After multiple delays, lawsuits and revamped plans, the next phase of Elvis Presley Enterprises’ Graceland expansion have been approved by the Economic Development Growth Engine for Memphis and Shelby County.

But while EPE’s latest plans for 80,000 square feet of exhibition space on the Graceland campus were given the green light, the battle for its 6,000 -to 7,000-seat arena has just begun, even though it too received approval from EDGE.

At times, the normally light-hearted EDGE board meeting felt more like a high-stakes court battle, with multiple attorneys for both the city and EPE arguing their cases.

The EDGE board was concerned whether the exhibition space proposed in the Elvis Presley Enterprises’ Graceland expansion plan could be or would be used in a manner that might violate the city’s usage agreement with the Memphis Grizzlies that prohibits them from funding a project that could compete with the FedExForum. (Daily News/Patrick Lantrip)

“I have spent my career trying to find ways to get projects done in the development and redevelopment of the city,” EPE legal counsel James McLaren said. “This is one of the projects that I’m proudest of, and you should be too.”

McLaren cited the positive impact the Guest House at Graceland and Elvis Presley’s Memphis have had on the surrounding Whitehaven area for his feelings and why the EDGE board should continue to work with EPE on the Graceland expansion.

“But it takes a public-private partnership to do these deals; they can’t be done without incentives,” McLaren said.

The EDGE board was concerned whether the exhibition space could be or would be used in a manner that might violate the city’s usage agreement with the Memphis Grizzlies that prohibits them from funding a project that could compete with the FedExForum.

“Is it truly an exhibition space? What about concerts?” EDGE board chair Al Bright Jr. specifically asked EPE president Jack Soden. “Could you do a concert within the facility?”

Soden responded that, while arguably one could host a concert anywhere, it is not their intention.

“It would be difficult to do with the columns in place,” McLaren added. “… Part of the development agreement is that there will be permanent walls that will be moved, dividing each of the 20,000-square-foot (exhibit) facilities from the rest of the space. We tried to anticipate all of these issues when structuring this project.”

The exhibition space project received unanimous board approval, but EPE’s second project and request for more public funds were met with much more trepidation.

EPE is requesting to amend the Graceland Economic Impact Plan, pending judicial review, to include an increase in the Tax Increment Financing, or TIF, percentage from 50 to 65 percent, if EPE promises to build a 6,000- to 7,000-seat arena without using any of the additional money they would receive.

It is the opinion of EPE and its legal counsel that neither project, as proposed, violates a noncompete agreement the city has with the Memphis Grizzles to not provide public financing for projects that may compete with the FedExForum. That agreement forbids providing public funds for the construction of a performance venue of 5,000 seats or more.

City of Memphis COO Doug McGowen said the Guesthouse at Graceland and Elvis Presley’s Memphis have far outperformed expectations in Whitehaven and the city would like to see more development in the area, but it is their legal opinion the arena proposal violates the agreement.

“Therefore we are hesitant to throw our endorsement behind something that could put us at risk for violating the use agreement,” he said.

Even if the arena is privately funded, McGowen said the timing of the TIF increase only adds to the case that it is a violation.

“If there is culpability for violation of the use agreement, adding public money to a project at the same time as you’re approving an arena actually strengthens the case that public money is being used,” McGowen said.

McGowen also argued that the financial success of the existing Graceland plan negates the need for additional tax incentives from the city and county.

After hearing both interpretations of the use agreement from the opposing camps, Councilman Martavius Jones, who is a non-voting member of the EDGE board, weighed in on how the city council may vote.

“Whitehaven is in Super District 8, which I represent on the council, and I, like anybody, would love to see this, but I’m just having a problem seeing how we can get out from under the provisions that we’ve talked about,” Jones said. “Without the judicial review, I just think it’s going to be hard for the council to approve this as it is.”

Ultimately though, the EDGE board voted to advance the project pending approvals from the City Council, Shelby County Commission and a judicial review.

The 5-3 vote was a rare split among board members, with Bright essentially casting the deciding vote, as only eight members were in attendance.

Bright said later his sole reason for voting yes was so that the City Council and County Commissions would have the opportunity to review EPE’s case.

After the meeting, EPE principal Joel Weinshanker told The Daily News he feels confident the arena project will be advanced through both the remaining governing bodies and the judicial review.

“From the get-go, we wanted to alleviate any potential liability from the city,” Weinshanker said. “From the start we’ve wanted a judge to basically step up and say, ‘this violates or it doesn’t violate.’ If it doesn’t violate, then the city has no liability.”

Weinshanker also doesn’t believe it will be long, drawn out process.

“Nothing I ever do is a long haul,” he said. “You’re going to see movement very quickly.”

Asked if the affirmative vote resolves EPE’s pending lawsuit in Chancery Court with EDGE, he said no.

“EDGE made a ruling that the judge has to make a determination, so at the end of the day we’re just getting started,” Weinshanker said. “With EDGE, it’s a question of whether or not they even had the ability to change the structure of the agreement. There’s even a question with what they’ve passed today whether they’re allowed to, within their structure, do that.”

Also after the meeting, city attorney Bruce McMullen expressed his displeasure with the outcome.

“I was disappointed in what happened today because I wanted to see the Grizzlies work it out with EPE so that it’s not tied up in court and they could get to work on this as expeditiously as possible,” McMullen said.

“But some interesting questions were asked and some interesting things came out of this.”

As far as the TIF is concerned, McMullen said he has not seen a pro forma or anything from EPE “on what they were going to use the money for and why they needed it.”

McGowen said he will make the same case to the City Council, if necessary.

“While the prospect of a 6000+ seat arena is certainly exciting, we believe it puts the city at risk of violating the use agreement with Hoops Inc., something that we do not desire and therefore cannot support as presented,” McGowen told The Daily News.

He also questions whether additional incentives are even necessary.

“What was once an unbankable project is now performing so well that additional phases can be built using the existing public revenue streams, and as EPE asserts, the arena can be constructed with private resources and commercial financing without directly applied public incentive,” he said.