Three Roots Capital Partner Spotlight: Ray Moncrief

Ray Moncrief is the President and Chief Operating Officer of Outdoor Venture Corporation (OVC) and a valued member of Three Roots Capital’s Board of Directors. With decades of experience in finance and community development investing, Moncrief is committed to doing business and supporting entrepreneurs in Appalachia.

Previously, Moncrief worked at Kentucky Highlands Investment Corporation (KHIC) in various roles beginning in 1984, retiring as Executive Vice President and Chief Operating Officer in 2014. He has worked as a consultant for KHIC since his retirement. Among other roles and ventures, he also served as the President and Chief Executive officer of Mountain Ventures, Inc., a Small Business Investment Company (SBIC), owned by Kentucky Highlands.

Despite his well-known reputation as an investor, Moncrief didn’t start out in the investment industry. Right after graduation from Louisiana Tech University, he began his career as a cost accountant for Firestone. In 1978, he was recruited by J.C. Egnew, Chairman and CEO of OVC, to become the company’s Chief Financial Officer. After five years, he got the “entrepreneurial bug” and left to start his own company, Medical Management Corporation. When he left, Egnew invited Moncrief to serve on OVC’s Board of Directors, which he still serves on to this day.

Moncrief credits Frederick J. Beste III, former President and CEO of KHIC, for putting him “on the road” to working in the investment industry. When Moncrief sold his company in 1984, KHIC recruited him, and he entered the world of “investing in small businesses with equity and debt,” where has been ever since.

“When I look back on my career, I’m satisfied with the progression that I’ve had,” he said. “I wouldn’t change the road that I traveled over the last 48 years for anything.”

Moncrief met Grady Vanderhoofven, President and CEO of Three Roots, through Tom Rogers, President and CEO of Cherokee Farm Development Corporation, when Rogers was the President and CEO of Technology 2020. Rogers introduced Moncrief to Vanderhoofven as a potential partner to launch the Southern Appalachian Fund (SAF), a New Markets Venture Capital Company. When they first met, Moncrief said their relationship “clicked instantly.” Moncrief and Vanderhoofven formed SAF in June 2003 and Meritus Ventures, a Rural Business Investment Company, in 2006.

In January 2018, not long after founding Three Roots in the middle of 2016, Vanderhoofven asked Moncrief to serve on the Board of Directors. Moncrief said it took him no time at all to say yes because he wanted to “keep on doing” what he had been doing with Vanderhoofven, and he had a high regard for the rest of the Three Roots team.

“If you’ve been in business as long as I have, you gain a lot of knowledge,” he explained. “I enjoy working with organizations like Three Roots Capital. I guess I just don’t know when to say no, and I enjoy the investment activities and operations activities I am involved in.”

Even though his daily work responsibilities are at OVC, Moncrief said he remains at the “epicenter of the CDFI (Community Development Financial Institution) world.” He is Chairman of the Board of Directors of the Community Development Venture Capital Alliance (CDVCA) and serves on the Advisory Board of Semillero Ventures. President George W. Bush appointed Moncrief to the Community Development Advisory Board of the CDFI Fund in 2008, and he was reappointed by President Donald Trump in 2017.

Moncrief referred to himself as a “do-gooder” and “fixer.” He enjoys doing anything he can “to help invest in small businesses in non-traditional geographies” and help “build businesses that create job opportunities.” He is also passionate about the problem with access to capital in the Appalachian region.

“I’ve served on various committees for the Appalachian Regional Commission on just this subject: a lack of access to capital for businesses in Appalachia,” he said. “And even on the very best day of the year — the banking community is agnostic to business formation in Appalachia.”

He applauds Three Roots’ work in providing capital and expertise to the rural and under-served greater East Tennessee region, and the work of his fellow board members, stating they are “fresh, delightful, and selfless in their intent.”

“They want to take their experience and put it back into the community, the whole East Tennessee area,” he said. “It’s exciting. Even though I have been in this for 48 years, there still is excitement about what we do.”

Revitalizing the South Waterfront District of Knoxville: Foggy Bottom Flats

Three Roots Capital supports the revitalization of the South Waterfront district in Knoxville. This effort requires increasing the number of high-quality housing options for residents and building restaurants, retail stores, and attractive job opportunities in the neighborhood. Three Roots is interested in partnering with developers and entrepreneurs to finance ongoing projects like the Foggy Bottom Flats development.

Foggy Bottom Flats is a multi-family housing development that opened for leasing in June 2020. The 14 townhomes are located only one block from Suttree Landing Park, along the Tennessee River, and a short distance from Knoxville’s 1,000-acre Urban Wilderness. Occupants are less than a mile from downtown Knoxville and within walking distance of numerous retailers, restaurants and breweries, including Alliance Brewing — a former laundromat. Brett Honeycutt, local architect, contractor, and lead developer of Foggy Bottom Flats, bought, designed, and renovated Alliance Brewing in 2015.

“As a property investor, it made sense for me to look down there,” Honeycutt explained about south Knoxville. “It was in an area that was just getting ready to kick off. … It was going to happen one way or another, so I’m not a catalyst for getting things started in south Knoxville, but what we did with Alliance helped.”

Honeycutt’s work on Alliance Brewing led to him getting involved in the resurgence of the craft beer scene in Knoxville. Over a three-and-a-half-year period, he became involved in architectural or contracting work for around 10 breweries in the area. Once his brewery projects began to slow down, he turned his sights on a final, large project on the south side before he went into semi-retirement: Foggy Bottom Flats.

Honeycutt and his wife Jan Conely originally tried to launch a multi-family, modern housing development in north Knoxville but were derailed due to the 2008 recession. In 2014, they bought the property where Foggy Bottom Flats is now located and started looking for contractors and partners in 2018.

They brought on several partners to develop Foggy Bottoms Flat due to the size of the project and not wanting to take such a large risk so close to retirement. Honeycutt’s partners include Jan his wife, Garry Ferraris, Brian Simmons, Tim Ewers, and Brian Ewers. He enlisted Dollar & Ewers Architecture to handle the design and renderings and Reagan Design + Construction for construction and design.

For financing the project, Honeycutt turned to Bryan Kilday, VP Commercial Lender at Renasant Bank, who he previously worked with on the Alliance Brewing project. Due to the nature of the Foggy Bottom Flats project, Kilday suggested Honeycutt and his team approach Three Roots Capital for financing. Three Roots provided a nearly $2 million loan for construction and permanent financing of the project.

“Three Roots is proud to partner with Renasant Bank on projects like this development that positively impact our community,” said Dennis Corley, Business Development and Community Relationships Manager at Three Roots. “Our team will continue to provide capital, connections, and expertise to entrepreneurs and high-quality developments throughout the greater East Tennessee region.”

“It’s been great working with Three Roots,” Honeycutt said. “We appreciate the assistance. I have encouraged other people to talk to Three Roots because I thought it was a great opportunity.”