VOL. 126 | NO. 97 | Wednesday, May 18, 2011
Overnight River Cruises to Finance Beale Street Landing
By Bill Dries
Memphis Mayor A C Wharton Jr. Tuesday outlined a plan to Memphis City Council members to bring overnight and multi-night riverboat cruises back to Memphis as headquarters for the Great American Steamboat Co. The deal would also provide the funding to complete the stalled Beale Street Landing project.
The deal is a mix of 70 percent private investment from the newly formed riverboat company and a 30 percent investment in the form of a $9 million city loan of federal Housing and Urban Development funding to refurbish “American Queen,” the massive wooden riverboat GASC has a contract to buy. The purchase is awaiting approval of federal maritime administrators.
GASC would repay the $9 million with an $89 docking fee over a 10-year period from 64 trips a year that would begin or end in Memphis. Money from the docking fee would then go toward the $9.75 million needed to complete the $39 million Beale Street Landing project.
The landing was still a work in progress in 2009 when RiverBarge Excursions, the last overnight river cruise company, folded. A few months earlier, Majestic America turned over the 1927 Delta Queen to creditors following its final Mississippi River cruise.
The Beale Street Landing Project, managed by the Riverfront Development Corp., was more expensive than originally estimated and the cost overrun was obscured by the change in leadership at City Hall in late 2009, during which there were three mayoral administrations in rapid succession.
Now the construction site is under the Mississippi floodwaters with some damage from the rampaging river but no exact estimate possible until the waters begins to recede.
John Waggoner, president and CEO of GASC, is also president and CEO of HMS Global Maritime. Waggoner said he was initially talking with Mississippi officials and the talks hit a snag when they conditioned the deal on the American Queen docking in Tunica, Miss., with no stops in Memphis.
The Memphis GASC headquarters and warehouse is expected to employ 250 to 300 people, according to Wharton, who first talked of the deal in general terms at a campaign fundraiser last week.
The Greater Memphis Chamber estimates the cruises would bring 21,827 visitors to Memphis a year.
“It fits hand in glove with who we are,” Wharton told council members, who are to vote on a resolution approving the loan agreement. “Sometimes we stray from that. We have to go back to our roots. … Memphis is back. We’re playing on our strengths.”
The Memphis Convention and Visitors Bureau has been working with GASC on the deal as well.
“Animation on the river is something that’s been missing for a long time,” said CVB president Kevin Kane.
Kane said the overnight riverboat cruise business has led One Beale hotel developer Gene Carlisle to explore trying to find financing for his luxury hotel project that ran headlong into the national economic recession.
The riverfront is already home to Memphis Riverboats, a 56-year-old sightseeing and cruise business that offers daily sightseeing excursions along the river around Memphis, as well as dinner cruises and private parties.
Meanwhile, council members attached an amendment to the GASC resolution to include $4 million in city capital funding toward the $6 million parking garage and drainage area for Overton Square redevelopment. The funding is to meet a June 30 deadline on financing for the project. Tax increment financing revenue to come later and finance the redevelopment would repay the city for the capital funds.