VOL. 129 | NO. 240 | Wednesday, December 10, 2014
Graceland Plan Clears Main Local Hurdles
By Bill Dries
Elvis Presley Enterprises attempted to secure private financing of its plan for a 450-room resort hotel and a remake of its plaza area, but those attempts failed, said Graceland’s bond counsel, because it is difficult for borrowers to get conventional financing for a hotel project.
The Shelby County Commission approved Monday, Dec. 8, the public financing of an expansion of the Graceland campus in Whitehaven.
(Elvis Presley Enterprises Inc.)
“They do very few hotels,” attorney James McLaren told Shelby County Commissioners Monday, Dec. 8, in the discussion before the commission approved the Graceland economic impact plan.
The plan, approved by the Memphis City Council last week, creates a Tax Increment Financing zone and a Tourism Development Zone to finance the project using the growth in city and county property taxes and sales taxes, respectively. The zones for each are identical. They are the 120-acre Graceland campus that is owned by Elvis Presley Enterprises – the site of the future development.
The third piece of financing is a 5 percent tourism surcharge on tickets and similar items sold in the same zone. The surcharge generates the largest part, $38.7 million, of the $76.8 million estimated total revenue over 20 years from the three sources.
McLaren also said the project will not take the share of sales tax and property tax that would go to the funding of local education. And he emphasized a part of Elvis Presley Enterprises will guarantee the bond debt should the revenue streams not produce enough money for the project.
Most of the questioning and criticism Monday came from Commissioner Walter Bailey.
He said he opposed the plan “basically on principle.”
“We want to see this area flourish and grow. I just take exception that this is the way to do it,” he said. “I think private ventures of this sort ought to be left to the private market. I think it’s unfair to other competitors. … I just think it’s a bad investment.”
Bailey cast the only vote on the commission against the plan. Commissioner Eddie Jones abstained.
Meanwhile, the commission put off Monday any action until January backing a Tourism Development Zone for the Mid-South Fairgrounds, citing a request for the delay by the administration of Memphis Mayor A C Wharton Jr.
City Housing and Community Development Director Robert Lipscomb said later that meetings are scheduled for this week on the impact of the amateur athletic facilities planned for the Fairgrounds on existing facilities elsewhere in Shelby County.
Some commissioners expressed concern among several issues.
Lipscomb said he would prefer to take a TDZ application for the Fairgrounds to the Tennessee Building Commission for passage with unanimous support from the commission if possible.
The specific resolution the commission is considering includes a guarantee that the city of Memphis will replace on an annual basis any sales tax revenue captured in the zone that would otherwise go for funding local schools.
As part of the contract, state officials would be the arbiter of how much and how such funds would be paid to county government.
Wharton’s administration contends a Fairgrounds TDZ would not capture the schools funding share of the local option sales tax. Commissioners and the administration of Shelby County Mayor Mark Luttrell disagree.
Shelby County government is the sole local funder of Shelby County Schools, which takes in schools in Memphis as well as unincorporated Shelby County.
The six suburban school districts also receive local funding from Shelby County government as well as their respective municipal governments.