Behind the Headlines — January 23, 2015


(female announcer)
Production funding for “Behind the Headlines” is
made possible in part by.. The debate over the fairground
redevelopment tonight on “Behind the Headlines.” [theme music] I’m Eric Barnes, publisher
of The Memphis Daily News. Thanks for joining us. I’m joined tonight
by Kemp Conrad from the Memphis City Council. Thanks for being here. Eric, thanks for having me. Kevin Kane from the Memphis
Convention and Visitors’ Bureau. Thank you.
Sorry about that. Taylor Berger, a small business
owner and real estate broker. Thanks for being here. And Bill Dries, senior reporter
with the Memphis Daily News. We’ll talk. You all have various
perspectives on this. Opponents and
proponents, concerns. And we’ll try to walk
through all the details. I’m going to
start with Bill. And maybe, Kevin,
you can pipe in, as well. Just give viewers who
haven’t read on the most recent iteration what is the
proposal for the fairgrounds for the fairgrounds
redevelopment. And then we’ll
continue to break it down. Well, what you’re dealing
with is basically a renovation, a reconfiguration of the
fairgrounds as amateur sports, as places where sports
tournaments are played not just locally but, you know, leagues
coming from around the country to tournaments on
the fairgrounds site. You would also have on
there some kind of real estate component that’s
not athletic fields, which would be.. I think there’s
been some talk, Kevin, about retail as well
as possibly a hotel, something like that. I think the one thing that we
came out of the briefing on this past Tuesday at city council
with is that it’s not going to be restaurants. Right. And then, also,
before I get you in here, Kevin, there’s talk of
tearing down the Coliseum, which is always a
controversial talk. Putting up a multi-purpose, um,
facility that the schools could use for graduations and can
be used for other things. There’s talk of
additions to Fairview, what used to be called Fairview
Middle School and is now the Maxine Smith
STEAM Academy. There’s some
money for schools. And we’ll get in to
all of those details. From your point of view, Kevin,
is that kind of the shape of the project as you see it? Well, I think that the Tourism
Development Zone Act was created in 2004. And it was basically created
across the state as a vehicle to build convention centers. And the first few
were used that way. In 2007, the Tourism Development
Zone Act or law was amended to include sports
related facilities. And, you know, our first one
was really built around our convention center even though it
was really for construction of the FedEx Forum. And then it got shifted in the
latter years to center around another sports — started
off to be a sports facility, the Pyramid, that later
would become Bass Pro. And it’s worked quite well.
It’s generated a lot of money. It’s done everything
that we wanted it to do. There’s 12 of these
across the state. When you look at the dollar
volume that Nashville and some areas in East Tennessee have
been able to garner off this, we’re really on the
short end of the stick. So, you know, on
the simple math, I would say if we could turn all
of Shelby County in to one big T-D-Z, shame on
us for not doing it. I don’t think the state
would allow us to do that. But, you know, T-D-Z’s are
basically money that would be going to Nashville that
you’re able to keep here. In my really
laymen’s terms here, it intercepts that, that
sales tax money that normally.. The growth, not the.. There’s a baseline
that’s established. So, that still goes to
the state of Tennessee. We will keep the growth that has
generated hopefully by a rising tide lifting all boats. People coming to town, people
coming to do sports things, spending money at
the retail there, spending money at other
areas within Midtown. And that’s the idea. That money, instead
of going to Nashville, stays. And the concept around the
fairgrounds is because we have Liberty Bowl Stadium and you
have the Children’s Museum that obviously draws, you know,
tons of families and youth. And now we
have the Kroc Center. It’s to build on that and to
turn that in to something that would attract the
youth sports market. So, of course, I’m a supporter
for an indoor sportsplex more so than a bunch
of ball fields. And I think, you know,
in time, if it happens, conventional
wisdom will prevail. Okay.
Taylor, let me bring you in. You’re known for being
a part of Untapped down at Tennessee Brewery. You’ve got
restaurants around town. Real estate broker.
