to develop the 100-year-old hotel. Blight problems at the Chisca include standing water in the basement, lead paint, and asbestos.
Paul Morris, president of the DMC, told council members that it was important to use public money for the blight remediation because no developer would want to take on the building's renovation in its current state.
"This structure is causing embarrassment, harm, and damage to our image," Morris said.
For every $1 of city funds put toward clearing up the blight, $9 of private funds will be allocated to developing the property. The property is currently owned by the Church of God in Christ (COGIC), and Morris told the council that COGIC had tried and failed to redevelop the hotel on private funds alone.
If approved by the full council, the DMC will hold on to the $2 million until the developer uses their own money to purchase the property from COGIC and closes on the deal. The developer will be responsible for executing construction contracts. If the development is successful and a profit is made, the developer will be required to return the $2 million to the city.
"This is not a real estate investment for the city. It's a neighborhood revitalization and blight remediation project," Morris said.
The same council committee also approved the use of Center City Revenue Finance Corporation funds for redevelopment of the Chisca parking garage. Those funds are not part of the city's budget, but rather the revenue stream is funded by fees from downtown properties. The funds are only to be used on downtown parking structures, but the city council and the Shelby County Commission must approve their use. The garage would be open to the public, though it would primarily be aimed at residents of downtown apartments.
The full council will vote on both the $2 million allocation to Chisca blight remediation and the funding for the parking garage on Tuesday, August 7th.