The Commercial Appeal has decided that it should concentrate on local news. But that doesnt go far enough. It should break the chains of its corporate masters and become locally owned.
Excepting the Christmas decorations of Peanuts characters, Memphis gets very little out of having its only daily newspaper owned by the E.W. Scripps Company in Cincinnati. In the big picture, Scripps newspapers are as old-fashioned as founder Edward W. Scripps custom of smoking 40 cigars a day. After closing the Birmingham Post-Herald in September and selling its assets to its rival for $40.8 million, Scripps has 20 daily papers. The companys most profitable and cutting-edge media operations are its six cable networks, 10 television stations, and online shopping subsidiary Shopzilla.
Consolidation was the trend in the newspaper business in the 20th century. Now competition from the Internet and declining circulations are forcing editors, publishers, and investors to scramble. The CA announced another round of employee buyouts this month. The Knight-Ridder newspaper chain is up for sale, as a whole or in pieces.
Gannett is the newspaper industry giant, with 99 papers, including USA Today, the Nashville Tennessean, the Louisville Courier-Journal, and the Jackson (Mississippi) Clarion-Ledger. The Arkansas Democrat-Gazette, the survivor of a circulation war with Gannett that ended in 1991, is locally owned by WEHCO Media.
Contrary to popular belief, the newspaper business is quite profitable. Scripps newspaper division earned a profit of $167 million through the first nine months of 2005. The stock price has tripled since 1996. General Motors and Northwest Airlines are laying off employees and making cuts to try to regain profitability. The CA is buying out senior employees and cutting the size of the newspaper to maintain a profit margin that is anyones guess. The last reliable figure, 36 percent, came out inadvertently in a 1991 lawsuit.
Scripps spokesman Tim Stautberg said the company does not release financials for individual papers or comment on potential acquisitions or sales. The CA wouldnt be cheap, assuming Scripps would sell it.
When I bounced the idea off of Morgan Keegan chairman Allen Morgan Jr. and business consultant John Malmo, both of them were skeptical that anyone would pay the price. But I wonder. Memphis and Memphians overpay for lots of things, from former Grizzlies hoopster Bryant Big Country Reeves to the Cannon Center for the Performing Arts. A daily newspaper is endlessly challenging, entertaining, influential, and new. Memphis prides itself on being an entrepreneurial, major-league city. A bigger and better home-owned newspaper would distinguish it as much as an NBA team.
Scripps doesnt seem to have its heart in Memphis. Its annual report and Web site tout the wonders of food, home decorating, HGTV, the Food Network, Internet shopping, and shopping on television. Its unfair to blame CA editor Chris Peck and his shorthanded staff for the shrinking newspaper. The corporate decisions are made in Cincinnati. It would be better if the blame, the credit, the profits, and the decisions about the papers future stayed here.
The Tennessean, Clarion-Ledger, and Arkansas Democrat-Gazette are in capital cities and aspire to be statewide newspapers. The CA is in the difficult position of serving a sprinkling of readers outside Shelby County, which has more poor people and non-readers than any county in Tennessee.
So local ownership is a long shot. Its expensive. Its a tough business. But where is it written that newspapers must have a 20 to 30 percent margin? The Northeast Mississippi Daily Journal (Tupelo) is owned by a nonprofit. The Wall Street Journal puts out a daily primer in great newspapering, independent of the editorial page. Temper that with Elmore Leonards advice to aspiring writers leave out the parts readers skip and you have a good start. In 1948, journalist H.L. Mencken was asked about the new media: The way for newspapers to meet the competition of radio and television, he said, is simply to get out better newspapers.
news feature By John Branston
The Midtown monster is back.
At least as far as the planning office and public hearing stage. And that's as much of a life-sign as the massive Sears Crosstown building, opened in 1927, has shown in years.
Sears Crosstown is Midtown's biggest building and biggest eyesore -- 1.36 million square feet of empty space enclosed in dirty yellowish brick, broken windows, rusting fire escapes, and general neglect. It sits just south of the intersection of North Watkins and North Parkway, with a 200-foot tower tall enough to block out the afternoon sun for a piece of the neighboring Evergreen Historic District.
Too big and expensive to tear down and too old to attract serious interest as a retail store, Sears Crosstown is an 80-year-old orphan. Now that might -- underline might -- change.
The building is supposed to be sold in December, and a public hearing is scheduled for December 8th at City Hall on a redevelopment plan that includes retail, commercial, office, and residential space. An application was filed with the Memphis and Shelby County Office of Planning and Development (OPD) on October 26th. OPD will make a recommendation on December 2nd. The identity of the purported buyer, like the identity of the current owner, is vague.
Sears closed the last vestiges of its retail, catalog shopping, and warehouse operations in 1990. In 2000, Sears sold the property to Memtech LLC for $1.25 million. Beyond its incorporation in Delaware and its name, which evoked images of Memphis and technology, Memtech was an unknown quantity.
Memphis architect Guy Payne, who is working with the prospective new owners, said Memtech's living and breathing face was "a lady out of New York." Payne said the would-be new owners, who go by the name DBS LLC 2, include a local and an out-of-towner who are laying low until the sale closes.
