Three Roots Capital Spotlight: Dr. Marianne Wanamaker, Board Member                 

Three Roots Capital is pleased to announce that Dr. Marianne Wanamaker has joined the board of directors. Wanamaker is an associate professor of Economics at the University of Tennessee (UTK), a research associate at the National Bureau of Economic Research, and a research fellow at the Institute of Labor Economics (IZA).

She is a member of the Federal Workforce Policy Advisory Board and previously served as the former chief domestic economist at the White House Council of Economic Advisors, where she also served as the senior labor economist. Among her numerous professional accomplishments, Wanamaker is a recipient of the 2019 Kenneth J. Arrow Award, serves as co-editor of Explorations in Economic History, and has received several college and university-level teaching awards, including UT’s Alexander Prize in 2019.

Wanamaker’s research interests include labor economics and workforce development, education, American economic history, and demography, making her an excellent addition to the board. Speaking about her appointment, Wanamaker expressed that she’s “thrilled about the opportunity” and looking forward to learning from her fellow board members’ experiences.

“It will be fun to bring the perspective of someone who has recently been in Washington D.C., thinks about labor markets all day long, and has a totally different perspective on economic development than they do,” she added. “I believe our expertise and experience will complement each other very well.”

Wanamaker met both Chris Miller, chief financial officer, and Grady Vanderhoofven, president, chief executive officer, and board member, at university-sponsored events several years ago. They remained in touch due to their “shared interest in economic policy and the big picture.”

“The work Three Roots does is incredibly important,” Wanamaker shared. Three Roots’ mission to promote economic development in the region addresses an important gap in development economics research because plenty of “money, time, and effort” in the economics profession today is dedicated to international contexts, rather than “development within U.S. borders,” she said.

“Economists have documented that people in developing countries can improve their standard of living with access to capital. Once you’ve given them capital, economists have also shown that borrowers need coaching and support,” she continued. “International research is good, but it has surprised me — as I am from rural west Tennessee — that a lot of these stories are also true in the U.S. and seem to be completely ignored by the economics profession. We just don’t do research on what works in Appalachia.”

Wanamaker said her time working in Washington D.C. taught her that the federal government understands that access to capital is a real issue for many areas of the country but needs economists to pay attention to “what works and what doesn’t.” She said she is excited to be “on the ground” and have a “firsthand view” of what is going on in the economic development sector through the lens of Three Roots.

Two of Wanamaker’s favorite aspects of her work are the people she encounters and the stories she tells in her research. She expressed that this appointment both fulfills her desire to build more connections and share her expertise with her community.

“A big part of the mission of the University of Tennessee is to be engaged in our community and to take the expertise we use every day and spread it and share it with the people and groups outside of campus,” Wanamaker explained. “I can’t think of a better way to do that than to be on this board. Three Roots is doing so much good. It really is a perfect match.”

Forging valued partnership, connecting a vibrant city, and restoring a historic structure: Model Mill               

Three Roots Capital values its partnerships with skilled developers and financial institutions who support its mission to promote sustainable, meaningful economic development in Eastern Tennessee communities.

This commitment to forging high-quality relationships led Three Roots to connect with Grant Summers, president of Summers-Taylor, Inc., who was seeking financing for the Model Mill project in downtown Johnson City.

Three Roots’ Chief Financial Officer Chris Miller explained how Three Roots was drawn to the Model Mill project because of the Summers family’s commitment to creating value in their community through undertaking such a large-scale, challenging, historic renovation. Due to higher-than-average construction expenses, in addition to other challenges and limitations, Three Roots’ connections, expertise, and access to capital were the right fit for the project’s needs.

Originally built in 1908, the Model Mill operated as a flour mill for nearly 100 years before the property was abandoned in 2003. Over the next few years, many developers and community groups attempted to develop the property without success. By 2014, the Tennessee Preservation Trust had listed the building on its top-10 endangered properties list after it had fallen into disrepair, serving as a barrier to connecting the thriving development efforts in downtown Johnson City and East Tennessee State University’s (ETSU) campus. This problem was further exacerbated when an arsonist set fire to the property in early 2016.

