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VOL. 133 | NO. 86 | Monday, April 30, 2018

Graceland Political Push Faces First Test at County Commission

By Bill Dries

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In introducing Joel Weinshanker Thursday, April 27, at a town hall meeting in Whitehaven, Graceland CEO Jack Soden talked about Weinshanker’s “appetite for risk.” The group of 150 people in the theater at Guest House at Graceland soon got a good look at Weinshanker’s emerging plan to go public in a big way with one of the city’s most sensitive economic development issues – the city and county noncompete agreement with the Memphis Grizzlies that keeps the city and county from funding any 5,000-seat and up arena that might compete with FedExForum.

He began at the town hall meeting by telling the crowd that the city – specifically Memphis Mayor Jim Strickland – “won’t even speak to us.”

“We are unable to have a conversation with the city mayor,” Weinshanker told the crowd at another point. “It really comes down to as simple as that.”

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)

“You want the mayor’s cell phone number?” he said at another point. “I think I have that.”

The effort to mobilize public support on city and county elected leaders meets its first test Monday, April 30, when the Shelby County Commission is to vote on a resolution that would be key to Graceland’s plan for the 5,000- to 6,000-seat, $50 million arena in Whitehaven on its campus.

The resolution would back the arena and a convention center on the condition that a court of law settles questions about whether the financing plan for the arena violates a noncompete that city and county governments have with the Memphis Grizzlies organization to operate FedExForum.

“It protects the city and it protects the county,” Weinshanker said after the town hall meeting. “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.

And Strickland said in a response Friday that Weinshanker made “some misleading – and downright false – claims.”

“Cut through it all, and this boils down to one thing: Mr. Weinshanker simply wants more public cash for his business,” Strickland added in a written statement. “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.”

Strickland also said he has met with Weinshanker about the expansion plans and spoken to him on the phone “about a half dozen times.” He also said there have been meetings between Weinshanker and his staff and the mayor’s staff.

“They are trying to impede us,” Weinshanker said Thursday of the city administration. “There aren’t very many people who want to spend hundreds of millions of dollars developing in Whitehaven. You’d think the city would come and say, ‘How can we help you?’ … They think we are going to go away if they make us wait too long.”

Weinshanker told the crowd that he’s fought to build the hotel-resort and entertainment complex in Whitehaven against forces that wanted the projects Downtown. And he said the two projects have “proven the bankers wrong.”

He also said he is committed to expansion on a long-term basis.

Former Memphis City Council member TaJuan Stout Mitchell was among those ready to push for approval of the project as Weinshanker touted the numbers of Whitehaven residents employed in the expansion, minority business percentages in the construction of both and their operation, and complained about ongoing delays in streetscape improvements already funded.

“You have stayed when others have gone,” Mitchell said. “Not only have you stayed, you have grown and invested. I’ve heard about Downtown, Crosstown, Cooper-Young town, Uptown. It’s time for Whitehaven.”

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 to pay 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.

Weinshanker says he’s already broken ground for the convention center and it is scheduled to open next March.

EDGE’s approval of the increased TIF funding is conditional on the arena 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 FedExForum 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, but 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. 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, Mississippi, just across the state line.

“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,” he said as the crowd applauded. “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.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
FORECLOSURE NOTICES 8 52 151
BUILDING PERMITS 158 699 2,751
BANKRUPTCIES 37 157 618
BUSINESS LICENSES 12 77 276
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0