A 3-square-mile Tourism Development Zone would finance a $233 million renovation of the Mid-South Fairgrounds sought by the administration of Memphis Mayor A C Wharton Jr.
A Tourism Development Zone would finance a $233 million renovation of the Mid-South Fairgrounds.
(Daily News File/Lance Murphey)
The city sent its 88-page application Sept. 13 to Tennessee Finance Commissioner Larry B. Martin. The application seeks state permission to use incremental sales tax revenue estimated at close to $12 million a year starting in 2016 to pay off the bonds to finance a project whose price tag is just below the $250 million FedExForum.
The city’s application estimated the zone’s retail sales were $201.8 million in 2012, generating $16.9 million in baseline sales tax adjusted to take out the 0.5 percent of the sales tax that is set aside for education funding.
The first year of the flow of sales tax revenue within the zone back to the Fairgrounds project would be 2016. And the city estimates the incremental net new sales tax flowing into the project for 2016 would be $11.9 million “assuming full build-out and full occupancy,” according to an analysis by RKG Associates Inc.
Application for Certification of Memphis Fairgrounds Tourism Development Zone
The boundaries for the zone include the Overton Square entertainment district as well as the Fairgrounds property. It also takes in the Cooper-Young Historic District as well as the prime retail section of Union Avenue’s Midtown corridor, including the intersection of Union and McLean Boulevard and the Midtown Kroger, which is about to expand. The Fairgrounds is in the southeast corner of a zone that reaches from Southern Avenue to North Parkway.
Wharton and city Housing and Community Development Director Robert Lipscomb have said since last year the zone would take advantage of sales tax revenue generated from the revitalized square.
Of the 5 million square feet in the Fairgrounds footprint, 1.7 million is the sports complex that would be south of Tiger Lane. The complex is an indoor sports building as well as outdoor fields. It would include a new “world championship” skate park presumably replacing the skate park the city built and opened in Tobey Park just two years ago. Tobey Park would also be renovated as part of the project.
The 511,200-square-foot retail, commercial and housing area in the Fairgrounds footprint is north of Tiger Lane in the area behind the Kroc Center and Fairview Middle School, which front on East Parkway and Central Avenue.
The retail and housing would coexist in an “urban village type setting” that includes a 120,000-square-foot “anchor store and up to 280,000 square feet of other retail development.”
It represents a middle ground in thinking about on-site retail that would generate sales tax revenue that goes back into the larger project.
Developer Henry Turley’s original idea was a big box store at or near the corner of East Parkway and Central Avenue. But Turley’s Fair Ground LLC never got the green light from then-Mayor Willie Herenton.
Later, Lipscomb said he favored a mix of smaller retail combined with the sales tax revenue from Overton Square to fuel the TDZ. But a 120,000-square-foot anchor store would clearly be a big box retailer, although the other retail square footage would be more than twice that space.
The plans also include a 180-room hotel of 111,400 square feet.
The application lists among the “local public investment” in the project demolition of the Mid-South Coliseum and the Pipkin building as well as a relocation of the gymnasium of Fairview Middle School.
The public funding totals $176 million including past efforts like Tiger Lane and two phases of renovations to Liberty Bowl Memorial Stadium as well as future plans like the $8 million “family tourist attraction.”
The list also includes a contingency fund of $16 million.
The biggest ticket items on the public investment list are $32 million for retail and commercial development including hospitality and housing and $30 million for a new multi-purpose building.
The application counts $26 million worth of Overton Square redevelopment among an estimated $133.5 million of private investment within the zone.
The largest dollar figure on that list is $42 million in retail construction on the Fairgrounds site.