VOL. 130 | NO. 23 | Wednesday, February 04, 2015
Skyline-Changing Tower Project Planned for Beale
By Bill Dries
The resurrected One Beale project at Riverside Drive and Beale Street has returned to a two-tower plan that will include 280 apartments, 40,000 square feet of retail and meeting space, 20,000 square feet of office space and a 300-room hotel.
The $150 million project will include a 30-story tower as well as an 800-space public parking garage. Developer Carlisle Corp. is scheduled to present the proposal to the Center City Revenue Finance Corp. on Tuesday, Feb. 10.
Carlisle Corp.'s revived One Beale project will transform the Downtown skyline with twin towers at the foot of Beale Street. Carlisle officials will present plans for the $150 million project to the Center City Revenue Finance Corp. Tuesday, Feb. 10.
(Hnedak Bobo Group)
“One Beale will be an iconic building for the city of Memphis, one that reflects where our city has been and where we are going,” Carlisle Corp. founder and chairman Gene Carlisle said in a prepared statement. “People and cities define themselves by their buildings, and One Beale will reshape the Memphis urban experience.”
Downtown Memphis Commission president Paul Morris said One Beale represents an historic opportunity to redefine the city’s skyline.
“When people around the world think of Memphis, two things that come to mind are Beale Street and the mighty Mississippi River,” Morris said. “The corner of Beale and the river is an opportunity for us to do something great that will help define our city for generations to come.”
Morris said that while the adaptive reuse of historic buildings such as the Lincoln-American Tower, Tennessee Brewery and Chisca is still a top priority, building for the future remains important.
“(To) show the world that Memphis is moving forward and not just reflecting on our past, we also need to build new features that will enhance our skyline,” Morris said. “This project is an opportunity to demonstrate to the world that Memphis is committed to its future, not just resting on its heritage.”
Carlisle is not seeking any action by the CCRFC on public financing; it is on the agenda as a “project introduction and discussion.”
The project first emerged with plans for twin towers just before The Great Recession began in 2007. As the recession deepened, financing became increasingly difficult and the ambitious plans were pared back to one tower. Then the project was put on hold entirely.
Since then, Carlisle became involved as the majority owner of the nearby Chisca Hotel redevelopment project. And the company sold several dozen Wendy’s restaurants it owned, providing it with nearly $60 million in capital.
In other news, Memphis City Council members have turned a resolution creating a Beale Street Tourism Development Authority into an ordinance requiring three readings.
The council approved the ordinance on first reading Tuesday, Feb. 3. But it’s not a simple transfer of the resolution to ordinance form and there are certain to be more amendments before a third and final reading, now set for the first council meeting in March.
Meanwhile, Morris said he is concerned about how long it will take to pass an ordinance and then negotiate a new agreement between the city and the authority – which is an extra step the ordinance would add to the process outlined in the 12-page resolution.
“Uncertainty and delay kill business,” said Morris. “And right now we’ve got both.”
The resolution was the proposal of Memphis Mayor A C Wharton Jr. The ordinance is the work of council attorney Allan Wade that the administration has agreed to.
Carlisle Corp.’s $150 million One Beale project includes 280 apartments, a 300-room hotel, 40,000 square feet of retail and hotel meeting space, prime office space and an 800-space public parking garage.
“The structure is such that you will enable the creation of an authority,” Wade told council members Tuesday before the first reading vote. “The seminal document, however, is a management agreement and long-term lease agreement between the city and the authority.
“That’s where you give them a long term lease to manage the property,” he said. “You convey the leases and give them the ability to collect the rents, lease and do all the things that (former Beale Street developer John) Elkington was doing.”
The original resolution would have left in place terms of the agreement with Elkington and his Performa Entertainment entity that managed and developed the district from its 1983 reopening to 2013, when the city took direct control in a legal settlement with Performa.
Morris’ problem is the time it will take to negotiate a new agreement once the nine-member authority is appointed by Wharton and approved by the council.
“How long is it going to take the city of Memphis and this authority to draft, negotiate and bring back to the council and negotiate with council a whole new agreement?” Morris asked.
“Theoretically it makes sense, but I’ve watched city council long enough to know that’s going to take a long time and it may not end up, especially in a campaign season, being a better product than we have now.”
Morris prefers using and amending along the way the same sublease Performa had with the Beale Street Development Corp. for the relationship between the authority and the city of Memphis.
In the transition, the nonprofit BSDC becomes a cultural organization with no leasehold interest. It is no longer what amounts to a middle man between the city, which owns the land and buildings on Beale Street, and a developer.
Wade argues the ordinance doesn’t amount to council or city oversight of every detail of the running of Beale Street, but instead requires “any major transaction, such as borrowing money, pledging assets, entering into transactions which are substantial, to require council approval.”
“Quite frankly government is terrible at it,” Wade said. “We don’t do it well. John Elkington is a prime example. He did a lot of things that he thought he should have done. But we weren’t watching him.
Several council members said Tuesday they want to avoid terms of the long-term lease Elkington and Performa had.
But Morris argues that looking at the agreement in hindsight misses the point that in the late 1970s the city had trouble finding a developer to take on the risk of a new Beale Street. Developer Gene Carlisle was the first developer. But he gave it up to pursue other business ventures Downtown. Overton Square’s original founders turned down the city’s offer as well.
“The fact is making the deal by putting a private sector developer in charge allowed the city to get something from nothing,” Morris said. “To say that the city made a bad deal – that’s assuming facts today that weren’t in existence 30 years ago. Thirty years ago the most sophisticated private parties in the city said this wasn’t a good deal for us.”
He agrees with Wade that the city didn’t use its rights in the lease to exercise oversight.
Wade said a new agreement would probably be modeled after the existing agreement.
Morris’s argument is after a year of his agency running the district day-to-day for the city, the district needs an entity to begin making long term decisions he can’t make now despite competition.
“We’re facing stiff competition from Overton Square, Cooper-Young, New Orleans, other cities,” he said. “None of these competitors have to deal with going to city council and doing all of these things. They know what the plan is. They know who’s in charge. Right now no one’s in charge of Beale Street long term.”