A lot of stuff in Midtown. I don’t know. People have said sort of
cutting edge things and so on. You’re real concerned
about this proposal. Is it you don’t want a big
youth sports facility on the fairgrounds or is it more
about the funding or what? It’s always really
exciting to build something new. I mean,
I know I love doing it. I wonder that in all that
excitement we kind of lose perspective on what
we’re building and whether it’s really
sustainable. Youth sports is a
growing industry. I think something
like $7 billion a year. Frankly, we’re a little
bit late to the game. If we had done
this ten years ago, we would have been
ahead of the game. But since that time, many,
many municipalities across the country have been
building these things. And a lot of them
are not doing so well. You know, Memphis is cool.
I love it. But, you know, we’re competing
against Nashville and East Tennessee in our
own state as well as Orlando, Las Vegas. Everybody has kind of
got these things now. So, I wonder, you know,
is the impact going to be as big as we hope. I’m sorry. But do you have
concerns from, you know, you own restaurants. I guess there’s now talk that
there wouldn’t be a restaurant on the fairgrounds
partly in Cooper-Young. And all the restaurants are
in Overton Square and so on. But do you
worry that it’s.. There might be viewers
out there looking to say, “He’s just, you know, he doesn’t
want anybody to get on his territory, on the
business he owns.” Is that part
of your concern? If this succeeds, then I think I
and all the other merchants in the area do better. You know, it’s
just a question of, you know, just because we build
it doesn’t necessarily mean they will come. And if we do build, you know,
youth sports a million square feet, the cost of
maintaining that, the costs of
operating it can be huge. And I wonder where
that cost will ultimately lie. I mean, will they be
coming to the city? Yeah.
Well, let’s ask the councilman. I mean, technically the
council voted in support of a fairgrounds
proposal T-D-Z, excuse me, a couple of years ago
if I’m not mistaken. But you — We talked a little
bit before the show — and other who have been on the
council recently said, “Hey, I think they
need to come back. The program has changed.
We need some more details.” So, you’ve got
concerns about it? Well, that was
always the plan. Hey, we approve
the overall concept. But there are a lot of
details to be worked out. That’s one of the reasons why I
wanted to have it in committee so we can learn what had
happened since we voted on it, get the latest
kind of updates. And a lot
has changed. And I would call it overall
kind of half-baked right now. We need to fully bake this
cake if we want to get it passed in Nashville. Mister Berger raises some great
questions about operations. One of the things I think would
help get this passed and get all the stake holders aligned is
to go ahead and lock in now the governance structure. You know, we have a Sports
Authority board that was focused on new sports many
years ago I believe. They went to then focus on
building the FedEx Forum. And I think it’s pretty
much lying dormant now. That might be a good
collaborative structure that we can bring back and go ahead
and put the governance in place. So, we have
someone from the city, someone from the county,
someone from the C-V-B, someone from Game Day Baseball,
someone from Mike Rose. One thing, too, you know, the
key to success in any business or any government or any city
is you’ve got to figure out what are your
competitive advantages? What are the things that you
have that are very unique that are hard
to replicate? And you
leverage those. You focus on two or three
things and you do those well. You don’t try to be all
things to all people. And I would disagree a little
bit with Mister Berger because we’re not starting
from scratch here. It’s not like we’re
saying, “You know what? “We’re going
to use sports. You know, let’s go
chase this new dream.” We do chase
a lot of dreams. We do build too many things and
have kind of project envy when we should focus on the basics of
city government and focus more on kind of children and
families and issues like that. But we already have huge
community assets here. We’re doing
youth sports now. Game Day Baseball,
I think, creates 30,000 room
nights a year. Over 30,000 room nights
and they want to expand. So, my thing is
this can’t just be a Memphis city
fairgrounds project. We’ve got
to collaborate. A lot of times, the city is
not very good at collaborating. You’ve got Game Day Baseball.
You’ve got Mike Rose. You’ve got
Snowden Grove. I bet there’s over 100,000
hotel room nights a year. I don’t know. If we got 30,000 and
multiplied it by three. Maybe it’s a little bit less.
