VOL. 131 | NO. 166 | Friday, August 19, 2016
City, Wiseacre Set to Discuss Brewery’s Proposal for Coliseum
By Bill Dries
The first order of business is to figure out what the city and the owners of Wiseacre Brewing Co. are negotiating about when it comes to Wiseacre’s proposal to convert the Mid-South Coliseum into a brewery.
The staff of Wiseacre Brewing Co. in the cooler of the brewery’s Broad Avenue facility and tap room. Wiseacre and city leaders are exploring a $12 million expansion of the brewery into the Mid-South Coliseum.
(Daily News/Andrew J. Breig)
And the first serious talks about that were to begin at week’s end with a meeting between the owners and Memphis Mayor Jim Strickland’s administration.
“We haven’t agreed to anything and we don’t know exactly what the terms will look like until we have that negotiation,” city chief operating officer Doug McGowen said Wednesday in advance of the first meeting since Wiseacre went public with its idea at an Aug. 9 Memphis City Council committee session.
“We are working with them to determine what would the terms of any potential lease look like for us to consider,” McGowen added. “We don’t have any particular terms to know exactly what the responsibility of each party would be.”
The 3-year-old brewery and tap room on Broad Avenue has reached capacity at that location and plans to make a $12 million investment in an expansion, with construction to start in early 2017 even if the Coliseum is not the site.
McGowen said the city’s goal is mindful of that timeframe.
“Once we have those terms related to us, we’ll evaluate and bring it to the mayor,” he said. “If the mayor’s amenable, we’ll bring it to the council.”
The concept to use the Coliseum for the expansion from 13,000 square feet on Broad to 65,000 square feet is to move an expanded brewing apparatus into the center of the Coliseum space where a 65-foot vertical clearance is needed. That would mean taking out the seating bowl in place since the arena opened in the mid-1960s.
The back office and other functions of the company would be housed in the concourse areas of the current structure, Wiseacre co-founder Frank Smith told council members.
A promenade with glass walls would look down into the center of the Coliseum and could provide space for restaurants, bowling alleys and other entertainment features.
Smith said at this point the concept is a “crazy radical idea” that may not be feasible or may not be something the city believes is in its best interest.
“It seems to me the first challenge we have is to see whether or not there’s a business deal that can be struck,” Smith told the council. “We’re not sure of that.”
Meanwhile, the administration has a second proposal from DSG Commercial, a local real estate and financial services company.
Brian Saulsberry of DSG is proposing to keep the Coliseum as a venue for concerts and sporting events and says he can round up as much as $120 million in capital for a project that would include a hotel.
The city has experience with the adaptive reuse of an arena – The Pyramid.
But the decade-long quest – first by former Memphis Mayor Willie Herenton’s administration and then by former Mayor A C Wharton’s administration – that resulted in Bass Pro Shops opening a store and other attractions in what had been a 20,000-seat arena isn’t considered a blueprint for the Coliseum.
“We dealt with The Pyramid for what – six, seven, eight years?” said council member Reid Hedgepeth during the Wiseacre presentation to the council. “And that was a building that didn’t have near the issues the Coliseum has. When you get an arena like that on the open market and try to get rid of it, we found that it can be very difficult at times – especially to get it back on the tax rolls.”
In the case of The Pyramid, Bass Pro Shops didn’t approach the city; rather, Memphis leaders sought out the outdoors retailer.
Herenton’s opening condition was that the city should not spend or otherwise pledge its general revenue funds to make the project happen.
Strickland’s instructions to McGowen and the administration team at the outset of the Coliseum discussion is more specific.
“The mayor has said he’s open to any use that doesn’t use city money and doesn’t keep us on the hook for any maintenance,” McGowen said.
Under terms of the Pyramid deal, the city undertook the change that got The Pyramid ready for Bass Pro Shops to then begin assembling its store, hotel and other attractions within The Pyramid.
It is what is referred to as a “warm lit shell” lease provision. The city agreed to do whatever was necessary to provide a warm lit shell in which Bass Pro Shops would then go to work on its specific investment to create its business there.
That meant the city took out the seating bowl at a cost of about $63 million and the city bore the considerable expense – $25 million – of seismic preparations on and around The Pyramid to make the structure more earthquake resistant.
The bonds to do that as well as to buy out county government’s ownership interest in the nearby Memphis Cook Convention Center are financed by sales tax revenue from the Downtown Tourism Development Zone. That means the funding did not come out of the city’s general fund, per Herenton’s edict.
The city is still on the hook for maintenance of The Pyramid.
McGowen said The Pyramid’s readaptation is an example to be considered, but there is a difference.
“The difference here is that we’re entering into this with the idea that people come to us with a proposal for wholesale use, renovation and maintenance of the facility,” McGowen said. “There would be no ongoing maintenance obligation with the initial entering of the discussion.”