Our next item for auction, bidders, is a little slice
of Memphis with a great location, nice cash flow, and lots of history. Who wants
a piece of Beale Street?
Far-fetched? Maybe not. John Elkington,
co-developer and manager of Beale Street for more than 20 years, says it’s time
for the city of Memphis to sell it.
“I believe that Beale Street’s value is
now at the highest level it will be for some time,” Elkington wrote recently in
a letter to Mayor Willie Herenton. “We just completed the appraisal on the
Westin Hotel garage which was $13.9 million. The appraisal was performed by one
of the most conservative appraisers in Memphis, Walter Allen. Many of the
assumptions that he used, with respect to land value, would apply to the
buildings and land on Beale Street.”
Elkington, chief executive officer of
Performa — a real estate management company which is itself a Beale Street
tenant — suggests that the city sell off individual buildings as opposed to
selling the development as a whole. He would exclude Handy Park, the outdoor
park and amphitheater featuring the statue of bluesman W.C. Handy. But he would
include part of Church Park, east of FedExForum, and convert it to multi-family
residential.
“We have businesses like Alfred’s and
Rum Boogie that have been in the same location for 20 years,” Elkington said in
an interview. “That says to me these tenants would be very interested in owning
their own space.”
Elkington said the city would get a
badly needed payment, and the property would be put back on the tax rolls. Under
city code, the city must auction property it wants to sell, conjuring up a
vision of television cameras from across the country clustered at the courthouse
steps as reporters say things like, “A busted city auctions its soul.” But
Elkington says it doesn’t have to be that way. Leases could be structured so
that tenants would have first crack at properties. To set a benchmark, he
suggests selling off the Terry Building at 203 Beale, home of Performa,
Alfred’s, Dyer’s, Wet Willie’s, and ESPN 730. The building should fetch $6
million to $8 million, Elkington estimates.
Most
visitors to Beale Street probably don’t know or care that the city owns the
entertainment district. The recent history goes back to the early 1980s, when
most of the current buildings were constructed and the street was repaved in an
attempt to recreate some of the nightlife and excitement of Beale Street before
urban renewal. Elkington was hired to manage it in 1982. He recalls a City
Council member warning him in 1983, “Don’t come back, because we are not putting
any more money down that rat hole.”
Sandwiched between Peabody Place and
FedExForum, Beale Street has only recently been in such fast company. In the
early years of redevelopment, bars and restaurants came and went, and the
street’s neighbors were parking lots and vacant land.
Elkington said Beale Street businesses
have paid approximately $42 million in liquor and sales taxes since 1983 and
will gross roughly $40 million this year.
Selling Beale Street could be complicated. B.B. King’s Blues Club, Hard Rock
Cafe, and Pat O’Brien’s have separate deals with the city. The Beale Street
Development Corporation, a separate entity that would make a title claim, has
been at war with Herenton for years. Its original mission was to promote
minority participation, but that role has been taken over by the Beale Street
Merchants Association and Performa.
“We are open-minded on what direction
to go, but we have been overlooked by this administration,” said Randle Catron,
executive director of Beale Street Development Corporation and a candidate for
Memphis mayor in 2003. “I have no problems with John Elkington at all. It’s the
city administration that has ignored us.”
Herenton’s administration inherited
Beale Street leases and management agreements negotiated by his predecessors,
mayors Dick Hackett and Wyeth Chandler and staff. Hereton’s spokeswoman, Gail
Jones Carson, said he received Elkington’s letter but had no comment at this
time.