Thursday, January 24, 2002

Who Do You Know?

Well-connected Memphians lobby for a piece of the new arena business.

Posted By on Thu, Jan 24, 2002 at 4:00 AM

Whether or not the Grizzlies take over construction of the $250 million arena, some well-connected folks are jockeying for position as it comes time to award lucrative contracts.

The Grizzlies made the big news at last week's meeting of the New Memphis Arena Public Building Authority (PBA) by offering to take responsibility for any cost overruns in exchange for control over the project.

"It is an incredible advantage to the city and county if somebody stands up and says, 'We'll pay the overruns,'" said Stan Meadows, senior corporate counsel for the Grizzlies.

Overruns are a gray area in the biggest public-building project in city and county history. Since last May, the city and county and the Grizzlies have had an uneasy agreement laying responsibility on whichever party is responsible for busting the budget.

"It was a compromise neither of us liked," said Tom Jones, special assistant to Shelby County mayor Jim Rout.

If the proposal flies, it could leave the PBA in something of an advisory capacity, depending on how the details are worked out.

That doesn't suit vice chairman and state Sen. John Ford.

"You're asking me to abdicate my responsibility," Ford said, insisting that the project involved state funds and other public money and, hence, should be controlled by the PBA.

Ford is among a host of Memphis politicians, consultants, union leaders, and construction firms that either closely observed or took part in last week's meeting.

Among the others:

* Cecil Jernigan, brother of Dean Jernigan, who until two weeks ago was one of the driving forces of the PBA and chairman of its construction committee. Dean Jernigan resigned his duties to devote more time to his business, Storage U.S.A., which is in the process of being acquired by another company.

Cecil Jernigan is helping Beers Construction Co., which is bidding to be the general contractor. In November, the construction committee chose Beers, Flintco, and Bricks Inc. to do pre-construction services on the arena. Dean Jernigan abstained from the vote, citing a financial relationship with Beers from the construction of AutoZone Park, which Jernigan and his wife spearheaded as cofounders of the Memphis Redbirds.

Cecil Jernigan could not be reached for comment. Chuck Winstead, group president of the Beers home office in Atlanta, said "he has worked with us in the past." At last week's PBA meeting, Jernigan signed in as a representative of Beers/Flintco/Bricks. Winstead said Cecil Jernigan "offered his assistance" as a friend of the project director and superintendent and "is not being paid."

* Franketta Guinn, head of the consulting company Monguinn Enterprises, which is working with the PBA on minority participation. Guinn is chairman of the board of Memphis Light Gas & Water. Monguinn Enterprises has a $125,000 contract with Tennessee Valley Authority to assist in minority contracting.

* Carol Crawley, Guinn's partner in Monguinn Enterprises. Crawley was chairman of the board of the Center City Commission until last July.

* Michael Hooks Jr., chairman of the Memphis City Schools Board of Education. Hooks is working as a consultant to local trade unions trying to get the PBA to agree to a "project agreement," which would essentially mean getting labor from union hiring halls. As chairman of the school board, he also has a voice in school construction contracts.

* State Rep. Larry Miller, chairman of the Minority Participation and Partnership Committee of the PBA. Miller's committee attempted to get the PBA to adopt a policy of giving "maximum practicable opportunities" to businesses owned and controlled by women or racial and ethnic minorities. But the PBA sent the proposal to its lawyers instead, supposedly to ensure its constitutionality.

Arnold Perl, chairman of the PBA, said a decision will probably be reached on the Grizzlies' offer to become what he called "the at-risk developer" before the next meeting in February. Perl said the overriding mission of the PBA is to build the arena on-time and within budget with minority participation and community involvement.

"That is going to be achieved whether this proposal is adopted or not," Perl said.

Perl and Meadows put a new spin on the arena as a facility that will be used as much for concerts and other events as it is for basketball. Perl said it will need 250 event dates a year to be viable. The Grizzlies can only promise 45 to 60, depending on whether or not they make the playoffs. Architectural drawings of the arena emphasize its connection to Beale Street and its attractiveness as a music venue.

In contrast to The Pyramid, where the acoustics had to be overhauled two years after the building opened, "this is going to be right for both," said Perl.

The goal of 250 events is ambitious. Alan Freeman, general manager of The Pyramid, said it would be "difficult" to significantly increase the number of concerts that come to Memphis because of competition from Tunica. Freeman said The Pyramid averages 15-20 concerts a year, with a high of 24 during his tenure.

Meadows said the budget, including $220 million that will actually be spent directly on the arena, is "adequate."

"It's not the budget, it's how much you get for the budget," he said.

He said the figure of 250 event dates is probably high because it includes low-revenue producers. Realistically, he said, the arena needs 150 "good dates."

The construction schedule is important because the Grizzlies would like to leave the cramped seats and low-budget suites at The Pyramid after one more season, not two, as some projections say.

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