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VOL. 133 | NO. 85 | Friday, April 27, 2018

Strickland Responds to Graceland Push for Arena Approval

By Bill Dries

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Graceland Holdings managing partner Joel Weinshanker meets and greets after a Thursday, April 26, town hall meeting in Whitehaven to build public support for Graceland's plan to build a 5,000 to 6,000 seat arena on its campus. (Daily News/Bill Dries)

UPDATE: Memphis Mayor Jim Strickland responded Friday, April 27, to comments made by Graceland Holdings managing partner Joel Weinshanker Thursday evening at a town hall meeting about Graceland's expansion plans. Here is the statement in full.

"At a meeting last night in Whitehaven, Elvis Presley Enterprises managing partner Joel Weinshanker made some misleading — and downright false — claims in regard to the economic development plans he’s made public.

Today, I want to correct the record.

Cut through it all, and this boils down to one thing: Mr. Weinshanker simply wants more public cash for his business.

We want him to build whatever entertainment complex he wants to build. We’re excited to see it happen, in fact. But he wants to build it with your money — cash that would have to come out of our operating budget. All told, that amounts to about $3 million.

Let me make a finer point on it: Mr. Weinshanker wants us to direct taxpayer money that would otherwise go to services like police and fire to his business. We would have to cut city operations to enable these cash payments to a business that keeps 100 percent of the profits.

I chose not to do that.

As for the manufacturing facility he proposes, I’ve told him for over a year that we want him to build it. We’d be thrilled to work with Elvis Presley Enterprises on a tax incentive to bring new jobs to our city — not unlike when we grant incentives for other projects to bring jobs. We stand ready to make it happen.

Also, please know that, contrary to what Mr. Weinshanker said last night, we have indeed met with him to discuss his plans. I’ve met or spoken on the phone with him about half a dozen times. Members of my staff have met with him or members of his staff more times than that.

But at the end of the day, please understand that Mr. Weinshanker’s words are all about his desire for public money, and my decision not to divert taxpayer money from services to his private business."

--

Graceland is on the offense in its bid to build a new arena – specifically the managing partner of Graceland Holdings LLC, Joel Weinshanker, who told a group of 150 people at a Whitehaven town hall meeting Thursday, April 26, that the city “won’t even speak to us.”

“We are unable to have a conversation with the city mayor,” Weinshanker told the crowd, referring to Mayor Jim Strickland. “It really comes down to as simple as that.”

From the stage of the theater at Guest House at Graceland, the $90-million resort hotel that was the first part of Graceland’s ongoing expansion, Weinshanker urged Whitehaven residents to make their voices heard on his new plans for a 5,000 to 6,000 seat arena and a convention center.

That starts, he said, with a Shelby County commission vote Monday on a resolution backing both projects on the condition that a court of law settles questions about whether the financing plan for the arena violates a noncompete the city and county governments have with the Memphis Grizzlies organization to operate FedExForum.

“It protects the city and it protects the county,” Weinshanker said. “We can build the arena only if the highest court in Tennessee … basically thinks it is not a conflict and it is not a conflict with the contract. The city should want to say let’s run and go to the judiciary. Let’s find out what happens. We all know what’s going to happen. But for some reason the city doesn’t want to do that.”

No city council vote is scheduled on such a resolution.

The city-county Economic Development Growth Engine – or EDGE – board gave tentative approval earlier this month of the convention center and arena with a move that allows Graceland to increase its draw on tax increment financing – or TIF – property tax revenue from 50 percent to 65 percent. With the increased draw applying to paying the financing on Guest House and the Elvis Presley’s Memphis entertainment complex – the two completed parts of Graceland expansion – Graceland would then use its own money to finance the arena.

The EDGE approval is conditioned on the arrangement being cleared legally.

The Strickland administration has said it doesn’t think the arrangement gets around the non-compete agreement. That agreement forbids the city and/or county from financing any indoor arena with at least 5,000 fixed seats. In return, the Grizzlies make up any losses the Forum might incur in its operations.

The Grizzlies have opposed Graceland’s arena plan and it is that opposition that has prompted Strickland to say Graceland can still build the arena – just not with city and county money.

Graceland sued the city and county as well as the Grizzlies in a Chancery Court lawsuit that was dismissed by Chancellor Jim Kyle who ruled Graceland was not a party to the noncompete. Graceland pursued its application to the EDGE board for the increased draw on the TIF and when EDGE first delayed a vote on it, Graceland then sued EDGE in Chancery Court in a still pending legal action.

Weinshanker says the convention center, which would be on the south side of the arena on the western boundary of the Graceland campus next to Elvis Presley’s Memphis, is a done deal that has already broken ground and will open next March.

The issue is the arena and Weinshanker said Thursday the financing plan approved by the EDGE board does not violate the noncompete for FedExForum. He also claims the city initially agreed to the arena plan.

“Only when Jason Wexler (business operations president) of the Grizzlies came and started complaining did the mayor and the city attorney do a 180,” Weinshanker said after the meeting. “But it wasn’t because they really thought there was an issue. They were just trying to win the favor of the Grizzlies.”

The crowd in the theater applauded when Weinshanker talked about concerts and other events going to Landers Center, a 10,000 seat arena in Southaven.

“If we uplift the area, if more people come, if more people have more money to spend and people don’t have to go to Mississippi. I can’t take another concert at Landers Center and not at FedExForum. I don’t know what to say,” he said as the crowd applauded. “If you look at how few concerts there are at FedExForum and how many concerts there are at Landers Center, you’ve really got to ask yourself what’s going on. Why is the G-League basketball team in Mississippi? Why are there 60 concerts a year at Landers Center? Why does Whitehaven High school have to have their high school graduation in Mississippi when we can bring it here?”

Strickland has said the city of Southaven subsidizes the expenses at Landers Center.

He also was more specific about other plans for the expansion that include a soundstage for film and television production in an 80,000 square foot building north of the arena site. An outlet mall with frontage on Elvis Presley Boulevard across from Guest House would sell apparel and other items made in Memphis in a manufacturing operation also on the Graceland campus.

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