Tag: Memphis Convention Center

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News News Blog

Memphis Tourism Broke Records Last Year

Beale Street remains Tennessee’s No.1 tourist destination.

Music is the core of an economic engine that brought a record 11.8 million visitors to Memphis last year who brought (and left) $3.5 billion here, according to Memphis Tourism’s latest figures.

Memphis Tourism is the area’s official destination marketing organization. In its annual MEMTalks industry event Thursday, Tourism officials announced the new record.

“As we celebrate our history as the home of blues, soul, and rock-and-roll, as an organization, we’ve also worked aggressively to set the stage for future growth and new development for tourism as an economic engine for our community, one that generates $1.13 billion in annual wages in Shelby County,” said Kevin Kane, Memphis Tourism president and CEO. “In the first few months of the year, we are very encouraged by the growth in visitation that we are already seeing in 2019, up 7 percent over 2018.”

Kevin Kane

The report said “music continues to be the core motivator for visitors” coming to Memphis. Peak tourist season falls between March and October here “when 1 million plus visitors arrive in Memphis and Shelby County each month.”

Tourism is booming alongside the development boom happening in Memphis, the report said, noting the surge in hotel rooms here.

”There are over 50 new hotels recently opened, under construction, or in planning across Memphis and Shelby County, with 15 of those hotel projects located in Downtown Memphis. The Downtown core will eventually see the addition of over 2,000 new hotel rooms, adding to current inventory of (more than) 4,000 Downtown hotel rooms.”

City of Memphis

Those rooms will be needed, according to Tourism, as the renovation of the Memphis Convention Center nears completion. The center will feature a column-free 118,000-square-foot main exhibit hall, a new exterior concourse and pre-function space, 46 breakout rooms, secondary flex space that converts to a 67,500-square-foot ballroom — the largest in the region, according to Tourism — and a 28,000-square foot ballroom to host smaller events.

“This long anticipated renovation will make Memphis competitive in the meetings and conventions market, while complementing the already strong leisure market segment,” Kane said. “A vital civic project, this will transform our city’s convention center into a modern showplace that preserves its status as a major economic engine for the destination.”

Where do Memphis tourists come from? In the U.S., they come mostly from Nashville, Dallas, Atlanta, Little Rock, and Chicago. From across the world, they come mostly from Canada, the United Kingdom, Japan, and Australia.

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Editorial Opinion

The New Convention Center Deal

It was roughly a year and a half ago that Mayor A C Wharton publicly proposed a fallback position regarding possible upgrades of Memphis’ convention facilities. He did so as a follow-up of sorts on what had been less than sanguine

estimates from Convention and Visitors Bureau head Kevin Kane about our city’s having the means to catch up with Nashville’s new glittering and cavernous Music City Center.

In an editorial of March 20, 2014, “A Patchwork Mecca,” we reviewed the mayor’s pitch for a scaled-down convention complex, outlined in a speech to the Rotary Club of Memphis.

From the editorial: “‘We don’t have the money. That’s the bottom line,’ Wharton said, pointing out the obvious. And anyhow, he said, ‘I don’t want to be Nashville or Atlanta.’ He thereupon proposed a method of taking the best advantage of the ‘legacy’ assets our city already has and connecting them in such a way as to be competitive in the tourist and convention markets without breaking the bank.”

The mayor went on to propose spending modest amounts of money ($50 to $60 million) refurbishing the existing convention center, as well as the now dormant Peabody Place, and connecting those two hubs with the then soon-to-be Bass Pro Shops Pyramid, the National Civil Rights Museum, and various other downtown attractions via the city’s trolley system. And “voila!,” as we said, “there you have it, a new convention center complex done on the cheap.”

Well, a funny thing happened between then and now. Several funny things, in fact: one being the discovery that our trolley system was dangerously unstable and fire-prone, requiring a retrofitting process, the dimensions of which remain uncertain. That by itself argued for a change of mind. But there were other factors, too — most of them considerably more upbeat.

The bottom line is that the powers-that-be have apparently decided that, not only do we want to “be Nashville or Atlanta,” we actually are in a position to give those boomtowns a run for their money. The aforesaid Convention and Visitors Bureau in tandem with the Greater Memphis Chamber of Commerce and the Downtown Memphis Commission have hatched a two-part plan: 1) to spend the aforementioned $50 to $60 million on refurbishing the existing Cook Convention Center; and then 2) to spend another $900 million in the next few years to expand the Convention Center all the way to the Mississippi River basin. All it would take, say the planners, would be a 1.8 percent increase in the city’s hotel/motel tax (which is paid by visitors to Memphis, in the main) and a temporary $2 fee on hotel-room stays of up to 30 days. This would cover a repurposing of the current bed tax in 2017 to pay off FedExForum bonds.

The Memphis City Council is considering the project right now, with every expectation of giving it the go-ahead. And we’re thinking, What! You mean, it’s really that easy? And we wonder why it is that we are always considering these complicated Rube Goldberg-like TDZs and TIFs to lift our urban bootstraps.

And, by the way, have we cleared this with the Grizzlies?

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Opinion Viewpoint

Vetting the Wharton Plan

Last week, Mayor AC Wharton opened the possibility that Peabody Place might be a good opportunity for increasing Memphis’ convention space on the cheap.

Peabody Place officially closed in 2011, though it was a ghost of itself near the end. Since its closing, there have been reports that the building would be redeveloped by Belz Enterprises into a combination of suites and convention space.

There’s no question the site should be developed into something. The question is what? Mayor Wharton thinks the answer is a convention center. Is that a good idea? Let’s start from what the city needs and work backward.

What the city wants/needs: Here are several schools of thought as to what the city’s convention business needs. Spend a little time in the Cook Convention Center and your first instinct will be — a modern convention center.

