Two pieces of the next expansion phrase of Elvis Presley Enterprises’ Graceland were approved Thursday by the Economic Development Growth Engine for Memphis and Shelby County (EDGE) during a specially called meeting.
The first of the two votes was a unanimous one approving a 80,000-square-foot exhibition and convention center, housing two 20,000-square-foot exhibition halls on each side with a lobby in the middle for food and beverage services.
The board then voted 5 to 3 to amend Graceland’s Economic Impact Plan, increasing their TIF (tax increment financing) by 15 percent in order for a 6,200-seat performance venue to be constructed.
EPE agreed to privately fund the arena if they received the increase. Still, the board, as well as Doug McGowen, the city’s chief operating officer expressed concerns that the arena could violate the city’s noncompete clause with the Grizzlies for the FedExForum.
McGowen said that even if the arena is privately funded, it could still make the city culpable in violating the agreement because of the coinciding convention center that the city could partially fund.
“Therefore we are hesitant to throw our endorsement behind something that could put us at risk,” he said.
Continuing, McGowen also questioned whether or not EPE’s projects should receive economic incentives at all.
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“It’s not about whether we want new development or not,” he said. “I’m here to talk to you about a policy issue — a policy about how we apply our economic development incentives in Memphis and Shelby County.”
He said he understands that economic incentives are given for two “really fundamental” reasons: to close an existing economic gap or to minimize and share the risk with a developer who might be a pioneer.
“Neither of those exists with the project we’re talking about today.” he said. “There is no financial gap. There is also no risk unless you ignore the performance of the existing phases of the project.”
The decisions by the EDGE board comes after it delayed voting on EPE’s proposed exhibition space for a second time last month, causing EPE to file a Chancery Court lawsuit against EDGE.
Additionally, last August EPE presented plans for the arena, and that’s when concerns first arose from city officials over whether or not its partial funding of the space would violate its noncompete clause with the Grizzlies.
EPE sued the city as a result.
Now, after receiving the OK from EDGE for both projects, EPE’s plans must be approved by the Memphis City Council and the Shelby County Commission, as well as officials at the state level. Additionally, the plan for the 6,200-seat arena must undergo judicial review.
If the plans are approved, EPE representatives say construction would begin “as soon as possible.” However, the city’s attorney Bruce McMullen said that a judicial review could take up to three years.
