VOL. 127 | NO. 214 | Thursday, November 01, 2012
Judge’s Ruling Moves Beale’s Future Forward
By Bill Dries
For at least a year, a box containing copies of a report on the future of Beale Street has been in storage awaiting a settlement of the two levels of court disputes for control of the entertainment district.
Plans for a second wave of development in the Beale Street Entertainment District are a step closer with a federal bankruptcy court ruling this week.
(Daily News File Photo: Lance Murphey)
The report of a city task force on the future of the district between Second and Fourth streets was ordered sealed by City Attorney Herman Morris until the disputes are settled.
No one is ready to open the box and pass out the reports just yet. But a ruling by U.S. Bankruptcy Court Judge Jennie Latta Tuesday, Oct. 30, is a step toward making sure the box is close by.
Latta ruled that Performa Entertainment Real Estate Inc. is not in default of its sublease with the Beale Street Development Corp. With that finding, Performa, which has managed and developed the city-owned properties since the renovated district opened in 1983, can now reassign its lease to the city of Memphis.
The claim by the development corporation, which acted as a middleman between the city of Memphis and Performa by virtue of its master lease with the city, has held up plans by the city to move to a second phase of development for Beale Street.
Memphis Mayor A C Wharton Jr. made the settlement of a multi-sided Shelby County Chancery Court lawsuit a priority shortly after becoming mayor in 2009. He and Performa founder John Elkington negotiated a settlement in 2010 that included the departure of the company and Elkington from management of the district. Performa then filed bankruptcy reorganization as part of the settlement with a plan to assign the lease to the city.
Wharton has said the city wants to retain day-to-day control just until it figures out a future plan for the district that could include a new management and development firm to run the district or allowing store and restaurant owners who lease space to buy the space or some measures that are a combination of the two. The task force headed by former City Council member and Downtown Memphis Commission president Jeff Sanford also discussed such items as the kind of music that should be emphasized in the district. And it discussed an expansion of the district.
A set of recommendations are in the report that has been effectively sealed for the duration of a legal dispute that was supposed to be shorter than what had been a march to litigation and court decision during the administration of Mayor Willie Herenton.
Once Wharton got the settlement with Performa, attorneys for the corporation contested the lease assignment from Performa to the city of Memphis. Two years later it led to a two-day hearing before Latta that began Monday. As the nonprofit corporation contested the lease assignment, day-to-day control of the district has reverted back to Performa.
Still to come is a ruling from Latta on the terms of Performa’s bankruptcy settlement.
Then the complicated legal drama shifts back to Chancery Court where the city and the corporation either try to work out their own settlement or go to trial.