Archive for the ‘Beale Street’ Category
February 16, 2016
TDZ (Tourist Development Zone) Revenue Review
I have been investigating the revenue flowing to the City of Memphis for the downtown TDZ zone which includes Bass Pro. This has been quite interesting and informative.
First I went to the State of Tennessee and got on their website that shows sales tax revenue sent to the City of Memphis for various items like state sales tax (the 7% sales tax), mixed drink tax and particularly the TDZ tax for the downtown tourist development zone. Here is the result of my investigation for the fiscal years ending June 30 of the years shown.
|TDZ Zone, 7% state sales tax receipts||TDZ Zone, 2-1/4% sales tax receipts||Total sales tax receipts for year|
|2012||$12.1 million||$1.1 million||$13.2 million|
|2013||$12.7 million||$1.6 million||$14.3 million|
|2014||$12 million||$1 million||$13.1 million|
|2015||$16.8 million||$3.6 million||$20.5 million|
Therefore 2015 shows an increase of over $7 million from 2014. This is indeed good news but where does it come from in the downtown TDZ? Bass Pro did not open its doors until May 2015 so it is not likely to account for the increase in sales taxes in 2 months of operation.
I asked the state of Tennessee about what businesses the sales taxes come from in the TDZ. They replied that state law does not allow them to give out that information as that would allow competitors to know the amount of sales from the various tax collecting businesses This restriction is reasonable. Does the City of Memphis know or have a right to audit the sales figures? I do not know but I am sure the State of Tennessee has that right. I called the Downtown Memphis Commission office and asked them where they thought the extra sales tax revenue was coming from. I have yet to receive their answer.
It will be interesting to see what happens in the future. There is a question about the Bass Pro contract concerning the rent which is based on 2% of sales. However there are questions about the 2% rent formula that will possibly not apply to leased facilities in Bass Pro. Also questions about the income from the elevator ride to the top being reduced by costs of employees and other restaurant and elevator expenses. This would reduce the 2% rent payment amount.
In any event, the news of the increase in TDZ revenue in the year ending June 30, 2015 is good news if correct. What are your thoughts?
February 8, 2016
ROI (Return On Investment)
Recently I asked for the following information from the Riverfront Development Corporation.
I received a prompt answer to these questions (with some delay due to my fault). You can look at the attached results.
They say the cost was $43.5 million with the Feds and State kicking $11.8 million, Housing and Community $1 million and the City $30.6 million. All of this is taxpayer money. Now we all recognize that parks, playgrounds, running and biking trails and other civic amenities do not pay a return on investment in a true business sense. However this restaurant/souvenir shop and boat landing should pay a better return than is shown by the landing operation income and expense sheet shown above. Except for the Foundation Corporate Grant of $75,000, it is losing money each month. Maybe the additional income generated by river boat tourists landings make up for some of this but could the landings have been done without this $43 million dollar project? Virginia McLean certainly thinks so. Here is what she told me recently.
Our new $43M taxpayer funded boat dock probably might make it easier (at the right water-levels) for passengers to board and has probably led to more business for our local daily excursion boat company, but I’m not absolutely certain about either of those points, and I can’t imagine that Beale Street Landing has had a serious impact on multi-state-city riverboat cruises. The boat companies appear to be promoting Southern history, food, and music as draws for cruises on the Mississippi River. They dock at Natchez, Vicksburg, Helena, Paducah, to name a few, and those cities/towns don’t have expensive new boat docks. The boats appear to just tie up at the shore (like they still do here at Greenbelt Park when water levels are low ) or dock at historic landings like in St. Louis on the old landing which is adjacent & beneath the plaza the Arch sits on or at basic, simple open-air ticket-sale type places like in New Orleans’s Woldenberg Park. Personally I think Mud Island River Park’s landing would probably beat out anything, including Beale Street Landing. When the boats docked over there and if it was being run properly visitors would have had access to restaurants, a music, pretty park, amphitheater, and via monorail or skywalk downtown city by foot.
I’ll stick with the idea that we didn’t really need it, couldn’t afford it, and now what do we do about running and maintaining it?
