Tuesday, July 30, 2013

Not Looking Up

Is the high-rise downtown office building obsolete?

Posted By on Tue, Jul 30, 2013 at 2:09 PM

The Memphis skyline looks great in those golden-hued pictures taken from the other side of the Mississippi River or in an aerial shot taken at night when the lights are on at AutoZone Park.

The trouble is that several prominent buildings from the Pyramid to the South Bluffs are empty or emptying out. The skyline shot is a bit of a fake.

The 100 North Main Building is the tallest building in Memphis. By our standards, it is a skyscraper. The view from the 34th floor looks down on Civic Center Plaza, the Marriott Hotel, the convention center, and the Pyramid, where Bass Pro Shops has plans for an observation deck and restaurant at the apex.

But the 1965 office building with more than 400,000 feet of space is sparsely occupied, mostly by lawyers who work at the courts. The lobby is barren except for a concession stand and a few parched potted ficus trees. The escalators don't run, and the elevators run so infrequently that some tenants worry about access to the upper floors in an emergency. There are no tenants at street level. The revolving restaurant on the roof is long gone, along with the Union Planters Bank sign (the bank was never a tenant) that gave the illusion of occupancy.

Building manager John Freeman declined to talk about any deal that might be in the works to sell the building, which was on the market for $20 million in 2006, but said he might have news in August. The owner lives in California and could not be reached for comment. Paul Morris, president of the Downtown Memphis Commission located across the street, said tenants are being notified that their leases will not be renewed. "The building has been neglected over the years and desperately needs improvements," he said.

Reinventing a building that was as bland as its name in its best years "is a tough one." Suggestions include a combination hotel, condo, and apartment building.

"The best market now in downtown is multi-family apartments," Morris said. "But that is a huge building. I don't think it would be profitable or cost effective to turn it into apartments. The proximity to the convention center helps. We need more hotel rooms. That is a possibility."

Chuck Pinkowski, a consultant to the hospitality industry, has spoken to the owner and is not optimistic.

"It would be very expensive to retrofit it," he said.

Job sprawl and office blight have taken a huge toll on downtown. It is more than likely that, within a year or two, Civic Center Plaza will be bracketed by two empty office buildings. The 12-story state office building on the north side of the plaza has been declared obsolete in a state report, and its 900 workers will be moving, possibly to another downtown building.

Nearby, the owners of the Lincoln American Tower and Court Square Properties have said they are facing foreclosure without extended tax breaks. Raymond James is laying off hundreds of employees and shopping for space in East Memphis to use in negotiations when its lease runs out at 50 Front Street next year. One Commerce Square lost its main tenant, Pinnacle Airlines. The Sterick Building next to AutoZone Park has been vacant for 25 years and, like other abandoned buildings, is not counted as leasable space in the reports that put downtown office occupancy at 84 percent.

"I don't think the theory of an office tower is obsolete," Morris said, citing the positive stories of AutoZone and First Tennessee, both of which own and occupy their buildings. "I have not gotten any credible information that Raymond James has made a decision. The advantage downtown has is that market rates are less. But the downtown office market is very weak, in contrast to the downtown residential and entertainment markets, which are doing very well."

Indeed, the signs of new development can be seen this summer south of the train station and along the future path of the Harahan Bridge bicycle and pedestrian trail. Developer Henry Turley has cleared several acres for apartments and has been goading other property owners and the city to improve cleanliness, lighting, and safety so that visitors "wouldn't think the city died in 1945."

If you look out instead of up, things are looking up.

Tuesday, July 23, 2013

Brains, Money, & Football

Rhodes College A.D. looks at the world of big-time football.

Posted By on Tue, Jul 23, 2013 at 2:17 PM

Rhodes College versus the University of Tennessee in football? Not a chance, but the idea of a small liberal arts college playing a Southeastern Conference powerhouse is not far-fetched.

Last year, Wofford College, an academic powerhouse in South Carolina, with 1,549 students, played SEC bully South Carolina, coached by Steve Spurrier, and lost 24-7. This year, Samford University in Birmingham, with 2,750 students, will play Arkansas.

Granted, there's a special factor in each case. Wofford's big donor is alumnus Jerry Richardson, a former NFL player and owner of the Carolina Panthers. And Samford is in Alabama, cradle of SEC football and home of the annual "Media Days" lollapalooza in which a thousand or so sportswriters compete to find the most trivia.

But when I saw the new light poles on the almost-new artificial-turf field at NCAA Division III Rhodes, I called athletic director Mike Clary just to see what's up. "I've been associated with this college for 39 of the last 41 years and have never entertained any thought of playing at any other level," he said. "Doing something that would be more expensive and more of a cultural change from our academic and athletic balance is just not something we would ever do."

