Friday, July 30, 2004

Showing Up

Ready for "Hot Whips, Wheels & Babes"?

Posted By on Fri, Jul 30, 2004 at 4:00 AM

While some Memphians are still reeling from reports of the Crunk Fest melée at the Mid-South Coliseum a few weeks ago, promoter Larry Allen is readying the Mid-South Fairgrounds for "Hot Whips, Wheels & Babes," a car show and rap concert that will hit town Saturday, July 31st.

"Memphis is a great urban market," says Allen, undaunted by the negative media coverage that followed Crunk Fest. Allen is the CEO of the Birmingham, Alabama-based Rhino Agency, a marketing and promotions firm that has produced the Birmingham Heritage Festival for the last 13 years and represents the UniverSoul Circus, and he stresses that security is under control for the event.

"I go to all kinds of events, and I've seen a lot worse stuff happen at rock concerts than what supposedly occurred at Crunk Fest," Allen says. "Granted, the Crunk Fest promoters were young and might have been in over their heads, but I was there and I know what I saw. They did things by the book and provided all the security the location required."

Steve Fox, manager of the Mid-South Coliseum, agrees. "The media coverage on Crunk Fest got blown out of proportion," he says. "There were a couple of fights late into the performances, and security detained a few individuals. Outside, somebody got into a fight and was beat up. But it was a standard concert for us. There were no gunshots, major arrests, or drug issues.

"Sure, the audience was enthusiastic. That wasn't Perry Como onstage," Fox says, referring to Dirty South rappers the Ying Yang Twins, Trillville, and local hero Yo Gotti. "But it was really no different than a Widespread Panic or Korn [concert]. The wrestling crowd is the one I worry about. They do get violent," Fox says, only half-jokingly.

"We researched the other cities Allen has worked in," explains Randa Kahn, the general manager of American Park 'n Swap, which produces the flea market and special events at the fairgrounds. "They gave him rave reviews," Kahn says. "He's prepared this event thoroughly to make sure everybody will be safe and sound."

The event will have trophies and cash for the best cars, a bikini contest, and music from Three 6 Mafia and Criminal Manne, says Allen, who has already taken his car show on the road. "We did three cities last year. Birmingham, Montgomery, and Tallahassee," he says. "We have eight more shows planned for this year, including Nashville, Knoxville, and Little Rock."

Pointing to popular cable-TV shows like Pimp My Ride and Overhaulin', Allen says that in 2004, after-market sales for automobile parts are bigger than new or used car sales. "When you see a trend coming," he says, "you want to take advantage of it. We saw a growing need for people to express themselves with all the luxury stuff."

Does he buy into the bling-bling theory himself? "You don't really want to know what I drive," he protests. "I've got a '95 Mitsubishi Montero! But that doesn't really matter," he insists.

Allen's too wrapped up in the relationship between popular entertainment and corporate marketing to care about his own ride. "The entertainment industry is constantly changing, and it's the African-American population that continually sets the trends," he says. "Ten years ago, hip-hop was considered negative. Now it's controlling the clothing and music industries and affecting modern culture."

Because of the urban market's wide-ranging influence, corporations that traditionally spurned inner-city customers are now refocusing their attention. "You can't take this community for granted," Allen says. "African-American kids spend all kinds of money on wheels and rims, painting their cars, or fixing up the interiors with DVDs and other electronics. From a corporate perspective, putting on a car show is a great way of marketing to that particular demographic, which has traditionally been underground."

Allen hopes to draw a suburban audience as well. "We are primarily presenting "Hot Whips, Wheels & Babes" as an urban event," he says, naming local rap station Hot 107.1 FM as a major supporter. "But, by the time we do our show, we'll have as many white kids who want to enter their car in the competition.

"Memphis is a great entertainment city, and the numbers show that the trend for after-market [car-part] sales is already well established. It makes all the sense in the world for us to do "Hot Whips, Wheels & Babes" here," he says. "We want to come in and put on a great show and -- hopefully -- make this an annual event." n

"Hot Whips, Wheels & Babes" at the Mid-South Fairgrounds Saturday, July 31st, from 5 to 11 p.m. $20 admission; $50 to register for the car or bikini contests (registration fee includes admission).


