VOL. 133 | NO. 92 | Tuesday, May 8, 2018
Strickland: City Given Enough For Entertainment
By Bill Dries
Memphis Mayor Jim Strickland says he would support some kind of incentives for the manufacturing facility Graceland wants to open in Whitehaven. But not if it’s linked to a greater share of city and county property tax revenue for a 6,200-seat arena Graceland also wants to build.
“We’re all for that manufacturing facility. We’ve told them for over a year – file an application,” Strickland said on the WKNO/Channel 10 program “Behind The Headlines.”
“They ought to get tax incentives for that. That’s the big job creator they talked about,” he said. “Absolutely they should get a PILOT (payment in lieu of taxes) for that. But I think we ought to stop at giving additional incentives for any more entertainment facilities across the street from Graceland.”
That includes the 6,200-seat arena Graceland Holdings managing partner Joel Weinshanker is seeking to build on the Graceland campus.
The manufacturing facility would also be in Whitehaven, but not on the 120-acre Graceland campus. Weinshanker recently bought the company that makes The Clapper and Chia Pets and said last month those would be among the products made at the manufacturing facility that would employ more than 1,000 people.
But he has linked that to plans for an arena and a convention center just west of Elvis Presley’s Memphis entertainment complex. Weinshanker’s proposal is to increase Graceland’s take of the city and county property tax increment from an existing tax increment financing – or TIF – district that is the Graceland campus from 50 percent to 65 percent. That increased draw would go toward paying the debt from Guest House at Graceland and Elvis Presley’s Memphis – the two completed parts of the campus expansion. The money Graceland is putting toward the debt on those two projects would then be shifted to financing the convention center and arena.
Strickland disagrees with that.
“That other 50 percent goes to us – city and county. It is literally money in our budget that pays libraries, police officers, firefighters,” he said. “To give them part of our 50 percent would come literally out of our budget into their pocket. This is money to a private person or business for a private enterprise and they get to keep 100 percent of the profits.”
The EDGE – Economic Development Growth Engine – board has approved the convention center and arena funding contingent on a future court ruling that holds the financing of the arena would not violate the noncompete clause city and county governments have with the Memphis Grizzlies to run FedExForum.
The clause says the city and county cannot finance any indoor arena with more than 5,000 fixed seats. In return the Grizzlies run the forum and absorb any losses in the operation of the arena.
Weinshanker says with the TIF financing going to Guest House and Elvis Presley’s Memphis, the noncompete is not violated and does not come into play.
“I think it’s the same thing. That’s just a financial arrangement on paper,” Strickland said. “It still would be incentivizing more Graceland entertainment facilities and violate the lease. It’s the same thing.”
Weinshanker says Graceland has already broken ground for the convention center and that it is scheduled to open in March 2019.
Weinshanker is now trying to mobilize public support, particularly in Whitehaven, to counter Strickland’s opposition and that of the Grizzlies organization. He’s called on the Shelby County Commission to approve a resolution backing the arena, conditional on a favorable court ruling on the matter.
The commission briefly discussed such a resolution last week but no motion was ever made nor vote taken. More discussion is planned by the commission.
Memphis City Council members are scheduled to discuss the Graceland expansion plans Tuesday at a 10:30 a.m. committee session at City Hall.
While Weinshanker said last month that Strickland is refusing to talk to him, Strickland said they were emailing each other last week. And he said the city was trying to work out a compromise between Graceland and the Grizzlies when Graceland filed the first of two lawsuits in Chancery Court over the noncompete clause.
“I’m not all shook up. There’s only one point of disagreement. … and that’s whether any incentive – taxpayer money – should be used for the arena,” he said. “Hopefully we’ll continue to have talks. I actually like Joel Weinshanker. I think he’s done a good job down there and I want to support him as much as we can.”
“Behind The Headlines,” hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.
On other subjects, Strickland says Greater Memphis Chamber board chairman Richard Smith has withdrawn a tentative proposal that would eliminate a minority business percentage and requirement from some but not all tax incentives granted by the EDGE board.
“We need to do some things differently,” Strickland said. “Let’s lay it all out on the table and figure out the best way to sell Memphis.”
Strickland said one of the areas the city is weakest at is drawing major corporate headquarters from out of town. And he says minority business percentages have been among the barriers site consultants have said is a factor.
Smith’s rough draft would have extended the term of PILOTs for companies that met minority business percentages. The idea continues to evolve with city and county leaders in ongoing discussions about a larger change in economic development policies and incentives.
Strickland said he’s not sure if extending PILOTs, which run an average length of eight years, would complicate the city’s plan to fund its share of a prekindergarten expansion with new city property tax revenues once the original PILOTS or tax abatements run out.
“That needs to be looked at,” he said.
Strickland also said the city is moving slowly with de-annexation ordinances going to the City Council because it wants to make sure a state law on de-annexation is not passed.
“If we de-annex all of these areas right now, there’s no incentive for the Legislature not to pass the ‘1998 bill,’” he said. “We want to work out a deal that if we agree to de-annex these areas, they’ll get us out from the 1998 bill.”
The 1998 bill, as Strickland termed it, that is on hold would allow citizens to petition for a de-annexation referendum for areas that became part of the city going back to 1998.
Strickland also said the defeat by referendum of tax hikes in Nashville to fund mass transit this month indicates improving the Memphis bus system probably won’t come to a referendum on tax hikes.
“They have gridlock. We have a very poor public transportation system,” Strickland said of the difference between the two cities. “We were very interested to see what happened in Nashville. … My gut says that Nashville would generally be more willing to tax themselves than Memphians would. But it failed in Nashville.”