That modern space doesn’t have to equal the $650-million Music City Center in Nashville. The harsh reality is, we don’t have the hotel rooms downtown to justify a space that big. Increasing the number of rooms downtown should be the main goal, and it will take time. Occupancy downtown is a little below the national average, and the Average Daily Rate (ADR) is low. Until this changes, developers aren’t exactly going to flock to downtown Memphis.

Any of the three options under discussion — revamping the Cook Center, building a new convention center, or turning Peabody Place into a convention space — could bring more space and hotel rooms, but if the goal is increasing hotel capacity, the Peabody Place proposal has some competitive disadvantages.

Stacking the deck, public-private partnership style: The convention business makes money on two things: room rentals and catering. The space is just the means to an end.

If the idea of expanding the amount of convention space is part of a long-term plan to also increase tourism and the hotel room count in the city, then you may not want to build your space on land that is controlled by a large hotel operator. It creates a competitive advantage for the host hotel. It can bundle services (catering and rooms), which means other hotels are left in the lurch.

Another area of concern is the space itself. The ceiling is mostly glass, and there’s a huge atrium area that’s uneven and concrete, which means it will have to be leveled.

These aren’t deal breakers, but there are structural concerns that have to be dealt with for a convention space that an atrium-centered mall doesn’t have to worry about.

The 300: the myth of many small meetings: In an interview, Mayor Wharton spoke of a “niche market” of 300- to 500-person conventions that the city could seek out. It’s true, the 10,000-person convention market is small and very competitive. It’s also true that most conferences include fewer than 1,000 people. But there are some problems with Wharton’s premise.

First, no one builds with an eye toward the small market. They make large spaces that can be tailored to smaller meetings when necessary.

Second, any space should represent growth from the current convention center. Peabody Place is 300,000 square feet. The Cook Center is 350,000 square feet. There’s no question that adding Peabody would add much-needed space, but it doesn’t build on what we lack. It adds to what we’re already not utilizing.

Finally, Peabody Place is land-locked. There’s no room to grow in the future to accommodate new meetings, and the growing size of meetings that we currently host.

If we did build a new building, even half the size of Music City Center, we should make sure we have the space to expand — just in case.

Our ultimate goal should be bringing more hotel rooms to Memphis so we can compete for other things like an NBA All-Star game, a political convention, or whatever the next opportunity holds.

As for Peabody Place, if Belz Enterprises wants to redevelop it into something like Wharton’s vision, they should go for it. It’s not like they weren’t thinking about it already.

But there’s a reason Belz Enterprises hasn’t already turned Peabody Place into the very thing Mayor Wharton is proposing, and that’s because it’s just not feasible for them at this time. And that doesn’t make it look any more attractive as a public project either.

Steve Ross is a video director and event-production coordinator. He writes about local public policy at vibinc.com and state government at speaktopower.org.

Categories
Opinion

Investing in The Bass Pro Pyramid

Bass-Pro-Shops-Memphis-Pyramid-Store.jpg

Moved by mordant curiousity and a falling stock market, I called a local bond trader to see how those Bass Pro Pyramid bonds are doing now that the Bassmasters have admitted that this deal won’t be done until late 2014, if ever.

Bass Pro founder Johnny Morris has changed his mind again. The new details are, why bother, check the daily and its puff piece. Something about an elevator. Or an inclinator. Or two of them. This is his baby. It will probably change a few more times. Remember the glass band all the way around when he came here for the big announcement and fish fry a couple years ago? Here’s a less flattering piece from the national media.

All Memphis can do is wait and hope. And invest, if you’re brave enough.

Thanks to Johnny Lessley at Duncan Williams for the bond info. You’ll need a minimum of $5000 or more likely $100,000 to get in the game. These bonds are not widely traded. Mutual funds and insurance companies scooped up most of them in the initial offering. Some days they’re available and some days they’re not. It isn’t like buying cheeseburgers at McDonald’s except that a bad one can make you really sick.

There were three different bonds on this project, two of them taxable and one tax free, with different maturities as far out as 2030. A taxable 2030 will get you five percent interest if you can find one. A tax-free bond priced at $98.50 at issue, slightly below par, is $108 or $109 today. Not because Bass Pro’s prospects or the future of downtown Memphis has changed, but because interest rates have fallen since 2011. The bonds are rated “A.”

They’re backed by Tourism Development Zone (TDZ) revenue. A TDZ is a legislative creation to build convention centers in Nashville and Memphis, since distorted for all kinds of purposes and places. The Bass Pro bonds are not revenue bonds or general obligation bonds, which would be backed by the taxing authority of the city of Memphis. The interest payments come from TDZ funds collected downtown. MLGW is a big contributor. Nothing says “tourism” like “utility company” does it?

Bass Pro doesn’t start making payments until the super store opens. That will improve the debt service outlook because more state sales taxes will be rebated to the city.

Could Bass Pro Pyramid become another AutoZone Park, where the bond holders took what is called “a haircut” and didn’t get the payments they expected? Possible, but those bonds were backed by luxury suite revenue projections which turned out to be way too optimistic. That said, Bass Pro was supposed to be open late this year, so we’re talking about several million in lost sales taxes if this store is the retail monster it is touted to be. And Bass Pro, we have often been reminded, is just one part of the overall redevelopment of the Pinch District and Convention Center. Nothing is happening there, and nothing is likely to happen for at least another year in light of this week’s announcement.

So show your love and buy yourself a bond or two. If you can put your treasure in the promises of Johnny Morris and Robert Lipscomb and the retailing future of downtown Memphis for the next 17 years you’ve got a stronger stomach than I do.