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VOL. 131 | NO. 57 | Monday, March 21, 2016

Beale Authority Encounters Familiar Headwinds

By Bill Dries

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Somewhere near the beginning of the Thursday, March 17, meeting of the Beale Street Tourism Development Authority, Caren Nichol talked about how unique the entertainment district is because of its cultural and historical importance.

“It has the longest, deepest and most tumultuous history,” said Nichol, a member of the authority that is a year old in May.

The Beale Street Tourism Development Authority has decided to reopen the process for finding a manager for the entertainment district, putting off the selection of a firm possibly until September.

(Daily News File/Lance Murphey)

The sentiment included the last 30 years of the district’s revival and a desire by Nichol to avoid adding new tumultuous chapters to the story.

But a few minutes later, the group got its first really good helping since its May 2015 start of the controversy that comes with running Beale Street.

The authority has decided to reopen the process for finding a manager for the entertainment district, putting off the selection of a firm possibly until September.

In seeking new proposals until the end of June, the authority voted to keep proposals it has been reviewing from four companies for several months and allow those companies to amend their proposals if they wish.

But the leader of one of the four companies – the only black-owned entity of the four – told the authority at its Thursday, March 17, that it is unfair to reopen the process.

Dwain Kyles of the 21 Beale Street Inc. group said the company’s proposal was “head and shoulders” above the other three proposals.

The other three companies that applied are: Capital Realty Services LLC of Memphis, ML Professional Properties of Memphis and Jones, Lang, LaSalle Americas Inc., a national company with offices in Memphis and Nashville. JLL’s Charlotte, N.C. office is the contact point for the company’s Beale Street proposal.

“I am in disbelief that our proposal was found substantially lacking in any area,” Kyles said. “I am extraordinarily and vehemently opposed to reopening this bid. You’re not going to get a whole lot of new people unless you go out and put them together.”

Kyles’ partners in the venture and other supporters were also at the meeting to object to adding what amounts to a second round of the selection process, and to question the process.

Jeff Sanford, a consultant to the authority, said the process was reopened because after a review of all four proposals and individual interviews with the four companies there was a “reluctance” by the authority’s search committee to select one of the four.

The authority said from the outset that it was not obligated to just consider whoever applied by the original Dec. 18 deadline. And authority members said several times they might ultimately reopen the process.

The original goal was to have a management firm in place for this summer.

Authority chairman Jason Wexler described the intent as: “Let’s move fast and get this done and transition as quickly as possible because that’s probably what’s in the best interest.”

But there were second thoughts about that as the proposals were analyzed.

“I think in our desire to make a speedy transition that we may have not recognized that we were really trying to make the best possible transition,” Wexler said. “Our obligation as a board is first and foremost to make Beale Street as successful as possible for the city of Memphis.

“We do have some level of obligation to the four applicants who did take the time to submit properly and submit valid applications per the initial RFP (request for proposal),” he added. “Ultimately, we’ve got to be first and foremost responsible to Beale Street.”

The hesitation is what the authority can afford to pay given the manager will be paid from revenues made in the district.

“There are financial problems with some of the bids,” Nichol said. “We can’t fund what some of the groups have asked us to do because we don’t have the money.”

“You’re not going to get better people,” Kyles told the authority. “If you do get somebody, the price that you’re going to pay is certainly going to be a whole lot more.”

Interim Beale Street manager Paul Morris said he “saw some gaps” in the proposals and had “real serious questions about each.”

Those questions could be resolved by some or all of the applicants, he was quick to add.

And the authority authorized Sanford to talk with each of the four companies separately about specific problems in their proposals.

Kyles, a Memphis native who has managed real estate and run nightclubs in Chicago, wasn’t placated by the end of the meeting. He talked at length with Downtown Memphis Commission president Terence Patterson afterward, with Patterson saying on several points, “We’ll have to agree to disagree.”

Kyles didn’t say he and his partners were withdrawing from the process either.

But he noted that the authority didn’t get a whole lot of takers to manage a district that is a unique challenge in its blend of property maintenance, rent collections, marketing and promotion.

It was a concern Sanford had early in the process as he talked informally with firms that inquired. Ultimately, more inquired than the four who applied.

Kyles said it’s because the job is more than a management job.

21 Beale Beale Inc. did more than talk to the club and business owners renting in the city-owned district. The group’s proposal went to the heart of the district’s struggle for authenticity that began in the mid- to late 1970s with the formation of the Beale Street Development Corp. – originally intended to be a guardian of the street’s history and culture.

In a city that was then governed by a white mayor and a majority white city council, the BSDC was the way to racial inclusion and diversity. The BSDC’s original director, George Miller, was also interested in who controlled what on the street and its direction.

To Miller, the role of guardian and having some power over the business of the district were inseparable and Miller tended to regard his own business and the district’s business as one in the same.

But it wasn’t Miller’s example that Kyles cited March 17 as he made the case for the group he has assembled.

“John Elkington realized his dilemma. He had no experience,” Kyles said, invoking the district’s manager/developer from its early 1980s opening through 2013. “It wasn’t a typical property management company. … He created an entity that addressed specifically the needs of Beale Street. It wasn’t a typical property management company. It was a hybrid.”

More than 30 years later, 21 Beale’s proposal cited “the longstanding cultural dissonance that keeps Beale Street from reaching its full potential.”

“We put this together because we care about the street,” Kyles said. “And particularly to engage African-Americans who feel pretty much disconnected from the street even though the legacy is grounded in black entrepreneurial and professional development. That’s the basis for Beale Street. I’m pretty sure without seeing the other proposals that we were the only one that had any diversity in terms of the principals.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 40 220 16,417
MORTGAGES 28 85 10,172
FORECLOSURE NOTICES 0 13 1,438
BUILDING PERMITS 161 826 39,370
BANKRUPTCIES 29 136 7,733
BUSINESS LICENSES 10 48 2,841
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0