Those are hotel room nights. Those are people
buying restaurant meals. You’ve got a nephew
who’s very good at athletics. I’ve coached him before. I guarantee you he’s going to be
on the road soon with his mom, his dad, his brother, his sister
and they’re going to be out for a whole weekend. They’re going to be
staying in hotel rooms. They’re going to
be buying meals. Youth sports
done right is a very, very economical way to
do economic development. We’ve got a huge opportunity
but we got to do it right. We got to
do it right now. We got to get the
stakeholders on board. Then we can get it passed
and make this a success. One more question
and I’ll get Bill in here. So, you just made a
great case to vote yes. But you still
have some concerns. Is it the funding? A big question always comes
up with these deals is, does.. Ultimately if it fails
for whatever reason, we go in to a recession, are the
taxpayers of Memphis on the hook to continue to pay for
this for the next 20 years? First of all, the
Devil is in the details. I agree.
The concept is good. But now the details
need to be worked out. Mister Berger has done
a great job of raising some of these questions. Operations,
operating expenses. So, exactly what’s going
to be programmed there? We don’t even know. There was a report back in 2013,
the Charlie Johnson report, that laid out where
the opportunity was, the multi-purpose
stadium and things like this. I would not support it
as it is now until.. It’s never going to pass until
we get these things worked out. What was your
second question? That’s good.
Let me get Kevin in. First of all — and I’ve
got a great deal of respect for Taylor. I’m a big fan of his. He’s done some great things
throughout the community. He’s been great for tourism.
But I vehemently disagree. We’re not
late to the game. Memphis is a great
youth sports market. Mike Rose Soccer Complex,
go out there any weekend. You look at what’s going
on, taking place there. They’re looking to expand. They want to get bigger because
they are busting at the seams with opportunities
for events. Game Day Baseball. Even though they lost
their title sponsor, Game Day Baseball, which is
privately owned by the way, which is kind of rare for these
type of multi-purpose facilities or multi-sportsplex
with lots of ball fields, or courts, or
whatever it might be. They’re busting at the seams.
They want to expand. They don’t have any
available weekends. We’re bringing tournaments
in from all over the country. Volleyball. This weekend at the
Cook Convention Center, the next two weekends,
we’ll have 7,000 people in town for
youth volleyball, the Martin Luther King
Volleyball Tournament. We had a big
gymnastics tournament at the Convention Center
two weekends ago. We have A-A-U basketball that’s
here in the summer for four or five weeks in the summer, 13’s
and 14’s we’ve had for many, many years that we have to
spread out in four or five high school gyms in the
eastern part of the county. We are great youth sports
market and we can get better. So, we’re not
late to the game. I think we’re trying to
build on that opportunity. It’s amazing to see. I mean, our daughters played on
the same competitive volleyball team years ago. And I remember going to a
tournament in Saint Louis. And I spent ungodly sums
of money in that weekend. So, people think it is sort
of church league basketball or church.. It’s a whole
different deal. Nothing wrong with
church league basketball. This is a whole different
deal when you get in to these competitive sports. But, Bill, let’s
get you in here. Let’s talk about the Mid-South
Coliseum because it seems to me as if some of the discussion
about whether the Coliseum stays or goes is fueling almost a
separate discussion from the one about amateur sports. Taylor, how much of your
concern is based on the Coliseum going in this? Personally,
not a whole lot. I mean, if this
goes forward, I want, you know, if we can
use an existing facility, I think that’s smart. If it doesn’t work for
what we’re going to do, then it doesn’t work. I don’t think we can hold on to
something just for nostalgia. But there is a massive
contingency of people in the community who have a large
problem with getting rid of the Coliseum. I’d love to
respond to that. Yeah, we’ll get to you.
Hang on. Hold that thought.