Summers-Taylor, Inc. purchased the property in late 2016, with plans to restore the building and property and transform it into a commercial, mixed-use facility. The facility will provide space for the headquarters of Summers-Taylor, Inc., the Johnson City Chamber of Commerce, ETSU’s program offices, and possibly additional tenants.

The project is located in a severely distressed census tract in Johnson City, with a poverty rate of 39.4 percent. It is expected to create or retain 164 permanent jobs in the area. The goal of the project aligns with the economic development strategy for the city, the local development district, and the Appalachian Regional Commission. In addition to providing direct financing for the project, Three Roots encouraged Summers-Taylor, Inc. to pursue New Markets Tax Credits (NMTCs) as a financing mechanism, introducing them to BrightBridge, which is an organization based in Chattanooga, Tennessee, that specializes in NMTC financing transactions.

“This project really makes a difference in the community for several reasons, including the high-quality jobs it’s going to create and locate in that area, the fact that we’re preserving a historic structure, and the way this project connects the university and downtown regions of Johnson City,” said Miller.

In addition to making multiple direct loans to the project over time, Three Roots worked with BrightBridge to secure additional capital for the project from several, well-respected financial institutions: First Horizon (previously known as First Tennessee), US Bank, Royal Bank of Canada, Citizens Bank, and People Incorporated Financial Services of Virginia. Total financing for the project amounts to $19.5 million, and Three Roots provided $10.6 million of the total financing.

“We want to work with the most capable, high-quality entrepreneurs, developers, companies, and financial institutions in our region,” said Miller. “The Model Mill project was another opportunity for us to do just that.”

Model Mill will be complete sometime in 2020.

Three Roots Valued Partner Spotlight:
Bob Cantler, President and CEO of Johnson City Chamber of Commerce

Bob Cantler is the new president and CEO of the Johnson City Chamber of Commerce, and a valued partner of Three Roots Capital. With his extensive background working in the hospitality and tourism industry and business development sector, he was a natural fit to assume his role at the Johnson City Chamber and to promote innovation and entrepreneurship throughout the region.

As the Chamber’s new leader, Cantler is focused on business development. The Chamber is focused on enhancing the community’s ecosystem to help startups, small businesses, and entrepreneurs thrive. He said Three Roots has been a great partner for the Chamber with this goal.

“There has been a lot of growth in East Tennessee recently,” Cantler said. “The community has great momentum in terms of economic development opportunities. It is a great time to be a part of that.”

Cantler is a Johnson City native who returned to the area with his family in 2001 to work for Meadowview Marriott Resort. In 2005, he became vice president and general manager of the General Morgan Inn, where he began working in business development for the Niswonger Group.

It was during his tenure at the Niswonger Group that he got to know Grady Vanderhoofven, who eventually would launch Three Roots Capital and today is Three Roots’ president and chief executive officer. In 2016, Cantler founded his freelance consulting business, Internity Development, and began exploring opportunities to work with Vanderhoofven and Three Roots.

Currently, Three Roots and Cantler are working on a high-impact, business-development, community-improvement project in Johnson City

“Their knowledge and experience has been phenomenal,” Cantler explained. “They have been a unique resource for how do you look at venture capital, in terms of the value community development financial institutions (CDFI) bring to our lenders and projects. They bring different resources, ideas, and concepts to the table, which is important if you want to be progressive in today’s world.”

In addition to the current project, Cantler has connected Three Roots with several organizations that are looking to move to the region and may require funding or support. Three Roots has also supported established organizations in the area.

“Three Roots has helped some of our larger employers in the area who are looking to branch into innovation, such as what questions do you need to ask and how do you vet a project,” Cantler said. “They’ve been an instrumental partner and a resource not only for myself but for several of my stakeholders.”

Revitalizing a community and creating jobs with the help of valued partners: Cherokee Crossing

Three Roots Capital is proud of its partnerships with high-quality developers and financial institutions that also support its mission to have lasting, valuable economic impact in the East Tennessee region.

