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VOL. 125 | NO. 191 | Friday, October 1, 2010

Beale Street Chaos

Management of Memphis’ signature strip remains in flux

By Bill Dries

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Steven Gyant and Lisa Dickerson of Dallas pass the shuttered windows of the Ground Zero Blues Club on Beale Street on Tuesday morning.
Photo: Lance Murphey

Four months after Memphis Mayor A C Wharton Jr. announced the city was settling a Chancery Court fight over control of Beale Street with Performa Entertainment Real Estate Inc., Performa is in control of the daily business of the entertainment district.

As the multi-sided 10-year-old lawsuit headed toward a June trial date, special Chancellor Don Harris had appointed attorney John Ryder as the receiver of the district to run its day-to-day finances.

That ended with the settlement between the city and Performa in Chancery Court in June because it was accompanied by Performa filing for bankruptcy reorganization in federal bankruptcy court.

Welcome to the world of Beale Street where nothing is related and everything is connected.

“All of the money is collected by Performa. … I haven’t received any money since then,” Ryder said.

“I’m frozen. The real operations now are through Performa and they file with the bankruptcy court.”

The most recent report filed in bankruptcy court by Performa’s attorney is for the month of August.

It shows a net income for the month of $50,547.95

Performa founder John Elkington insists it’s not a permanent return to control.

“Not really,” he said.

“We are, but only on a transitional basis. … We communicate regularly with the city. We’re not doing anything they don’t want to get done.”

Elkington recently completed a 300-page report for the city as part of the transition.

This week he was honored with a note on the Beale Street Brass Note Walk of Fame. Elkington has been developer of the district, between Second and Third streets, since it opened in October 1983.

“We’re just waiting for them (the city) to settle their problems with the Beale Street Development Corp.,” Elkington said of one of the remaining issues in the Chancery Court lawsuit. “We’re just kind of waiting. We were resigned a long time ago to leaving and we’re comfortable with it. We’re more than happy to help the city. There is some confusion.”

The BSDC is the nonprofit middleman set up in the 1982 lease for management and development of the district. The city hasn’t reached any agreement with the BSDC. There is another part of the pending lawsuit that pits the BSDC against the Beale Street Merchants Association, the business owners who lease from Performa.

“We don’t know when they’ll be resolved,” Elkington said of those two parts of a complex formula for the district’s next chapter that began with the bankruptcy filing by Performa.

“It’s not because we don’t have any money,” he said. “We have plenty of money and we don’t have any liabilities. But that’s the way to ensure that all of these leases and all of these lawsuits are settled.”

On Sept. 20, the same day this month Ryder filed his last report with bankruptcy court, there was fresh evidence that what passes for day-to-day affairs of the district are not waiting on court decisions and documents.

The manager of Ground Zero Blues Club, at Hernando and Beale in the old Pat O’Brien’s building, was evicted with bar supplies being carted out onto the sidewalk.

A dispute among the owners and partners of the nightspot went from a Circuit Court lawsuit to a lawsuit with an eviction notice.

Memphis City Council members who questioned the terms of the Chancery Court settlement that was agreed to by Wharton had lots of questions about the Ground Zero closing.

A public committee session this week was closed as city attorney Herman Morris cited attorney-client privilege and met with the council privately.

Ken Hall, Performa’s spokesman, said the hope was the court dispute could be worked out and Ground Zero would reopen perhaps by this weekend.

As Elkington accepted his brass note a block away this week, there was no sign of movement.

“We’re working and trying to have a smooth transition,” Elkington said of the district as a whole. “We’re going to do whatever’s best for the city and whatever’s best for Beale Street.”

PROPERTY SALES 64 87 1,429
MORTGAGES 39 60 1,107