So, that’s interesting. Because you did, you know, you
were involved with the Tennessee Brewery and that was partly
about keeping that thing alive. But you’re a little less
nostalgic on the Coliseum. I am. I mean, I think,
you know, this is.. If we do youth sports, it
has to operate well first. I mean, we can’t let this
fail if it does go forward. And if the Coliseum is
an impediment to that, then it has to go. I mean, we can’t let something
large fail because of nostalgia. Kemp, you were at the
council discussion obviously. When the Coliseum came up
not as a main component of the council’s discussion but
certainly there was some back and forth about how much
does it cost to renovate. Where are you in terms
of considering that? I think the data
should drive the decision, pure and simple. If we’re going to be
great at youth sports, we need.. That was one of my
frustrations in the meeting was that there wasn’t.. The program
really wasn’t together. So, if we’re going to be great
at youth sports and if this is going to be
successful after 20 years, we’ve got to put the
right programming in here. Now the data that I’ve seen that
I’ve really started kind of dig back in to now.. The data really points to
needing kind of this multiplex to do
the basketball. I think that’s
our one weakness. And then I think you
asked about tax payer funds. What they told us Tuesday was
that these would be revenue bonds not
backed by the city. So, there would not be
any city commitment to it. Now if the thing, you
know, were to default, there’s still
issues that come up. The taxpayers are
the ultimate backstop. No, not with
revenue bonds. Now someone is
going to have to come in. There might be a, you know..
It causes challenges. So, we’ve got to really make
sure that we buy in to the underwriting, you know, through
that due diligence process. So, it doesn’t impact.. The taxpayers would
not be on the hook. But a credit
rating or, you know, if the city wants to
go do other things, this is totally
off the books. Yeah, they’re
revenue bonds. Kevin, your
point about this. There’s some nostalgia factor
for you with the Coliseum. You know, I played for the
Tigers J-V basketball team in the ’70s in the
Mid-South Coliseum. You know, I saw all
my first concerts. I got a lot of great memories
of the Mid-South Coliseum. The reality of it is is
the Mid-South Coliseum was functionally obsolete
for a couple of reasons. Number one,
A-D-A requirements. It would cost millions
to bring that up to code. The lighting
in the building. They don’t even manufacture
those lights anymore. You’d have to do a
whole new lighting grid. That’s hundreds of
thousands of dollars. I think to get the Coliseum up
to code and to get it modernized would cost as much as 28- $30
million is what I’ve heard, which is about what one of
these modern indoor multicourt sportsplex that could have six
or seven basketball courts with a championship
court that, you know, for championship
events, graduations, Lady Tigers basketball, whatever
you want to do in there. It could also be
used for volleyball, gymnastics, cheerleading and
other types of activities. The problem with the Coliseum
with 11,200 seats and the way the building is built,
you can’t make a lot of those
seats disappear. They’re built in to the
structure of the building. You’d almost have to tear the
walls of the whole side of the building around the
building to make that work. So, the footprint that you have
to work with does not even lend itself to have two
basketball courts in there, much less five or six. So, you know, it
just doesn’t work. And it’s
unfortunate but, you know, we had to tear down Ellis
Auditorium a few years ago. And there was a lot of
nostalgia about that. I can tell you Ellis Auditorium
is nowhere close in comparison to the building that the
Canon Center is now today. Sometimes you just got to say
goodbye to something and you’ve got to move forward. And I think unfortunately the
Coliseum has lived its life. I should say, too,
just so people.. There are good stories on
our side and the C-A’s side and so on in this. But what we’re talking about
is a $30 million multi-purpose facility, a 30 year
bond and, you know, paid from what they’re
estimating to be $340 million in incremental sales tax revenue
over that 30 year period. So, we’re talking
about big, big money. That otherwise would
have gone to the state. Right. No, and it’s good because it
somehow gets in to the debate. We’ve talked a
lot about PILOTs. I mean, so many PILOTs have
been talked about on this show. Everybody comes in
and talks about PILOTs. Kind of hates them but they want
to use them or hates them and they want to stop. This is one where you —
I’ll just go to you — as a politician, a T-D-Z, you like
if the details get filled in. Right? I mean,
it’s not a tax giveaway. Any of these incentives
get framed by some people as tax giveaways. This is not from
your point of view? This is money that
would otherwise go to the state
of Tennessee. And so, these are dollars
that would go to somewhere else. We’re keeping them here to
improve our community and to generate, you know, generate a
lot of opportunity and business for restauranteurs. But what
about the perspective? I mean, you’ll get people.