Chief Financial Officer Chris Miller explained that everyone on the Three Roots team has a mix of relationship and business management responsibilities. It is this collaborative work environment that led Miller to bring the Cherokee Crossing project to everyone’s attention.

“I knew people involved in this deal,” Miller said. “We began talking about how Three Roots is focused on helping projects in low-income communities. Their project lined up very nicely with what we were trying to do, while we offered capital in a way that was supportive of their goals and objectives.”

In June 2017, Three Roots Capital provided an initial round of financing to Cherokee Crossing, LLC to fund the development of the 15-acre property in Morristown, Tennessee. The initial site plan involved a grocery store, a financial institution, and additional space for mixed-use retail development. The following January, Three Roots provided additional financing to build out a 17,000-square foot, mixed-use retail space. To date, the restaurants and retail tenants in the space have created 140 jobs for the community.

Hamblen County – where the Cherokee Crossing development is located – is predominantly low income and rural. According to the Appalachian Regional Commission, Hamblen is categorized as an economically “at-risk” county in the greater Appalachian region.  Tennessee categorizes Hamblen County as a “Tier 3 enhancement county,” which means the state has prioritized job creation within the county as a result of lagging economic performance within the county.

“Being able to fund a project that puts a grocery store, a provider of financial services, and restaurant and retail locations in a low-income area is not only creating jobs, it’s also providing goods and services to that community,” Miller explained.  He went on to emphasize the importance of working with quality partners like Southeast Bank, as well as David Fiser and the other principals in Cherokee Crossing, LLC.

Three Roots worked closely with Josiah Glafenhein and other members of the development team to understand the capital needs of the project. Three Roots then collaborated with Southeast Bank to provide capital for the project.

“Three Roots has been very helpful on this project, at the beginning and on an ongoing basis.” Glafenhein remarked. “Three Roots understood what we were doing, and they put together an attractive financing package.  We appreciate the value Three Roots brings to our projects and to our community.”

“We want to work with the best developers and banks in our market for many years to come, and this project is a great example of that,” Miller said. “Being able to work with exceptional partners on impactful projects is one of the things I enjoy most about working at Three Roots.”

Adding economic value to Morgan County: Historic Brushy Mountain State Penitentiary

Three Roots Capital is supporting a unique project in one of the most economically challenged regions of East Tennessee. Central to Three Roots‘ mission is creating real economic impact by supporting companies and projects that help people who need a hand up.

Brushy Mountain State Penitentiary in Morgan County, Tennessee, opened in 1896 and operated until 2009, housing notable criminals like James Earl Ray and Byron “Low Tax” Looper. For more than a century, it provided a stable base of jobs and positive economic impact in several rural counties. With the help of Three Roots and other partners, today, the prison is a popular tourist attraction, featuring a museum, restaurant, music venue, moonshine distillery and gift shop for curious visitors travelling to the Morgan County facility.

Operating Partner Pete Waddington first became interested in the prison during a visit to the location six years ago on a charity motorcycle ride from Chattanooga.

“My wheels just started spinning,” Waddington explained. “It seemed kind of strange that this place, with this much history, was just sitting here falling apart.”

Over the next few years, he worked with state and local agencies to repurpose the space but faced challenging financing hurdles. Despite spending years as a business developer, Waddington said Brushy Mountain was his hardest project to finance.

This struggle led Waddington to get in touch with Three Roots Capital’s Business Development and Community Relationships Manager, Dennis Corley, through a mutual friend in Chattanooga. Immediately, Corley admired Waddington’s work ethic and vision for the prison.

Looking forward, Waddington remarked he is most excited about the potential Brushy Mountain has to offer the surrounding community. From adding more than 50 jobs to Morgan County to expanding the site’s distillery production, Waddington wants to keep growing his operations and providing economic value to the region.

And who would he reach out to first to get started on these projects? Three Roots.

“I don’t think we would be open without the help of Three Roots,” Waddington said. “I can’t say enough great things about those guys. I will absolutely work with them again.”

You can read more about Historic Brushy Mountain State Penitentiary here.