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VOL. 126 | NO. 155 | Wednesday, August 10, 2011

American Queen Steamboat Will Call Memphis Home

By Bill Dries

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The city of Memphis now owns a $9 million interest in The American Queen steamboat, the only overnight cruise boat working the Mississippi River when it leaves its Memphis port in April.

“People were saying that steamboats would no longer be seen on the Mississippi River just last year. Now we have the largest, grandest steamboat to ever sail the Mississippi River be home-ported at Memphis.”

–Benny Lendermon
President, Riverfront Development Corp.

When the U.S. Maritime Administration signed off on the sale of the massive steamboat to HMS Global Maritime and its Great American Steamboat Co. subsidiary this week, it was a milestone in a complex, fast-moving deal.

The deal’s terms were more specific this week than earlier this year when the venture was tentatively announced.

For passengers boarding in Memphis, the start of the trip will mean an overnight stay in Memphis hotels. It will be part of the package booked by GASC that should be a bonanza to the city’s hotel industry as well as the hotel-motel tax revenue stream.

“We’ll be buying 7,000 to 10,000 room nights a year in Memphis – not recommending our guests go buy them. We’ll be booking them and giving them to our guests,” said GASC CEO Jeff Krida.

The $89 boarding fee each passenger pays at the outset of the journey goes to repay the $9 million advance the city is making from its U.S. Housing and Urban Development loan fund and to pay the cost of completing the Beale Street Landing project at the foot of Beale Street.

The new wrinkle is that the boarding fee goes to Memphis even if a passenger boards in another city elsewhere along the river.

GASC executives said earlier this year that they first approached tourism officials in Tunica, Miss., about being the home port for the American Queen. The deal fell through when those on the Tunica end wanted a specific prohibition on the boat stopping in Memphis.

Krida added details to the Tunica chronology this week.

“We spent six months in another state south of you working with the economic development authority. They struggled with understanding what this business does,” he said.

A call to Tennessee Gov. Bill Haslam’s administration in Nashville led the group to the doorstep of Memphis Mayor A C Wharton Jr. who had already seen and absorbed their business plan before GASC arrived in town.

The city, as well as the local private investment group led by Pittco Management and J.R. “Pitt” Hyde, were no pushovers. They got and called a list of travel agents and tour operators Krida and others with GASC were saying had expressed a desire to book rooms on The American Queen to see if that was true.

The deal, according to Krida, gives the private investors “a pretty healthy rate of interest.” But it was the best reception the steamboat company had seen in a year and a half of trying to resurrect a business that didn’t exist any longer on the Mississippi River.

“This has not been a climate to raise senior debt financing for a leisure product that’s gone out of business twice already,” Krida added. “This was the most efficient economic development organization I’ve ever worked with.”

Wharton sees the 112-year-old company, previously known at the Delta Queen Steamboat Co., as a natural fit for the city’s riverfront and a savior for the troubled Beale Street Landing project that was short of federal funding to finish out the park area atop the landing.

Riverfront Development Corp. President Benny Lendermon wasn’t shy about reminding critics of Beale Street Landing that some had questioned a boat dock on a river with no overnight cruise industry.

“People were saying that steamboats would no longer be seen on the Mississippi River just last year,” he said, pointing out the landing is capable of docking cruise boats now. “Now we have the largest, grandest steamboat to ever sail the Mississippi River be home-ported at Memphis.”

PROPERTY SALES 51 426 3,824
MORTGAGES 27 229 2,508
BUILDING PERMITS 178 829 8,785
BANKRUPTCIES 35 152 2,056