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VOL. 131 | NO. 12 | Monday, January 18, 2016

Four Beale Street Proposals Feature Different Backgrounds

By Bill Dries

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Jeff Sanford fielded inquiries from 17 or 18 companies, local and out of town, expressing some level of interest in the contract to manage the Beale Street entertainment district.

The Beale Street Tourism Development Authority is considering four management firms for  the job of running the four-block entertainment district on a day-to-day basis.

(Daily News File/Lance Murphey)

But at last month’s deadline to respond to a request for proposal from the Beale Street Tourism Development Authority, only four had applied.

Sanford, the consultant who accepted the proposals, presented them to the authority Thursday, Jan. 14. And those on the body said the small number of applicants confirmed their thoughts that managing the four-block area is a unique job.

The applicants were a Fortune 500 corporation; the Memphis-based company behind the Delta Fair; a Memphis real estate management firm with office experience; and a newly formed group of Memphians with experience in real estate, entertainment and restaurants as well as commercial development and financing.

Sanford noted that he is still vetting the proposals and companies.

Here’s a little more on each applicant:

Jones Lang LaSalle Americas Inc.

The Charlotte, N.C.-based Fortune 500 corporation covers a lot of ground in real estate management, including mixed-use entertainment projects.

JLL, as it is known, is best known in Tennessee as state government’s contractor on a controversial facilities management contract that included the sale of several state office buildings, including the Donnelley J. Hill Office Building in Memphis.

JLL’s entertainment and hospitality endeavors include the Epicentre development in Charlotte, Atlantic Station in Atlanta, Fanueil Hall in Boston and Navy Pier in Chicago.

Sanford said the authority should consider if the company is “the right fit for little old Beale Street.”

That includes whether JLL is “too corporate” for a district with a history – distant and recent – of being “nonconforming.”

“Or is it a moon shot?” he asked, referring to efforts to expand the district and broaden its entertainment offerings.

ML Professional Properties LLC

The ML in the company is Mark Lovell, the founder and owner of the annual Delta Fair and the Memphis Air Show. The company produces entertainment events and does marketing.

The Delta Fair, which includes a music festival, is one of 16 such events Lovell produces across the country under the Universal Fairs banner. That organization is described as a sister company of ML Professional Properties.

Lovell’s other company, Expo South, produces a dozen trade shows and similar events.

Those include the Shelby Farms Flea Market, the Memphis Boat Show, Memphis RV Expo and the Mid-South Gun and Knife Show.

Capital Realty Services LLC

The Memphis-based firm was formed in 2000 by a group of JLL’s Memphis executives.

Capital Realty's presentation touts its past, including leasing Clark Tower and leasing and managing the neighboring White Station Tower. One of the co-founders of Capital was leasing director of the Falls Building while working for JLL.

The company’s proposal emphasizes a systematic and formulaic approach to efficiency, according to Sanford.

21 Beale Street Inc.

21 Beale formed specifically for the Beale Street job in a coalition that includes Peyton Co. Realtors of Memphis, headed by veteran Memphis broker Reginald Peyton.

Peyton has teamed up with Dwain J. Kyles, a Chicago attorney and the owner and manager of nightclubs and restaurants there, as well as Kelvin Willis, a mortgage broker and developer with Willis and Associates of Memphis.

Willis is the cousin of former Beale Street Tourism Development Authority chairman Archie Willis, who resigned from the authority last month ahead of 21 Beale’s application.

The relationship is disclosed in the proposal.

Kyles is the son of Rev. Samuel Billy Kyles, retired pastor of Monumental Baptist Church and an icon in the Memphis civil rights movement.

The younger Kyles was co-owner of E2, a Chicago nightclub where a 2003 stampede killed 21 people after security guards used pepper spray in the club to break up a fight.

He was sentenced to two years in prison following his conviction on a criminal contempt charge for code violations at the club, including overcrowding. He was acquitted of involuntary manslaughter charges.

The sentence was thrown out on appeal, and this past November, Kyles and codefendant and club co-owner Calvin Hollins Jr. were resentenced to two years on probation and 500 hours of community service in a deal with Chicago city prosecutors.

The conviction is noted in the application, but the stampede isn’t.

The court order rejecting the earlier two-year prison sentence said the trial court judge based it on the deaths in the stampede. The appeals court ruling concluded the prison sentence was improper because Kyles and Hollins were not “the legal proximate cause” of the stampede and deaths and injuries.

The 21 Beale application notes the group held a “listening tour” in Memphis “to better understand the depth of land-standing cultural dissonance that keeps Beale Street from reaching its full potential.”

‘To take Beale Street to the next level, it needs more than a rent collector and maintenance provider,” reads the proposal’s cover letter by Peyton.

All four of the proposals include detailed and complex formulas for how the firms would be paid for running the day-to-day management of the district. Most of them involve percentages of revenue.

Authority members were already starting Thursday to calculate dollar amounts based on recent Beale Street financial statements.

But Sanford cautioned that any agreement on compensation will be negotiated, as the RFP pointed out in clear terms.

“You will have to negotiate,” he told the authority.

The authority tentatively set two weeks before its February meeting to interview executives of the companies.

That could be followed by a vote on selecting one of the four at the Feb. 18 meeting. But the vote could also be delayed depending on the questions members have in the next two weeks.

The authority could reopen the RFP process as well. It is not bound to consider only those who applied before the December deadline.

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