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VOL. 130 | NO. 109 | Friday, June 5, 2015

Beale Authority Wants to Talk Fee Simple Ownership Of District

By Bill Dries

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The newly appointed Beale Street Tourism Development Authority wants to talk to Memphis City Council members about a fee simple arrangement for how it would govern the entertainment district for the city.

The arrangement would be similar to how the Memphis-Shelby County Airport Authority runs Memphis International Airport and how the Public Building Authority that built FedExForum operates.

The Beale authority’s members voted unanimously Thursday, June 4, at their second meeting to seek the talks with the council.

The ordinance authored by the council’s attorney and approved by the council earlier this year set up a master lease agreement similar to the deal between the city and the nonprofit Beale Street Development Authority.

It was a different version than the resolution originally proposed by Memphis Mayor A C Wharton Jr.

In its predecessor, the early 1980s original agreement which governed the renovation and reopening of the district in 1983, the city leased its property, which is everything in the district except Handy Park and A. Schwab, to the BSDC which then in turn hired Performa Entertainment to run and develop the district.

A fee simple arrangement would mean the city still retains ownership of the property. But the authority, whose members are nominated by the mayor and confirmed by the council, has more autonomy to make the kind of long term commitments necessary to secure financing for the expansion or improvement of the district.

The authority’s first significant piece of business is hiring a management firm to carry out the long term vision the authority sets and finances. It is a different role than the lease with BSDC and Performa involved.

Performa was more than a day-to-day manager. It was integrally involved in the district’s vision and direction over a 30-year period. Its long-term contract with BSDC wasn’t a direct contract with the city. But BSDC ceased functioning in any meaningful way as the district became more successful.

Before a management firm can be hired, the authority and City Hall have to reach an agreement on the specific terms of what the authority does for the city of Memphis and the direct relationship.

“We should start with what we think is in the best interest of the street and of the city,” authority chairman Archie Willis said.

Authority member Paul Morris, who continues to run the street on a day-to-day basis for the city pending an agreement on terms between the city and the authority, said council members may have concerns about granting that kind of control.

But Morris also agreed that private financing for improvements will be harder to secure without the kind of security a stronger authority would offer.

He also pointed out that some council members and other citizens consulted in a report on the district commissioned by Mayor A C Wharton several years ago were concerned about the length of the city’s early 1980s agreement with Performa. But that was not the entity that had the direct contractual relationship with the city – the BSDC.

Other authority members said they could work with the way the ordinance is currently worded as well. But they said they want to discuss the fee simple arrangement with the council to see if it is a possibility. They also conceded the discussion involves some political considerations about control of the district.

“Nothing is simple,” cautioned Jeff Sanford, a consultant to the authority, former city council member and author of the Beale Street study.

The authority continues its review of leases with tenants in the district that have no uniform model. And authority members got a briefing on the day-to-day management of the street from Jon Shivers of Beale Street Management.

“From an outsider looking in, Beale Street is unlike any other entertainment district in the nation,” he told the group which met in the oyster bar at Silky O’Sullivan’s. “The learning curve is steep and nobody can come in and just do this job on a whim.”

Sanford has been talking privately with potential managers for the district on an individual and informal basis and he said all of his discussions have involved him talking to the management firms, not them contacting him.

Shivers and Sanford said the inability of current management on the street to sign or make any long-term agreements is a factor in the hesitancy.

Since January 2014 the district has been under direct city control with Morris running it through the Downtown Memphis Commission, which he is president of.

Morris too has said the street needs long term plans that the authority would have the power to make once it reaches terms with City Hall.

PROPERTY SALES 62 288 2,619
MORTGAGES 52 197 1,783