VOL. 133 | NO. 95 | Friday, May 11, 2018
Not Taking Sides
By Bill Dries
Elvis Presley Enterprises’ push to get city and county officials to back its plans for a Whitehaven arena hasn’t made very much progress, judging from discussions this month by the Memphis City Council and the Shelby County Commission.
After completing the Guest House at Graceland resort, pictured, and Elvis Presley’s Memphis in recent years, Elvis Presley Enterprises wants local leaders to back plans for an arena. (Daily News File/Andrew J. Breig)
Graceland is trying to convince both bodies to approve resolutions that back an increase in tax increment funding, or TIF, from a 50 percent draw on city and county property tax increment to 65 percent, and then wait on a court ruling on whether the additional financing runs afoul of the city and county noncompete agreement with the Memphis Grizzlies.
But neither body has scheduled a vote on such a move despite approval of the arrangement last month by the Economic Development Growth Engine board.
Graceland attorney James McLaren found some support this week when he talked with county commissioners.
“I’m going to support you,” said commissioner Terry Roland. “I hope you win the court case, not only because of who you are and what you do for the community, but I think the best outcome for the people in the county’s view is hanging on this decision.”
McLaren and Graceland CEO Jack Soden encountered more questions about Graceland’s plans for the arena and a manufacturing facility that would make Chia Pets and The Clapper, among other items, at a plant and distribution facility somewhere in Whitehaven off the Graceland campus. Commissioners wanted to know what workers would be paid – not supervisors and executives but rank-and-file employees.
Others questioned the conflict between Graceland and the Grizzlies organization, which operates FedExForum for the city and county governments. In return for absorbing any operating losses at the forum, the Grizzlies have a noncompete clause that forbids city and county government funding for any fixed-seat indoor arena with more than 5,000 seats.
The Grizzlies have been adamant that the Whitehaven arena proposed by Graceland violates the noncompete agreement.
McLaren said the Grizzlies’ opposition to the arena has grown to include anything on the Graceland campus.
“The Grizzlies have told us that even with less than 5,000 seats this arena would compete with FedExForum,” he said.
Graceland is proposing to use the increase in TIF funding generated on the Graceland campus to pay off the debt from its Guest House at Graceland resort-hotel and its Elvis Presley’s Memphis entertainment complex. EPE would then shift the money it is paying on the debt from those two projects to finance the arena itself.
Memphis Mayor Jim Strickland has said that’s a shift on paper only and agrees with the Grizzlies that such a shift still violates the FedExForum noncompete clause.
Commissioner Reginald Milton says he doesn’t want the county to get between the city and Graceland.
“You are a valuable resource and a great tourist destination,” he told McLaren and Soden Wednesday, May 9. “My attitude has always been … that when there is the infighting or disagreements involving the municipalities, that as commissioners we should in some way be hands off. I think that’s something we have to be very cautious about.”
A day earlier, McLaren, Soden and the Graceland team were at City Hall for council committee sessions. And city chief operating officer Doug McGowen was among those urging Graceland to be more specific.
“‘Similar to’ is not ‘the same as,’ and I heard a different proposal at the county commission than what I heard today,” McGowen said. “So I’m not sure exactly what it is you are being asked to approve. We need the same as.”
He also said Graceland should pursue specific incentives before asking for approval from both local governments.
“My very simple suggestion is this: If an incentive is required for those projects, an incentive should be asked for for those projects. That is not what is occurring today,” he said. “What is occurring today is a request for an increase from 50 to 65 percent for developments that are yet unnamed and a 6,200-seat arena that violates potentially the use agreement with the Grizzlies.”
Councilwoman Patrice Robinson, whose district includes Whitehaven, said Graceland is “putting the cart before the horse.”
Other council members cited the possible movement of sports franchises in several sports.
“In no way would I ever take any action that would jeopardize our use agreement with the Grizzlies and prompting them to move to a city such as Seattle or Las Vegas,” said councilman Worth Morgan. “That is a line we will never cross. It’s a line we never want to come close to crossing.”
Council chairman Berlin Boyd was among those on the council hesitant to weigh in on the difference between the administration and Graceland.
“I don’t want this body to be looked at as a pawn,” he said. “I don’t want taxpayers at risk. I can’t support this now.”