Mike Clary
  • Mike Clary

That doesn't mean Rhodes (1,808 students) and other members of the Southern Athletic Association are isolated from changes in the college football universe. The Rhodes 2013 schedule includes the University of Chicago, whose football claim to fame is winning the 1905 national championship and giving up the sport in 1939. Also on the schedule are Claremont-Mudd-Scripps in California; Berry College and Hendrix College, which will be fielding teams for the first time; and Birmingham-Southern, which pulled a Chicago in 1939 and brought back football in 2007. Off the schedule is Colorado College, which dropped football in 2009.

What the schools have in common is no athletic scholarships and the ability to make the claim that their average SAT score is larger than their enrollment.

Here are excerpts of my interview with Clary. Lest anyone think he was talking out of school, data on athletic department budgets is public information at http://ope.ed.gov/athletics/.

How did Chicago get on the schedule?
Mike Clary: Chicago and Washington University in St. Louis compete in all sports and struggled the last seven or eight years to get a schedule because so many Division III schools belong to a league. We accepted Chicago as an affiliate football member in 2015 and play them at home this year and away in 2014.

Why Claremont and the travel expense?
We struggled with this. In our old conference, we had to fly to San Antonio to play Trinity every other year. With them off the schedule, we can use those funds to fly to California to play Claremont and Pomona in 2014. With 75 people at $450 a ticket, it's about $32,000.

Why the lights on the field?
As our enrollment has increased, we have more afternoon and evening classes. Lights minimize conflicts with classes and science labs. We had been asking donors for several years and finally were able to get a gift. The cost was about $350,000. They will mainly be used for practices when time changes in late October. In the future, we will probably play Claremont at night, since they have to stay over. Normally, schools at our level don't play at night because they drive to games and if the game is over at 10 o'clock, they don't get home until the next morning.

What do you think about small schools playing big ones?
Every year, I hear from someone at those smaller schools asking about our budget. In a perfect world, they would like to be more like Rhodes, but the external pressure is just astronomical. Wofford has about 100 players, and tuition and expenses are about the same as here. Our average grant for our 100 football players is around $15,000, whether academic or need-based. So we're spending about $1.6 million.

(Note: According to public reports for 2011-2012, Rhodes spent $454,000 on football, Wofford $3.6 million, Samford $5 million, the University of Memphis $13 million, and the University of Tennessee $19.8 million.)

Is football necessary to attract male students?
Of our 550 first-year students, 200 will be varsity athletes, including 55 football players. We could recruit our student body if we didn't have football, but we like the dynamic it brings to the Rhodes community.

Tuesday, July 16, 2013

The Power of a Penny

Warning: This column contains mathematical calculations.

Posted By on Tue, Jul 16, 2013 at 3:21 PM

A penny in your pocket or purse is trash. A penny on the sales tax or property tax rate or at the gas pump or in a slot machine is treasure.

Big treasure. Pennies have never been in the news more than they are now. The reason, of course, is that the penny figures into the taxes that fund the new Unified Shelby County School System, the city budget, and the county budget. Reporters and elected officials have pennies on the brain, and never mind that the fastest way to lose readers and voters is to make them do arithmetic.

Truth in advertising would compel us to label stories "contains math" the way gas pumps say "contains ethanol."

Which is as good a place as any to start. Gas prices are going up this summer because that is what gas prices do in the summer. There is no reasonable explanation, it just is, like rising temperatures and headlines that say "pain at the pump."

If one gas station is selling regular for $3.35 a gallon and the one across the street is selling it for $3.36, the savings on a 20-gallon fill-up is 20 cents. Drive around Memphis a bit and you can probably find price variations of 20 cents or more, which works out to saving a few bucks each fill-up and a few hundred bucks a year.

The sales tax in Memphis is 9.25 percent. Some city council members want to raise it to 9.75 percent, matching the new rate in the Shelby County suburbs. The proposed increase, which was defeated in a referendum last year, would cost consumers $5 on every $1,000 worth of purchases.

Call it a sandwich or a lottery ticket worth of added expense, but don't bet your pennies on the referendum passing if it gets that far. If it did pass, it would raise more than $40 million in Memphis. The add-on in the suburbs is enough to satisfy the legal requirement for funding municipal schools.

The Memphis City Council met Tuesday to clarify the impact of a penny — actually only a fraction of a penny — on the $3.40 cent property tax rate. Finance director Brian Collins told them the city gets $1,052,000 for each penny on the tax rate. From a property owner's point of view, a penny on the city tax rate on a house appraised at $100,000 is $2.50. Call that a cup of coffee and a donut. The council has been meeting for months to try to set the tax rate, going through entire kegs of coffee, as has the Shelby County Commission, which still has not finished the job.

