VOL. 129 | NO. 233 | Monday, December 1, 2014
EDGE Approves Graceland Taxing District
By Amos Maki
A special taxing district to help pay for a massive redevelopment of the sprawling Graceland campus is one step closer to reality.
The board of the city-county Economic Development Growth Engine approved Tuesday, Nov. 25, the creation of a Tax Increment Financing, or TIF, district around Graceland, one of the city's most visited attractions and powerful economic engines.
The EDGE board approved a special taxing district to help fund improvements to the Graceland campus, including a resort-style 450-room hotel called the Guest House at Graceland.
(Courtesy of Elvis Presley Enterprises)
The TIF will collect incremental increases in property tax revenue to help pay for major improvements to Graceland and the immediate area around Elvis Presley's former mansion in Whitehaven, including a resort-style hotel.
The Memphis City Council and Shelby County Commission must still approve the creation of the TIF district.
TIFs, in essence, pay for public or private improvements out of future growth in taxes attributed to the project.
EDGE plans on issuing up to $125 million in revenue bonds to help fund a series of improvements to the Graceland campus, including the planned 450-room hotel, improved exhibits and new attractions and retail.
The goal of the ambitious project is to maintain Presley's iconic image and greatly enhance the visitor experience at Graceland, injecting new life into the attraction for the next generation of visitors to the legend's home. Graceland hosts 600,000 visitors annually, making it the third-most visited home in the U.S. behind the White House and Biltmore.
“We have great faith in Graceland and have always believed in its long-term future, but it needs to keep evolving with the future, with new eyes and ears,” said Jack Soden, CEO of Elvis Presley Enterprises. “It's a step-by-step process but (the creation of the TIF) was a really important one.”
The funds from the TIF will be used to pay off the bonds issued to fund the improvements. In addition, Elvis Presley Enterprises is seeking the creation of a state-designated Tourist Development Zone, which captures incremental increases in sales tax, and will add a 5 percent sales tax surcharge on purchases within the district, to pay off the debt.
If the TIF, TDZ and tourism surcharge don’t generate enough revenue to pay off the bonds, the city and county will not be obligated to cover the difference.
The TIF and TDZ zones are site-specific, meaning they cover only the Graceland campus property owned by EPE. If additional tax revenue is realized outside the zone, it accrues to the city, county and state.
After construction is complete, the project is expected to produce $2.1 million in incremental taxes annually. EPE intends to use only half of that revenue – the minimum amount allowed by the state – to support the project. The rest will flow to the city and county. The property brought in $689,000 in property tax revenue to the city and county in 2013.
In a few years the current Graceland campus and surrounding Whitehaven neighborhood, including a long stretch of Elvis Presley Boulevard, will look vastly different.
After patiently buying properties around the mansion over a period of decades – the Graceland campus now totals roughly 120 acres – EPE is prepared to create a more immersive, interactive experience, one the company hopes will lead to longer visitor stays.
A preview of that experience debuted this summer when Graceland introduced iPads as tour guides instead of the standard audio tour guide.
Other improvements include the Guest House at Graceland hotel, updated displays and exhibits and a new, 200,000-square-foot ticketing, retail, exhibit and meeting development on the west side of Elvis Presley Boulevard that will replace the converted strip retail center built in the 1950s.
“We've got coats of painting holding it up now, I think,” Soden joked about the current visitor complex.
And over the next three to five years the city and state will spend around $43 million improving Elvis Presley Boulevard.
“As I travel around the world trying to recruit business to Memphis, still the most recognizable thing about the city, and something I hear everywhere I go, is Elvis, so we have to protect that legacy and continue to make it a really top-notch place where people want to come,” said Mark Herbison, senior vice president of economic development at the Greater Memphis Chamber. “I think this plan is going to raise the number of visitors coming to town, bring new revenue and keep Elvis at the forefront of people's minds around the world.”