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.