Enhanced Capital’s Impact Real Estate group and Crossroads Impact Corp (Crossroads) are proud to partner with developer Four Stones Real Estate, LLC to support economic activity in South Knoxville, TN. Through federal Historic Tax Credits and a bridge loan provided by Enhanced Capital, the former Kern’s Bakery is being redeveloped into an innovative mixed-use community after years of vacancy and voided development attempts. Redevelopment of the historic building will serve as a catalyst for organic growth and revitalization for the surrounding community.

Adaptive reuse of obsolete buildings such as this one results in a drastically reduced need for heavy construction materials such as steel and cement, which are some of the most carbon-intensive manufacturing industries worldwide.

The building has a long history of prominence in Knoxville, and together with its distinctive architecture and neon sign on the roof, is a recognizable feature of Knoxville’s industrial past. Kern’s Bakery was one of the first deals in the nation to close in an opportunity zone as designated by the U.S. Treasury Department. Enhanced Capital’s financing will help bring the vacant, historic structure back into productive use, renovating the building into “The Kern’s Bakery Food Hall.” The 75,0000 square foot Kern’s Bakery site will offer a 20-merchant food hall, a market, restaurants, chef-driven eateries, unique retailers, office space, an indoor entertainment stage, a workout space, and a gathering space. The building will also include amenities such as free onsite parking, free high-speed internet, direct access to a proposed three-mile trail, and proximity to Knoxville’s urban wilderness.

Originally built in 1931, the site served as a large-scale regional bread production facility for almost 100 years. Kern’s Bread brand was purchased in 1989 by Sara Lee, who continued to use the production facility until 2012. After years of unsuccessful attempts by various developers, Four Stones Real Estate IV purchased the 16-acre site and started the redevelopment in 2019. The redevelopment of Kern’s Bakery Food Hall is the second phase of a three-phase development. Phase one, Flagship Kerns, one of the country’s first qualified opportunity zone business (QOZB) projects, is a 160-unit luxury apartment community geared towards University of Tennessee students and young professionals, while phase three contemplates a mix of uses, both financed separately. Each phase will create temporary and permanent jobs, foster increased use of the shared community space, and generate economic activity within an Opportunity Zone with a poverty rate of 48% and an area median income of 62%.[1]

Enhanced Capital’s Impact Real Estate projects focus on improving renewable and energy efficiency measures, historic building preservation, community redevelopment, and affordable housing. The Firm’s participation in the Kern’s Bakery project aligns with the firm’s focus on real estate projects across the nation by driving impact through economic growth, job creation and retention, and environmental sustainability.

Enhanced Capital and Crossroads have partnered to positively impact communities across the US by enriching their economic vitality. An advisory agreement enables Enhanced Capital to source, underwrite, and manage impact credit assets on behalf of Crossroads, directing much-needed capital to investments in Enhanced Capital’s core strategies of Climate Finance, Impact Real Estate, and Small Business Lending in underserved communities.

[1] “NMTC Mapping Tool.” New Markets Tax Credit Resource Center, Novogradac, October 2022, www.novoco.com/resource-centers/new-markets-tax-credits/data-tools/nmtc-mapping-tool.