Friday, July 2, 2004

[City Beat] Public or Private?

Out of office for almost two years, Jim Rout finds himself back in the spotlight.

Posted By on Fri, Jul 2, 2004 at 4:00 AM

For 24 years in county politics, including eight years as mayor, Jim Rout was an open book, as politicians go. Reporters calling him could often get him on the first or second ring, as I did this week. He would answer almost any question, personal or political. He's been out of office for almost two years but finds himself involved in a federal investigation of the county pension fund and a personal $25,000 investment he made.

Why now? Did the times change or did Rout change? Probably both. The Watergate effect met the wealth effect, and Rout may have a Martha Stewart problem.

The Watergate effect, as explained a few years ago by former federal prosecutor Mike Cody, was an offshoot of the Richard Nixon presidency. "Under-the-table practices of long-standing became the focus of investigation and criminal enforcement. The public and juries began holding politicians and public officials to a higher standard. Things were perceived as illegal that before had just been winked at."

In the '80s and '90s, the Watergate effect produced a string of federal prosecutions of public officials in Tennessee, including then-Congressman Harold Ford Sr. These days the feds' high-profile targets are corporate executives like Stewart and, in Memphis, former and possibly current county government officials.

The wealth effect was a product of the soaring stock market before the tech bubble burst in 2000. County government officials including Rout and his top assistant Tom Jones were intimately involved in several big-money deals including FedExForum, AutoZone Park, the aborted Grammy museum, and the Memphis Cook Convention Center. Many of the executives, consultants, underwriters, and attorneys involved in these projects make more than $1 million a year and get lucrative stock options. Public officials make $100,000 to $150,000 a year -- a good salary by most standards but not in this league. Many times Jones and Rout and their city counterparts would work long hours, shoulder-to-shoulder with the corporate crowd. Public participation was vital to the deals. The salary gap had to sting.

The fact that Rout invested $25,000 in a startup company shows he was not immune to the wealth effect. For that money in 1999, he could have bought stock in FedEx or AutoZone (and doubled or tripled his money today), but, like many investors, he was dazzled by the long chance. He was, at the least, unwise to get his investment back before the company went bankrupt. Like Stewart, he should have taken the loss. Making matters worse, the company was in the portfolio of Delta Capital Management, one of 12 managers hired by Rout and others to invest the $786 million county pension fund. Rout was interviewed by federal investigators in March. On July 7th, David Pontius, the county employee who administers the pension fund, will meet with a federal grand jury. He said he expects to be asked about Rout and Delta Capital.

Rout has pushed the ethical envelope before. In his last year as mayor, he traveled to Australia with his wife Sandi, insisting the trip was strictly business. He once suggested his wife's travel expenses were legitimate public costs because she was the "first lady." He later reimbursed the county for some of her expenses by drawing from his campaign fund.

No local politician can avoid ties to local businessmen, but Rout's are closer and more personal than most. He owes his last two private-sector jobs to political benefactors. He is currently president of Jack Morris Auto Glass. Morris was a major fund-raiser for Rout as well as current Shelby County mayor A C Wharton. Before he became mayor in 1994, Rout was president of Behavioral Health Group. His benefactor was Dr. William H. Rachels, a wheeler-dealer in health-care companies, Memphis politics, and real estate. Rachels, finance chairman for Winfield Dunn's successful Tennessee gubernatorial race in 1970, was chairman of Health Industries of America when it spun off Behavioral Health Group in 1988. Rachels hired Rout to run it.

From 1988 until 1992, 39 percent of Behavioral Health Group was owned by Stephens Holding Company, a Little Rock-based financial conglomerate. A subsidiary, Stephens Capital Management, was hired by Shelby County to help manage the pension fund. Rout, a county commissioner at the time, was a member of the investment committee which made the recommendation. Some county employees and local stockbrokers publicly questioned the appearance of favoritism and the high-risk stocks that were Stephens' specialty, but their objections were overcome.

When he became mayor, Rout sold Behavioral Health Group to Stephen Winters, owner of Medshares, a home-health-care company across the street on Union Avenue Extended. By then Rout was the sole stockholder. He wouldn't disclose terms of the sale.

All of this was reported by the local press, but the issues never got traction. Then.

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