Memphis Council approves taxpayer-backed investment in convention project; Mayor is not so sure
Beale Street in Memphis with few tourists out and about. (Photo: Karen Pulfer Focht)
After heated debate, the Memphis City Council passed a resolution agreeing to invest $200 million into the One Beale development — and back 100% of bonds incurred to pay for the project — in an effort to attract conventions to the city.
But the administration of Memphis Mayor Jim Strickland was reluctant to agree, leaving the project in jeopardy.
Members of the City Council spent two hours Thursday debating the One Beale development, a controversial plan to renovate the Renasant Convention Center. While some said the agreement would lead to economic prosperity for the city, others saw the deal as a risky investment that could ultimately fall to taxpayers over the next 30 years, including interest, should developers be unable to recoup their costs.
The resolution was initially deferred from Tuesday’s city council meeting, during which Tennessee Comptroller Jason Mumpower expressed concerns about the city agreeing to back the development’s debt through bonds, which will be sold and expected to contribute $16 million to lower the city’s risk.
The One Beale development would include the construction of the Grand Hyatt Hotel, a 350-room hotel to service the Renasant Convention Center. In all, the One Beale project seeks to create three hotels with more than 700 new hotel rooms.
On Tuesday, project developer Chance Carlisle, who is the brother of Memphis Councilmember Chase Carlisle, told the Council that without the city agreeing to a 100% backstop, the development was in jeopardy.
The One Beale project received mixed support from city officials.
Chairwoman Jamita Swearengen praised the project, which is backed by 47 Black American investors.
“This is the first project that I’ve seen of this magnitude that involved this many African- Americans, and it makes me so proud,” she said, adding that Memphis has not experienced economic success like Nashville because of few business opportunities available for the majority-minority city residents.
“We want you all to stay in the city of Memphis. We want you to continue to invest in the city of Memphis, and we want you to remain in the city of Memphis,” she added.
“The return is the existence of that project and the benefit that project provides to the economy and our community,” said Councilmember Worth Morgan.
The resolution passed with the understanding that Carlisle and the Strickland administration would continue to negotiate.
A spokesperson for the Memphis mayor, Jim Strickland, said they would withhold finalizing details until they learn how the debt could affect the city’s bond rating.
Earlier this year, the city agreed to back 50% of the debt. The city’s chief financial officer, Shirley Ford, expressed concern about the city’s long-term economic power should they backstop 100% of the bonds
The Strickland administration City officials plan on meeting with Mumpower and Carlisle to continue negotiations.
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