We watch our pennies at the grocery store, one of the few places where the jar of pennies and coins on your dresser is worth anything. The Coinstar machines charge a 9.8 percent "processing fee" to convert them to cash or grocery credits. A sack of 1,000 pennies buys about $9 worth of groceries. The truth is that I would pay 20 percent or even 30 percent to get rid of them. My bank won't even take them, preferring to impose fees of $1 or more at every opportunity.

Nowhere has the penny exerted greater power than at the Mississippi casinos. When the casinos came in 20 years ago, the cheapest slots accepted nickels, and the places that installed such machines were derided for catering to poor people.

But a few years ago, coins and plastic coin buckets and the sound of silver dollars clattering into a metal tray beneath blinking lights and whining sirens disappeared. Coins were replaced by bill acceptors, and the penny slot machine became the most popular game in the casino. You don't actually drop in a penny at a time, but you can play a penny at a time or several dollars worth at a time. Pick your poison. Speaking from experience, the thrill is not all that different, considering that I play Vegas solitaire on my computer for nothing.

According to Mississippi Gaming Commission reports, there are 21,090 penny slots in the state. There are only 62 slots that play $50 at a time and exactly one $500 slot machine.

The amount of "coin in" wagered on penny slots in the month of May this year was just over $1,202,000,000.

If you want to know how many pennies that is, and I know you do, we must resort to the language of astronomers. The answer is more than 120 billion, or 120,200,000,000 pennies. Enough to support nine casinos in Tunica County and 31 in the state of Mississippi or build a stack of pennies halfway to the moon.

Wednesday, July 10, 2013

No More Parking Meters!

Free parking would give downtowners a break and boost business.

Posted By on Wed, Jul 10, 2013 at 9:33 AM

If you think phone companies, pay-day lenders, and airlines are bad about hidden fees and add-ons, wait until you see how Memphis city government plans to gouge citizens for more bucks.

For want of a nickel to stick in a parking meter, violators face more than $200 in fines and court costs, plus a mark on their driving record that could boost their insurance rates. Either that or they can spend half a day and take their chances in Ticket Hell, otherwise known as the courtrooms in the basement of 201 Poplar.

Parking meters are a vestige of the days when downtown really was the "central business district" of Memphis and home of the headquarters of three banks, a brokerage firm, and law firms, retailers, and professional offices that have since moved away. With the exception of the University of Memphis, your chances of getting a parking ticket anywhere else in Shelby County are nil. When I called suburban officials to ask if they had meters, I might as well have been asking if they had brothels or casinos.

"No, and the likelihood of having them in the future is slim to none," said Germantown city administrator Patrick Lawton.

Metering downtown is wildly inconsistent. In addition to the broken ones, there are no meters on most of Front Street and Main Street south of Beale or north of the convention center and none in HarborTown on Mud Island. Eat lunch meter-free at Gus's Fried Chicken on Front, but bring some change and keep an eye on your watch if you eat at Lenny's a few blocks away.

The revenue-hungry Memphis City Council and the Wharton administration's response to this is to add more meters in more places and jack up fines. A $21 ticket (it was $5 back in 1996) has to be paid within 15 days to avoid Ticket Hell. Contesting a ticket means going to court, where the ticketing officer's appearance is mandatory — a double waste of time better spent. Otherwise, the violator is hit with a judgment of $186.75 in additional fines and court costs. No-shows get a mark on their license.

So, just pay the ticket within 15 days? Easy to say for those who don't share a car with family members, use a car to get around downtown for work, or know the frustration of jammed meters, parking outside the lines, insufficient change, and coping with the pedestrian and trolley mall and tell-it-to-the-judge police officers.

We are targets of opportunity. And if new meters that accept credit cards are installed, it won't be long before hourly rates are raised, hours of operation are increased from the current 8 a.m. to 6 p.m. Monday through Friday, and more personnel are assigned to enforcement. The brunt of this hidden tax will be borne by citizens and visitors who patronize downtown, where some muggers carry weapons and others carry ticket books.

City Court clerk Tom Long was more sympathetic than defensive when I met with him Monday to get an explanation. Long, who has been in office for 18 years, says he is whipsawed by the state legislature and the council telling him how to do his job.

"They are looking for revenue any way they can get it," he said. "What's going to happen is people are not going to come downtown."

Long's office collects one third of fines within one year and two thirds within five years. He keeps a "Top 100" list of violators who owe $577 to $2,111 each in back tickets. Until this year, tickets were "abated" (forgiven) and purged from the system after one year.