The Mississippi River is our greatest asset but it is huge and powerful and maintaining anything on the river always ends up costing more than expected. The Beale Street Landing will continue to cost us in the future to maintain it. We do not need the Riverfront Development Corporation to guide and lead changes to Mud Island River Park considering their past history. What do you think?
September 2, 2014
Return On Investment
The City of Memphis pension board voted to change their investment strategy to raise their return on investment. I hope they are successful but they are taking a chance like the gambler at Tunica on the crap table. Seven come Eleven.
Look at this Asset Class Return Chart. These sectors rotate from very good to average to bad to very bad. Anyone that says they know what the future will be, will be very rich or very poor if they are risking their money. If they are risking someone else’s money, they will be very sorry but well paid for their advice.
Now here is what I would like to see. What is the return on the investment for the $43 million dollar development known as the Beale Street Landing? I went there a few days ago and below are some pictures. I would like to see a financial report on the return on investment for this structure. This is not like spending money for roads, sewer lines, parks, street lights, public safety and criminal justice. We must have that for a civilized society. But the Beale Street Landing must produce a return on the investment. Give us a report on RETURN ON INVESTMENT and a reason to continue to hire the high priced staff that brought us this investment. Here are some shots from our $43 million dollar investment. Parking $5.00 minimum, $15.00 maximum. Nice restaurant and bar with average lunch prices but they cannot get a professional restaurateur to operate it so they are running it themselves. Hours, 9 AM to 4:30 PM Monday through Thursday, 9 to 7:30 on Friday, 11 to 7:30 on Saturday and 11 to 5 on Sunday. Where is the romantic nighttime supper watching the boats on the mighty Mississippi?
December 4, 2013
The Convention Center
I have been out of town visiting my daughter, son in law and grandson in San Francisco. It is a lovely town but not much fun getting there and returning by air from Memphis. I picked up a recent morning paper and found that the flights from Salt Lake to Memphis and back were being cut further. In past years there were nonstop flights from Memphis to San Francisco but now we have to fly to Timbuktu to get there and the price is out of sight.
I spent the first day back visiting with Kevin Kane, President and CEO of the Memphis Convention and Visitors Bureau. It was a pleasant visit and he is very knowledgeable about the Convention Center and visiting Memphis in general.
What I was after was the annual financial statements of the Cook Convention Center. I had tried to get these statements directly from the Convention Center office but either they were never in or they refused to answer calls. I had the June 30, 2007 financial statement but none later. The 2007 statement showed a loss of $3.5 million dollars.
After discussions with Kevin he promised me that he would get the 2008 through 2012 statements to me and that since 2007 the losses have been cut at the convention center. He sent the statements later and the 2012 loss at the Cook Convention Center was cut to $2.8 million dollars. We discussed the future of convention centers in general and the new costly one in Nashville and the old Cook Convention Center and the possibility of a new one for Memphis. He said that all convention centers lose money but the purpose is to develop tourism for the city and make money on tourism generated sales taxes and hotel, motel and car rental taxes. I speculated that internet advertising and electronic face to face meetings might eventually diminish convention trade but he contended that face to face meeting were still important.
September 12, 2013
As I start reading through this massive document I have to start with the introduction and rationale of the plan. Here are the first 26 pages of the draft plan.
To be a successful urban area, Memphis has to do the following.
- Increase property values
- Decrease poverty
- Ensure government efficiency
- Improve neighborhoods
- Invest in human capital
- Grow the economy
Wow!! What great ideas. Why did I not think of those?
November 8, 2012
There was an article in the Commercial Appeal last week concerning a court ruling on the ownership of Beale St. The judge ruled that Performa Entertainment Real Estate Inc., the company that has run the Beale Street Entertainment District since 1982, can assign its sublease to the city of Memphis.
This brings to mind that in 2006 I received a report that there were 17 boxes of Beale Street documents stored in a locked closet at Robert Lipscomb’s Office of (more…)
As I read through the final agreement between the City of Memphis and John Elkington, see attached, I am amazed by the terms. Consider the income stream that Performa gets for the next 22 years.
A friend of mine said recently when I told him about my recent experience with lack of transparency in a local government agency “Where there’s obstruction there’s fear. Where there’s fear there’s uncertainty and ignorance. Where there’s uncertainty and ignorance there’s a bloody mess.”