VOL. 126 | NO. 161 | Thursday, August 18, 2011
Bass Pro, Pyramid Project Grows
By Bill Dries
The adaptive reuse of The Pyramid by Bass Pro Shops got about $105 million larger in scope this week.
The Bass Pro Shops conversion of The Pyramid has grown to become a broader revitalization of the area including the Memphis Cook Convention Center and other areas near The Pyramid. The Wharton administration plans to pursue the goals over a longer period of time.
The project now includes a $75 million city buyout of the county’s interest in the Memphis Cook Convention Center, $5 million more for what had been a $10 million city purchase of the Lone Star concrete facility by The Pyramid and a $25 million seismic retrofit of The Pyramid and the land bordering the Wolf River Harbor.
The new amounts are in addition to $63 million the Memphis City Council approved a year ago for the work to come on removing the seating bowl and getting the structure ready for Bass Pro Shops to begin its work.
Memphis Mayor A C Wharton Jr. told the council Tuesday, Aug. 16, the nearly $200 million in bonds can be paid with state sales tax revenue from the Tourism Development Zone that includes The Pyramid.
And he said the expansion of the adaptive reuse of The Pyramid to take in the convention center is key to a larger riverfront development plan still to take shape.
“When I was county mayor, we owned a piece of the land under The Pyramid,” Wharton said of the city buyout of the county’s interest in the convention center. “We had no control over the building. It was making it very difficult for the city to do anything. You don’t want anybody else owning a part of your front door. And that’s dollars for us to be able to walk into the room with the bond companies or whomever – be it developers for the Pinch – and say, ‘We own this as one body that’s in charge of this.’”
Development of the nearby commercial Pinch District remains separate from the Bass Pro Shops project and to be undertaken by the city of Memphis, according to Wharton. Bass Pro Shops executives had originally included it among their priorities along with The Pyramid, even hiring a developer at one point before backing off the wider scope.
The Wharton administration estimates the city of Memphis got $12 million in TDZ revenues last year and the amount is growing. The administration estimates once it is up and running, Bass Pro Shops at The Pyramid and its other attractions there would generate an additional $9 million annually.
The largest estimated annual subordinate debt to be paid on the bonds during their 18-year life is $17.9 million in 2031, the final year. The debt starts at $5.2 million in 2012.
“The TDZ clearly is a huge growth stream,” said Memphis Convention & Visitors Bureau president Kevin Kane. The CVB took over management of the convention center earlier this year. “TDZ grows a lot faster than the hotel-motel bed tax. The only way the hotel-motel tax grows is if rates go up or we have more hotels. … Basically all of Downtown Memphis now is one big TDZ for all practical purposes.”
The city buyout of the county’s interest in The Pyramid didn’t go easily and wasn’t without some bargaining.
And there is a difference. The city was clearly the lead government in all matters Pyramid.
Although the convention center is a joint government operation, Shelby County government has been the lead government of the two through the 2003 expansion of the convention center and the opening of the adjoining Cannon Center for the Performing Arts.
It was county government that pursued a lawsuit over construction of the center later.
The council Tuesday, Aug. 16, approved a bond resolution for $191 million in bond financing. Most of that $163 million is for a project construction fund. The remainder covers debt service reserves, capitalized interest and costs of issuance.
The Center City Revenue Finance Corp. would issue the bonds and is scheduled to vote on the bond resolution at its Aug. 23 meeting, two days after the County Commission would vote on the buyout of its interest in the convention center.