VOL. 133 | NO. 112 | Tuesday, June 5, 2018
Commission Approves Graceland Resolution in Forum Non-Compete Controversy
By Bill Dries
The Shelby County commission dipped its toes in the roiling waters of the Graceland-Grizzlies arena flap with a vote Monday, June 4, to conditionally endorse the idea of a 6,200-seat Whitehaven arena built by Elvis Presley Enterprises on the Graceland campus.
The condition is that a Chancery Court Judge rules the arena does not violate the noncompete clause city and county governments have with the part of the Memphis Grizzlies organization that runs FedExForum for the two governments or that the Grizzlies and Graceland come to some kind of understanding short of a court declaration.
Commissioner Terry Roland called the arena controversy “one of the most important issues when it comes to economic development in Shelby County right now.”
“Last year, Landers Center has 21 concerts that probably would have come to Memphis had it not been for the noncomplete clause,” he said, referring to the 10,000 seat arena in Southaven.
The clause prevents city and county government funding or incentives for the construction of any indoor arena of 5,000 or more fixed seats. In return for that, the Grizzlies absorb any operating losses at FedExForum.
“They are having a hard enough time making FedExForum viable long range,” commissioner Walter Bailey said of the Grizzlies. “They don’t need other entities being granted favoritism by local government, which is what this would amount to.”
Bailey was the only no vote on the resolution. Commissioner Van Turner recused himself from the vote because of his law firm’s work connected to one of the parties. Commissioners Reginald Milton, Mark Billingsley and Melvin Burgess abstained.
Commissioner Steve Basar was willing to vote for the resolution but also said there should be some caution beyond the vote.
“I understand some passion about the Grizzlies and the noncompete,” he said. “And I agree that’s a hindrance to the community but overall if you look at what the Grizzlies have brought – they’ve brought a lot.”
Graceland plans to seek the Chancery Court declaration one way or the other. If it is in Graceland’s favor, the resolution could be a step toward expanding the tax increment financing – or TIF – district revenue that currently funds the debt on Guest House at Graceland and the Elvis Presley’s Memphis entertainment complex.
Graceland now gets 50 percent of the property tax increment or increase that comes from the development on Graceland’s campus to go toward the debt. Elvis Presley Enterprises is seeking to up that to 65 percent. The increase would go toward the debt on the same two parts of the campus expansion that have already been built and are open.
Graceland would then withdraw the money it pays toward the debt on those two projects and apply it to the estimated $60 million cost of a 6,200 seat arena.
Memphis Mayor Jim Strickland has said that’s a move on paper only that would still violate the noncompete.
Graceland’s attorney, James McLaren, takes the city’s and the Grizzlies’ continued opposition to the deal as them taking the position that any private development anywhere toward an arena would violate the noncompete.
The city council has discussed but not taken any vote to date on the same resolution. The Economic Development Growth Engine – or EDGE – board has approved a similar resolution.
In other action Monday, the commission voted 8-0 in favor of a county property tax rate of $4.05 for the fiscal year that begins July 1. Commissioners Turner, Burgess and Willie Brooks abstained on the first reading vote which automatically advances the measure to second and third readings regardless of the vote count under the commission’s rules.
County Mayor Mark Luttrell has proposed dropping the current $4.11 rate to $4.05 estimating it should eliminate the $20-million windfall the county got from the recertified property tax rate based on the 2017 countywide reappraisal of property with a one-cent reduction beyond that.
Commissioners also approved county funding of $518,160 from the county’s reserves in the current fiscal year as what commission chairwoman Heidi Shafer described as “seed money” toward an opioid addiction treatment plan. The plan with the Shelby County Health Department and the University of Tennessee Center for Health Science includes a contract with UTHSC not to exceed $2 million for a year to establish an Addiction Medicine Network.
The county startup funding would start immediately and automatically flow into the new fiscal year next month to begin hiring counselors and others for the program to provide wrap around services for those addicted to opioids.
“We are tracking so a year or two down the line we can look at the cost of addiction and what we invested and return on investment on that,” said Dr. Alisa Haushalter, health department director. “If this works with opioids how do we apply the model to other addictions? It’s really testing the model – a more integrated model. We anticipate being eligible for federal grants.”
Dr. David Stern of the UTHSC pilot program said the treatment program would include those now at the county corrections center and some of those addicted who have private health insurance that doesn’t cover such treatment could also be included under different funding than that approved Monday by the commission.