"Our collection rate was higher before the media publicized that," he said. "As of this January 13th, no tickets are abated."

City council members, led by Councilman Bill Boyd, have zeroed in on uncollected fines and see a revenue windfall of more than a million dollars a year. This is the same council that couldn't find seven votes to crack down on tax breaks for corporations and developers. Boyd knows better than anyone how much property tax is abated, because he used to be the Shelby County assessor. He could not be reached for comment.

Downtown Memphis is not downtown Chicago or Nashville or some other city with tall buildings and actual tenants. Its pockets of prosperity are offset by blocks of blight. Businesses that choose to locate in downtown get a tax break in hopes that they'll generate sales taxes and jobs. Individuals deserve a small break too.

Tuesday, July 2, 2013

“A Perfect Little Bowl”

Concerts drive Levitt Shell and Overton Park to new milestones.

Posted By on Tue, Jul 2, 2013 at 3:58 PM

An hour or two before sunset, the cooler caravan heads to the early-bird special in Overton Park. They tote blankets, folding chairs, and small children. Their destination is one of the summer concerts at the Levitt Shell.

In its fifth post-renovation season, the Shell is on course to set an attendance record, with 30 free summer concerts. There are six of them in July, concluding with the Recording Academy Memphis Chapter’s 40th anniversary concert on July 13th — the same night Robert Plant will play the Memphis Botanic Garden, where lawn tickets are $45, and the St. Jude Benefit Show, “Stage Dive To Save Lives,” is at Minglewood Hall. More than 63,000 people have come to Shell concerts this year, compared to 46,275 at this time last year, said executive director Anne Pitts.

“It’s word of mouth over the last couple of years,” she said. “People are coming to the Shell not even knowing who is playing, just for the experience and time spent with family and friends. It’s become more of a lifestyle as opposed to a music venue.”

The numbers are a calculated guess. Volunteers divide the field into quadrants and count their area several times. The all-time record was set this year when 5,800 people came to see the season opener with the North Mississippi Allstars.

Pitts says that could be broken at the season-ender, when the Allstars return with Bobby Rush, Al Kapone, the Hi Rhythm Section, and several other groups. After that, Indie Memphis will present six concert films from July 18th to August 24th featuring the Rolling Stones, Paul McCartney, the Doors, Queen, and the first public showing of a new film about Big Star.

“We have built up a reputation for the kind of production we have,” Pitts said. “Artists are familiar with the show and venue, and a lot of them are calling us now. We are not able to pay as much as another venue they might play at and tend get a little bit of a deal, or grab an artist when they’re between other cities.”

Last Saturday, the Memphis Dawls performed a nostalgic USO-style show with the Memphis Doctors Band before more than 4,000 people. It was the biggest Memphis crowd ever for the three 2001 Cordova High School graduates who regularly play for “the door” before 50 to 100 people at Otherlands and other small venues. “We go for it no matter how big the crowd is, but that huge crowd on the lawn was really exciting. That was our record-breaker,” said Jana Misener, cellist and part-time barista. The next day, the Dawls had 100 more “likes” on Facebook. Built in 1936 and threatened with destruction the 1960s and 1970s, the Shell, like the park, now has an embarrassment of riches — a marketing machine, dozens of corporate sponsors plus event-night donations, the namesake Levitt Foundation that supplies 16 percent of the operating budget, and a 2008 renovation that, among other things, replaced concrete benches with grass.

“Our Levitt Shell has become the flagship because it worked so well,” said Lee Askew of Askew Nixon Ferguson Architects. “It’s a perfect little bowl. The dark side, if there is one, is that it becomes so successful that it gridlocks the park when there are two or more blockbuster events in the park at the same time.” Pitts said it’s a nice problem to have but still a problem that will require cooperation between the Overton Park Conservancy, Brooks Museum, the zoo, the Memphis College of Art, and the neighbors.

“The concerts have been great for neighbors being able to walk to them,” said Rob Clark, president of the Evergreen Historic District Association, west of the park. He said complaints involve parking, the lack of crosswalks, and litter — mainly on Tuesdays, which is free day at the zoo. There has been talk for years of building a parking garage, but “I don’t know where they would put it,” said Clark, who met with zoo officials this week. “With growth and popularity, you have to manage the negative that comes with it,” he said. “If Sears Crosstown is developed, we would see a whole bunch more traffic.”

Askew, whose house borders the west side of the park, is confident the various interests will get it right eventually. “When I moved here in 1985, people were changing their oil in the park,” he said. “The park is at an all-time high-water mark.”

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