"They're not going to tear it down," Payne said. "They will keep everything."
As a first step, Payne said the new owners plan to repair the broken windows, remove the rusty fire escapes, and seal the building off from the vagrants and thieves who have ransacked it over the years. Sears sits on 19 acres and includes a tower that is the tallest building between downtown and Clark Tower in East Memphis; an 11-story warehouse with a two-story addition; and a parking garage. The top of the tower includes an executive office (reputed to be quite plush by old-timers who have seen it) and a red, 75,000-gallon water tank that supplied a sprinkler system.
No one would propose building such a massive building today next to a neighborhood where new houses must conform to historic guidelines, but Sears Crosstown -- especially the tower section -- has its fans among preservationists. It was recently named one of the 10 most endangered historic buildings in Tennessee by the Tennessee Preservation Trust.
Bill Bullock, president of the Evergreen Historic District Association, notified his board last week that an application for redevelopment of the property has been filed.
"I spoke with Guy [Payne], and while specific details like which big-box anchors are being considered were not available to us, I was generally pleased with the outcome of our conversation," he said. He recommends that the Evergreen association support the redevelopment.
The prototype for possible renovation of Sears Crosstown is a similar Sears building in Boston near Fenway Park, which was renovated to include a movie theater, retail, and housing. The Memphis application includes before-and-after photographs of the atrium of Boston's Landmark Center.
Midtown is not exactly Boston, and North Watkins is a far cry from Fenway Park. Talk is cheap when it comes to Sears Crosstown or a long-rumored Target in Midtown. Without knowing any more about the prospective new owners and their financing and track record, the Land Use Control Board and Midtown neighbors are acting on faith and hope.
The Land Use Control Board makes recommendations to the Memphis City Council and Shelby County Commission, which have the final say. OPD planner Mary Baker said it is not unusual for the staff to have to act on incomplete information about prospective developers.
Our next item for auction, bidders, is a little slice of Memphis with a great location, nice cash flow, and lots of history. Who wants a piece of Beale Street?
Far-fetched? Maybe not. John Elkington, co-developer and manager of Beale Street for more than 20 years, says its time for the city of Memphis to sell it.
I believe that Beale Streets value is now at the highest level it will be for some time, Elkington wrote recently in a letter to Mayor Willie Herenton. We just completed the appraisal on the Westin Hotel garage which was $13.9 million. The appraisal was performed by one of the most conservative appraisers in Memphis, Walter Allen. Many of the assumptions that he used, with respect to land value, would apply to the buildings and land on Beale Street.
Elkington, chief executive officer of Performa a real estate management company which is itself a Beale Street tenant suggests that the city sell off individual buildings as opposed to selling the development as a whole. He would exclude Handy Park, the outdoor park and amphitheater featuring the statue of bluesman W.C. Handy. But he would include part of Church Park, east of FedExForum, and convert it to multi-family residential.
We have businesses like Alfreds and Rum Boogie that have been in the same location for 20 years, Elkington said in an interview. That says to me these tenants would be very interested in owning their own space.
Elkington said the city would get a badly needed payment, and the property would be put back on the tax rolls. Under city code, the city must auction property it wants to sell, conjuring up a vision of television cameras from across the country clustered at the courthouse steps as reporters say things like, A busted city auctions its soul. But Elkington says it doesnt have to be that way. Leases could be structured so that tenants would have first crack at properties. To set a benchmark, he suggests selling off the Terry Building at 203 Beale, home of Performa, Alfreds, Dyers, Wet Willies, and ESPN 730. The building should fetch $6 million to $8 million, Elkington estimates.
Most visitors to Beale Street probably dont know or care that the city owns the entertainment district. The recent history goes back to the early 1980s, when most of the current buildings were constructed and the street was repaved in an attempt to recreate some of the nightlife and excitement of Beale Street before urban renewal. Elkington was hired to manage it in 1982. He recalls a City Council member warning him in 1983, Dont come back, because we are not putting any more money down that rat hole.
Sandwiched between Peabody Place and FedExForum, Beale Street has only recently been in such fast company. In the early years of redevelopment, bars and restaurants came and went, and the streets neighbors were parking lots and vacant land.
Elkington said Beale Street businesses
have paid approximately $42 million in liquor and sales taxes since 1983 and
will gross roughly $40 million this year.
Selling Beale Street could be complicated. B.B. Kings Blues Club, Hard Rock Cafe, and Pat OBriens have separate deals with the city. The Beale Street Development Corporation, a separate entity that would make a title claim, has been at war with Herenton for years. Its original mission was to promote minority participation, but that role has been taken over by the Beale Street Merchants Association and Performa.
We are open-minded on what direction to go, but we have been overlooked by this administration, said Randle Catron, executive director of Beale Street Development Corporation and a candidate for Memphis mayor in 2003. I have no problems with John Elkington at all. Its the city administration that has ignored us.
Herentons administration inherited Beale Street leases and management agreements negotiated by his predecessors, mayors Dick Hackett and Wyeth Chandler and staff. Heretons spokeswoman, Gail Jones Carson, said he received Elkingtons letter but had no comment at this time.