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VOL. 127 | NO. 144 | Wednesday, July 25, 2012

Beale Street Blues

Lengthy process of settling district’s management faces another delay

By Bill Dries

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Last September, a working group appointed by Memphis Mayor A C Wharton Jr. completed its work on recommendations for the future of Beale Street.

Musician Adam Warren plays a solo guitar at Handy Park on Beale Street Tuesday, July 24. Management of the famed entertainment district is up in the air as parties await a ruling from a bankruptcy judge. 

(Photos: Lance Murphey)

The report has been printed and boxed up – but it won’t be released until a judge settles the federal bankruptcy case embroiling the entertainment district.

The city of Memphis and Performa Entertainment Real Estate Inc. reached a settlement more than two years ago to a civil case over management of the district in Chancery Court that included Performa’s filing for bankruptcy at the same time as part of the process.

Wharton called a press conference to announce the agreement that had eluded his two predecessors as mayor – Willie Herenton and Myron Lowery. And he anticipated maybe a few more months of negotiations with the third player in the lawsuit – Beale Street Development Corp.

More than two years later, there is no settlement in bankruptcy court.

BSDC has objected to the settlement of the bankruptcy case, which would effectively put the city of Memphis in direct control of the day-to-day affairs of the district.

BSDC is the nonprofit group that is the middleman between the city of Memphis and Performa Entertainment. The city of Memphis has leased the property it owns in the district to BSDC, which then subleased it to Performa, led by developer John Elkington.

“Two years is a long time,” said Elkington, whose firm continues to run Beale Street for the city until there is a bankruptcy settlement. “I thought it would be over in two months.”

Federal Bankruptcy Judge Jennie Latta is scheduled to hear from all sides in the case Wednesday, July 25. A total of 19 separate motions and filings in the case are on her docket, each one listing a group of 26 attorneys representing the debtors, creditors and others in the legal proceeding. And another continuance in the multi-sided case is likely.

Jeff Sanford, who chaired the working group, said city attorney Herman Morris advised him to box up the report late last year and not let anyone see it until the bankruptcy case is settled.

Riders with the Segway Experience of Memphis stop at Second and Beale during a tour. Management of Beale Street is tangled up in bankruptcy court.

“The final report was written and printed in September of last year,” Sanford said. “The copies of the report, well, I’m not going to tell you where they are. The plan has been all along to call the mayor’s committee together with the mayor and present to him the committee’s findings and suggestions.”

The working group made recommendations on future management of the district from that point on.

“I really feel very good about the report and the suggestions, I think some of which will really address the general situation on Beale Street – not just security – but governance,” Sanford said. “I think that the options for future governance post-Elkington are acceptable to the merchants, the tenants. I think it will all stand Beale Street in good stead.”

Some of the discussions have focused on the street’s musical direction as well with some members of the group favoring a better blend of music of the 1960s along with the urban electric blues that are the staple of the district’s live venues.

Wharton has said he does not envision the city running the district. But the options include a new management firm to replace Performa under different terms or some kind of new lease arrangements with tenants in the district that might even permit them to buy the properties over time.

Sanford is offering no clues on the options that were being discussed even before the Chancery Court settlement.

Elkington says the leases now in place will make any dramatic change in those arrangements something that is a long way off.

“Everything is leased for 24 years,” he said. “Unless people fail in their businesses, there’s not a whole lot of change that can be made there … unless they expand it.”

Elkington and city leaders have talked of expanding the entertainment district that runs from the east side of Second Street to the west side of Fourth Street either north or south or both.

Elkington says a lot has changed in the district in two years – so much that the committee’s report might need to be updated.

Next month, a Memphis police substation is scheduled to return to the district complete with the police museum that was a popular and free attraction for many visitors to Beale Street.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 70 224 13,880
MORTGAGES 105 298 18,124
FORECLOSURE NOTICES 0 39 3,544
BUILDING PERMITS 0 430 32,733
BANKRUPTCIES 75 205 13,208
BUSINESS LICENSES 23 68 4,773
UTILITY CONNECTIONS 103 307 20,206
MARRIAGE LICENSES 0 33 4,230

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