Thursday, March 4, 2010

Tourist Traps

Investing in tourism might look like a no-brainer, but it's not.

Posted By on Thu, Mar 4, 2010 at 4:00 AM

Tourism itself may not be recession proof, but the lure of entertainment districts, convention centers, and sports facilities as visitor magnets is as irresistible as free beer.

Two years after former mayor Willie Herenton proposed one, a new downtown convention center is creeping back into the news. So is Beale Street, thanks to a fresh audit of John Elkington and Performa Entertainment. And so is the fairgrounds, which was the subject of a Memphis City Council committee meeting last week.

Tourism harnesses the power of other people's money, not to mention the Food Network and the Discovery Channel. It plays to our strengths. The payoff is packed hotels and restaurants. An economic stimulus package that works. Fun for everyone.

There's big money and upside in tourism, but there are a lot of traps too.

Trap one: What's your niche? Scott Robinson is head coach of the Germantown swim team. He and 1,500 coaches, parents, and swimmers from Tennessee, Alabama, and the Florida Panhandle spent four days in Nashville last week at the short-course championships. The city-owned Centennial Sportsplex has an aquatic center that works for them (as well as an ice-skating rink and indoor/outdoor tennis courts).

"Pools here in Memphis don't have the capacity to handle that many people in one meet," Robinson said. "To keep the meet within a reasonable time frame, they use two pools. We have pools that size here with movable bulkheads, but they can't handle the spectators."

It took three-and-a-half days to run all the events. That's four hotel nights if you're keeping score. The meet was the fourth one in four weeks in Nashville. Make that 16 hotel nights. The University of Memphis used to host a long-course meet but stopped bidding on it five years ago.

The heavy hitters in the Memphis fairgrounds discussions are the tenants of the football stadium. That leaves 355 non-football days a year. What would you put at the fairgrounds that the Mike Rose Soccer Complex, First Horizon baseball fields, and the Racquet Club of Memphis don't already offer?

Trap two: Tourism is not a solution to a budget crisis. Because of special districts and financing arrangements, tourism taxes pay the debt on stadiums and arenas and convention facilities and promote more tourism. The plans for the fairgrounds, Graceland, and the Bass Pro Pyramid all envision keeping the "tax increment" inside the special district. Money for schools and police and trash pickup comes from unrestricted taxes.

Trap three: Tourism draws cities into an arms race with their neighbors to build new convention centers. Nashville is a heavyweight with a firm base in the vibrant country music industry. Memphis is a middleweight with one foot in the musical past, a bipolar downtown with the convention center and the Pyramid at one end and the Peabody, Beale Street, and FedExForum at the other end, and a history of squandering money on white elephants.

Trap four: gentrification. Lower Broadway in Nashville looked like it was hosting a Chi Omega sorority convention last Saturday. We ate grilled bologna sandwiches and drank Pabst Blue Ribbon at Robert's honky-tonk and saw Alison Krauss at the Ryman Auditorium, but the pitfalls of progress were obvious too. From hamburgers at Earnestine and Hazel's on South Main to Beale Street blues to Harry Connick at the Cannon Center, Memphis more than held its own.

Trap five: Tourism and entertainment is not enough. A downtown needs a business base. New Orleans is in the same boat as Memphis. Nashville has new skyscrapers and corporate headquarters and the state capitol. The main reason we were in Nashville several times recently was work and a nice payday. The fun was a bonus. Memphis business consultant Don Hutson tells his audiences to move toward abundance and away from scarcity. Nashville still has an abundance of abundance.

Trap six: The back-story doesn't matter to visitors, but it does matter to the city. Elkington and the Beale Street club owners deserve credit for turning nothing in 1982 into something today. They do not deserve an exclusive call on profits for eternity. The Watkins Uiberall audit addresses past claims that may or may not be worth pursuing, not political shenanigans and corruption. The city, which provides services, should legitimately expect lease payments. Casinos pay 12 percent in state and local taxes in Mississippi, and that's one of the smaller cuts in a capital-intensive industry that generates a lot of cash.


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