We’ve had people on the show. They say, you know,
if governments involved, it’s a bad project. It should just
stand on its own. If we want to get a youth
sports facility on there, we want to get retail on there,
we should just sell the land and the private sector should just
take care of the whole thing. And the government
shouldn’t be involved at all. Your response to that? I think what we’re
trying to do is facilitate, you know, private people coming
in and then ultimately doing it. Someone has got to go, you know,
and get the support and get the stakeholders together. And we probably
need to have more, you know, private involved
and not just be city lead. So, I think it should be
a collaborative approach. And your
take on that? I think there’s a reason why
individuals or corporations don’t build, for the
most part, arenas, stadiums, convention
centers, performing arts halls. There’s a reason why the
community owns those assets. Number one, the quality
of life impact they have for a community. Number two, these things
are not sustainable as for profit ventures. I mean, we’re so fortunate that
the Grizzlies are on the hook for the operations
of the FedEx Forum. Because in Nashville, the
Predators are not on the hook for the operation of
Bridgestone Arena. Bridgestone Arena loses millions
of dollars a year as a building. And the FedEx Forum probably
doesn’t make any money as a building. But if it loses money,
the Grizzlies are on the
hook for that. That was a real smart thing
our governmental leaders did, you know, 15 years ago when they
cut the deal with Mister Heisley and the
ownership group. So, you know, you’ve got to
have these public facilities. We got to have
convention centers. We got to have performing arts
halls and we got to have sports facilities if you want to
be a world class community. Yeah, yeah.
Bill? Taylor, I think you
have a point on that. That’s really my worry is that I
haven’t seen anything about that kind of the private
developer backstop idea. All of this money that
we’re talking about, this free money, it goes
to build the buildings. But there’s huge costs in
operating and maintaining those buildings that nobody
has really talked about. Is that the part of the
weakness of the plan that, you know, if you
compare it to, say.. I know it’s a little
apples and oranges. But you compare it to
Overton Park or Overton Square. Bob Loeb.. I mean, whatever you
think about that project, Bob Loeb comes in and
says I;m going to put up, what? — $20 million if the city
will put up whatever five to ten for the parking garage
and the water retention. The same thing with Graceland
in the T-D-Z down there. Graceland has spent a
ton of money down there. There’s a kind
of named partner. Is that part of the
weakness with this? There’s no
named partner. Yes. I mean, the irony of this is
that a private developer came to the city, you know, in
2007 with this same proposal. But at that time,
retail was great. Target was at the table. You know, you had
a name developer, someone with stature in the
community, saying, “I’m going to invest
substantial capital in this now if you can
put in some, too.” You know, we
don’t have that now. And, you know,
they’ll say, well, we’re going to put out an
R-F-P and that’ll happen. Let’s go ahead and get
those guidelines for what we’re going to require. Are we going to require that
developer who submits an R-F-P to backstop
potential losses. You know, these are the things
that need to be discussed now. Do you
agree with that? I mean, is that part of the
concerns that people have about the project that there’s
no named private partner? It feels to some people like
a build it and they will come kind of project. Well, I think, you know,
I mean, Kevin said it. I think, well, let’s go get
it approved and get the funds. Then I think that’s when some of
those details can be worked out. Now I think there’s a lot more
that needs to be worked out, you know, on the
front end right now. Do we need to have the
whole structure on the process? I don’t think
the city really.. I think the idea is that we will
go out and do an R-F-P and have a private.. The city is not going to be
the developer on this project. And I think that Wharton said
to me when he was on the show, he talked about that and
said — and I’m paraphrasing. Look, if we get
this thing approved, it’s not like we’re going to go
start building before we have this partner in place. We’re going to put that
R-F-P, the Request For Proposal. We’re going to talk to
people and get them in before. The city cannot go out and build
a hotel and then go hire Hilton to run it. The city is not going to build a
60,000 square foot strip shopping center and go hire
Simon Malls to come in here and operate it. I mean,
that’s ridiculous. But that’s the
impression people have. But this is as Kemp said.
