VOL. 128 | NO. 203 | Thursday, October 17, 2013
Beale Street Deal Would Pay Handy Park Debt
By Bill Dries
The settlement of the last remaining item in the bankruptcy petition of Beale Street developer Performa Entertainment hasn’t gone by any of the scripts the administration of Memphis Mayor A C Wharton Jr. has written and rewritten.
(Daily News File/Lance Murphey)
The latest version approved Tuesday, Oct. 15, by the Memphis City Council taps into a $1.7 million city fund that has been dormant for at least a decade.
If it is acceptable to U.S. Bankruptcy Court Judge Jennie Latta next month it likely would remove the last barrier to direct day-to-day control of the Beale Street entertainment district by the city of Memphis.
The $400,000 from the “Midtown Corridor Fund” of federal money given to the city in the late 1980s combined with $100,000 in revenues that have come to the city from the Beale Street district would be used to pay off a loan Beale Street developer John Elkington took out for improvements he made to Handy Park.
The corridor fund is money the federal government paid the city of Memphis in 1989 by order of Congress for the land it cleared of homes to make way for an extension of Interstate 40 through Overton Park. The interstate was stopped by a case that went all the way to the U.S. Supreme Court.
The corridor fund has $1.3 million left in it after the amount for the Performa settlement, according to city finance director Brian Collins.
If Latta accepts the plan, it would complete Performa’s bankruptcy case.
Performa’s bankruptcy filing was part of a series of actions settling the legal dispute between the city and Performa. Still unresolved in Shelby County Chancery Court is a lawsuit among both parties and Beale Street Development Corp., the nonprofit middleman between the city, which owns the district, and Performa, which subleased from the BSDC.
If Latta accepts the arrangement on the Handy Park debt, it could lead to Performa’s exit and then direct city control of the district for an interim period as the city seeks to hire first an interim management firm as it solicits requests for proposals from management firms to run the district long term.
The city’s first settlement plan was for a group of Beale merchants to lease Handy Park from the city and in the lease also be responsible for paying the $500,000 debt. The plan didn’t have enough support on the council. The administration then proposed using just revenues it had collected from the district before abandoning that for this week’s resolution.
The council also delayed action Tuesday on a proposed new McDonald’s restaurant at the southeast corner of Highland Street and Southern Avenue. Neighbors oppose the loop drive-through that Century Management, the developers, say is essential. The setback from the street involved with such a drive-through violates terms of the University District overlay.
Cindy Reaves, representing Century Management, told the council the developers are willing to compromise and put the building at an angle on the lot but still insist on keeping the drive-through. The alternate plan is being reviewed by McDonald’s corporate office.
Reaves wanted a delay to Dec. 17 to “hopefully come to some kind of compromise on an alternate plan other than the one that is before the council.”
The McDonald’s would be on the corner lot that has been the long-time home of Southern Meat Market as well as Whatever smoke shop. It would replace a McDonald’s on the other side of Highland and to the south.
But attorney David Wade, representing homeowners in the area, said as long as there is a drive through loop that violates the overlay, there is no compromise.
“It does not change and does not address in any way the basic objection that all of these people in the university area have,” he said. “There is no avenue for us to be able to reach an agreement. There is only one thing my clients want.”
Reaves said an estimated 70 percent of the new McDonald’s business will come from the drive through lane.
“We are willing to do whatever we can to make this loop more palatable,” she said. “The overlay was never written to let drive through lanes function effectively and safely. … In that area, in this market, we don’t have a lot of walkers.”
Council member Jim Strickland opposed the delay saying there has been enough time to work out a compromise.
“If after five months they couldn’t settle it and they are not going to budge on an important issue, it’s not going to be settled,” he said.
Council member Harold Collins, who worked at the McDonald’s on Highland as a University of Memphis student, said the restaurant chain is also a long-time part of the retail strip. And he recalled that he and his friends often walked from the campus to the restaurant.
“I would hope that the spirit of compromise would work well with the neighbors in that community,” he said. “That McDonald’s has been a mainstay there. If they want to truly be a part of the community, they will work very hard to make that happen.”