VOL. 123 | NO. 42 | Friday, February 29, 2008
Officials Want Would-Be Pyramid Developers To Put Up or Shut Up
By Bill Dries
CUT TO THE CHASE: "Show us the money," Memphis City Council member Shea Flinn told developer Greg Ericson Wednesday at a joint city-county session on proposals for The Pyramid. The group of 19 reached an informal consensus that a working group, including real estate and finance experts, should negotiate with Ericson's group and Bass Pro Shops officials at the same time. -- Photo By Bill Dries
Shelby County Board of Commissioners members and their counterparts on the Memphis City Council don't seem to be interested in seeing anymore artist renderings or PowerPoint presentations of what might be in The Pyramid.
When 19 of the 26 members of both bodies got together for three hours this week at the Shelby County Administration Building, most wanted to see proof - proof that Bass Pro Shops or The Ericson Group can finance and sustain their respective plans for The Pyramid.
Commissioners and council members reached an informal consensus at the session that they will put together a working group - a team including financial and real estate experts to negotiate with the two companies.
"Let's look at both of them in the same room at the same time," is how Commissioner Joyce Avery put it.
Time to talk turkey
Once in the room, council member Shea Flinn told developer Greg Ericson the drawings and plans should give way to one concern - "Show us the money."
The difficulty in doing that surfaced several times Wednesday. Ericson was reluctant to make public proprietary details about his financing package, which most of the elected officials understood. Those details would be offered to the working group without them having to be made public.
Several of the elected officials suggested that the two competitors put several million dollars each in an escrow account and each present a letter of credit from financial institutions at the outset of the process.
"We just want to know we have a deal," Ericson responded. He said several more times that those involved in his project would be willing to put money in escrow and produce the letter of credit when the city and county sign the deal with them to develop The Pyramid, not before.
Ericson also insisted that his group has put its financial bona fides on the table already in private discussions with both administrations.
County Chief Administrative Officer Jim Huntzicker, however, said the information represented a "very preliminary overview."
"We simply got to a point of saying, 'Yes, there'd be a reasonable expectation that if we sat down we might be able to get to a point of coming up with an acceptable financing package for the city and the county,'" Huntzicker said. "That's miles apart from what we were trying to get to."
Expert opinions needed
The working group was suggested by Commissioner Mike Ritz, who said the next step for both projects needed to be handled as if negotiations were just beginning. He also said the government side of the negotiations requires someone who has negotiated large and complex real estate transactions numerous times.
"There are people in Memphis - Boyle, Belz, Mid-America (Apartment Communities), Poag & McEwen - who have done business with businesses like this, of this kind of size and complexity. I think we need someone of that character and capacity to advise us on the best side of the real estate," Ritz told The Daily News before Wednesday's meeting.
"I think (negotiations) are just beginning. I'm sure some people think they're about to end. The thing is that there really hasn't been much public discussion about it in the realm of the County Commission and the City Council. ... The substance of (the Bass Pro) proposal has never met the light of day."
Commissioner Wyatt Bunker said later that the working group could recommend rejecting both proposals.
"We're going to negotiate both deals simultaneously. And then we're going to ask that team to come to us with a recommendation in short order so we can definitively say we want Bass Pro or we want Ericson or we want neither. And if we want neither, we wipe the slate clean and move forward from there," he said.
May the best group win
The idea of a working group consisting of Huntzicker, Lipscomb, one council member and one commissioner, as well as the financial and real estate experts, still must be considered formally by committees on both sides of the Main Street Mall. The idea could go to the full council and full commission for separate votes some time next month. If approved, negotiations would follow immediately.
Lipscomb enthusiastically agreed with the approach.
"That's the best news I've heard. ... I don't think it should take that long," he said after the meeting, which he also attended.
Bass Pro officials weren't present Wednesday and haven't been at any of the discussions to present their plan. Wednesday's meeting was Ericson's opportunity to make his pitch for a Pyramid-only plan after last week's presentations by Lipscomb of the terms of Bass Pro's tentative development agreement. In those presentations, Lipscomb said he thought the Bass Pro proposal was the better of the two.