This has to be market driven. Whatever happens on the private
side has to be market driven. And I think what will interest
the private side if you do the infrastructure right around on
the rest of the footprint on the public piece
whether it’s a multiplex, sportsplex,
whatever it might be. When you do those things,
that’s what garners an interest of private developers. And that’s where they
will come to the table. This thing
is a process. This is not something where you
just wave a magic wand and you just make it happen. I mean, you know, you got
to go through the process. I think Taylor brings
up some great points. I think you do need to make sure
that you’ve looked at this thing very thoroughly
because you’re right. The utility bill on an eight
court basketball complex.. Heck, the utility bills alone is
probably more than what bid fees for tournaments would bring. But unfortunately, a lot
of this is not about bid fees for tournament. A lot for these complexes
whether it’s a convention center or Game Day Baseball
and Mike Rose Soccer, how many people do you bring to
your community that stay in your hotels, that eat in
your restaurants, that go to your attractions, how
much taxes do they generate and how much economic benefits do
they generate for the community? I just want to say, too, I
think the examples you gave, Overton Park, Graceland,
those are privately owned. So, Bob Loeb bought Overton
Square from a private owner. This is a city
owned asset right now. So, I don’t think that
tax payers will say, “Okay, Mister developer here,
we’re going to give this to you to go do
what you want.” I mean, I think the city needs
to have a bit of control in a collaborative way. The market will bear
what’s developed there. But there will be a private
entity that will come in. You’ve got the private piece and
then you’ve got the kind of the youth sports piece of it
and the operations piece. And the
math has to work. And from an elected
officials standpoint, votes like this,
like Redbirds Stadium, you know, these have very,
very long tails to them. And we want to make very
sure that they’re done right. Bill? So, the council voted
on the concept once. Should the council
vote on this again? And if it does, does a vote on
that at before or after it gives the city its blessings to go
ahead for a tourism development? Perhaps. I think the council needs to
really be engaged from this point forward from here to the
finish line whether that’s some kind of liaison or it
comes back for a vote. I’ve got a bit of an
open mind on that. But I definitely think that the
council will be involved in some form or fashion from here
until it gets approved and then ongoing. I think we
have a duty. Taylor, some of your
hesitancy on this, some of your concern about
this seems to be that the train is
on the tracks. I don’t want
a Midtown Pyramid. I don’t want to be back here in
ten years trying to figure out what to do with all these
buildings that the private developers long ago left
because he didn’t want to bear the losses. So, we’re stuck with this and
now we got to figure out how to make it work. That scares me. And we will have used up
all of the Midtown tax, you know, sales tax
increment for the next 30 years. I’ll be 65. I’ll be a little
older than that. And Kevin, you have a
concern in this as well and that is about timing. Because as we
talked before the show, the state, the
Tennessee Building Commission, the state leaders in Nashville,
they’ve kind of had enough of the tourism development. I think Taylor
brings up great points. And I know that Kemp is thinking
this through because he has been involved in so many of these
projects to make sure that the city is protected in the
long run and the citizens are protected
in the long run. Get the Tourism Development Zone
and then figure out exactly how this thing
should be structured. But if we don’t get this
Tourism Development Zone, shame on us for giving $300
million over 30 years to the state of Tennessee. I agree with Kevin. And I think it will help us
to get the vote in Nashville. I was in Nashville for the
inauguration and I talked to the treasurer. I talked to a lot of my
friends in the house, in the senate, my
friends in F-N-A. I think if we measure
twice and then cut once, it will help us get
that vote in Nashville. And I just think
we’ve got to think, flush a few of these things out,
have a bit more of a solid plan. I think
we’ll get the vote. And I think, you know, with a
lot of the things that Mister Berger is talking about, we will
have a great project that all Memphians
can be proud of. Okay.
Just last second. Are you running for mayor or
are you one of the only city council-people who
aren’t running for mayor? I am not
running for mayor. I would like to
work with and serve, you know,
a great mayor. I like being on the council and
I would love to collaborate with a great mayor. We know we have one who is not.
Okay. Thank you all for being here.
Appreciate it. Join us again next week.
Goodnight. [theme music] CLOSED CAPTIONING PROVIDED
BY W-K-N-O, MEMPHIS.

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