Team Building
COREY DAVIS | MEMPHIS BUSINESS JOURNAL
Two Southeastern firms have teamed up to, first of all, help Memphis score big in youth sports. The $57 million Memphis Sports and Events Center (MSEC) is slated to open this fall at Liberty Park.
At 227,000 square feet, MSEC will feature 16 basketball courts that can be converted into 32 volleyball courts. It could put the city on the map in the hottest of sports sectors.
But a joint venture between Memphis-based Allworld Project Management and Florida-based Vieste LLC could make them major players competing for multimillion-dollar contracts long after the ribbon has been cut on the MSEC.
The team assembles
Allworld was established in 2010 to provide construction project management services for what is now Tiger Lane, also at Liberty Park. The firm is led by founder, owner, and CEO Michael Hooks Jr. In just over a decade, Allworld has grown to have about 60 full-time employees.
The City of Memphis selected Allword as the project manager in 2017, right at the restart of the planning process to give new life to the old Mid-South Fairgrounds. Eventually rebranded as Liberty Park, the public-private redevelopment is overhauling the southeast quadrant of Central Avenue and East Parkway.
Mary Claire Borys, manager of strategic initiatives for the City’s Division of Housing and Community Development (HCD), said Allworld was chosen to provide leadership and team coordination from the first public meeting, in August 2017.
Vieste — founded in 2005 by chairman and CEO Michael Comparato — joined the project in April 2018, based on its experience in building youth sports complexes with various municipalities and public-private partnerships.
Comparato said his firm was referred by another Florida firm with whom they had frequently worked, Sports Facilities Advisory, which had completed the initial sports feasibility study for the City of Memphis.
Borys said one of Allworld’s first tasks was handling the state application process for a potential TDZ (tourism development zone) designation. Vieste was initially brought in specifically to help the City figure out the complex capital stack involved, as there were eight different funding sources for the project.
“Our role was to start with a new white board, so to speak, and lead the team to a new overall plan for the project, including programming, design, budgeting, and financial engineering,” Comparato said.
The shot clock ticks down
Through the heavy lifting between Allworld and Vieste, the Tennessee State Funding Board approved in May an issuance of $70 million in TDZ bonds for the City of Memphis to directly fund the $126 million Liberty Park.
When combined with private development phases, Liberty Park’s overall investment tops $200 million.
The City of Memphis conservatively projects Liberty Park to generate more than $135 million in new sales tax revenue over 30 years — more than enough to pay off the $70 million in TDZ bonds that financed its construction.
However, getting the TDZ for the project wasn’t easy for the City.
“The TDZ legislation was very comprehensive and had a number of factors that had to be in place to qualify the project under the legislation to receive the state’s portion of sales tax increment for the next 30 years,” Comparato said.
Borys said there were two primary challenges to the TDZ approval process.
“First, the TDZ statute had been allowed to sunset, and the Fairgrounds was the very last TDZ that could be approved,” Borys said. “There was pressure from the state to move quickly to get an actionable plan approved or to abandon the effort completely before the end of 2018.”
Another major obstacle Borys acknowledged was the volatile past relationship between the City and the State.
She said Vieste helped the City laser-focus on the project and make the most persuasive case to all the legislative bodies whose approval was required. The result was a TDZ application submitted to the state and finally approved in November 2018. With the legislation discontinued on Dec. 31, 2018, Liberty Park was the final TDZ approved by the state.
“The most challenging aspect of the TDZ approval process was arguably the long history of prior attempts by the City and a lack of trust that had come to exist between the state and prior City administrations on this particular issue,” Borys said. “This is why we prepared a very focused, highly detailed plan with experienced partners and pursued a transparent application process to make sure all questions from Memphis City Council, Shelby County Commission, and the State Building Commission were thoroughly answered in a timely manner.
“Vieste and Allworld were critical to this effort, first in contributing to a solid plan and application and then accompanying the City on all of our meetings with members and staff members for those approving bodies,” she continued.
The zone offense
After the TDZ was approved in late 2018, the City began talking with Allworld and Vieste about their role in bringing the planned project to life.
Paul Young, now president and CEO of the Downtown Memphis Commission, was head of the Memphis HCD at the time. He suggested that Allworld and Vieste create a joint venture to allow the companies to fully combine their efforts and shift seamlessly between each other as different aspects of the project required their particular expertises.
Hooks and Comparato said they formed a connection with each other over months of discussions, field work, and research conducted for Liberty Park.
The men said they traveled together to youth sports facilities in Alabama, Florida, New York, and Virginia to better learn the business side of construction and the importance of project development in those types of facilities.
All of this led to them creating Fairgrounds Partners LLC, a joint venture finalized in early 2019. The City executed their program management agreement in April 2019, according to Borys. The firm is owned equally by Hooks and Comparato.
Today, Vieste has co-office space inside Allworld’s building on B.B. King Boulevard, so both firms’ staff work collectively out of the space.
Hooks said the companies have at least a dozen employees between them working on the project on a continuous basis.
“We are in Memphis almost weekly at this point and have colocated in Allworld’s headquarters,” Comparato said. “They have been not only incredible partners but also great hosts to our team as a home base for this market.”
Going into an equal business partnership with a minority business enterprise wasn’t something new for Comparato. He told MBJ that he did the same with a minority business firm in Indianapolis years ago, and his work with Allworld was an ideal fit.
“We quickly realized that there was a lot of synergy and compatibility between not only our two firms, but the two of us,” Comporato said of Allworld and Hooks. “We think culturally, and from day one, this has been a partnership. It hasn’t been a forced marriage. … Both our roles, responsibilities, and compensation through the joint venture is virtually identical. Our teams have blended magnificently.”
Hooks said Fairgrounds Partners is exploring business opportunities and pursuing other projects in Memphis as well as other parts of Tennessee, Alabama, and Florida.
“We’ve already started working on other opportunities in other locations inside and outside of Memphis for us to continue the partnership,” Hooks said. ”I think this experience is one of a kind in Memphis, so we will be able to take facets of this as best practices and share with other potential communities.”
Compararto said they’re also looking at renaming their joint venture and most likely would change the name to better fit Allworld and Vieste outside of the work they’re doing at the former Fairgrounds.
“Now that the Fairgrounds has been rebranded to Liberty Park, we are working on a dba for Fairground Partners LLC to work on other projects together beyond Liberty Park,” Comparato said.“ We want to make sure that our company continues to grow, our companies individually grow, and we do more work together.”
With white and Black-owned firms forming an equal partnership firm, the hope is this is something that could be a blueprint both locally and nationally.
“Our partnership is unique, exciting, and very productive, and we absolutely hope this is a model that others see and emulate,” Hooks said. “There is continued opportunity for us to lean on each other’s skill sets and experience, to grow together. We’re excited to see where this partnership takes us.”