Developer Jack Belz emailed a memorandum to City Council and RDC President Benny Lendermon, expressing his reservations about the Promenade Land Use Plan. Here is the text of the memo. (Lendermon's response is reproduced at this link.)
M E M O R A N D U M
DATE: April 26, 2004
TO: Memphis City Council
FROM: Jack Belz, Ron Belz, John Dudas
RE: Response to Benny Lendermon’s e-mail - 4/21/04: Memphis Promenade Public Realm Plan
We support the relocation of the parking garages below the Front Street grade, the construction of pedestrian bridges over Monroe and other appropriate streets, the relocation of the fire station and the adaptive reuse of the Post Office for a major public purpose like the Law School. We would like to see the development of an attractive "esplanade" along the river side of the promenade area. We would even support a limited amount of low-rise structures along the west side of Front which would contain public and possibly residential uses.
We oppose the construction of high rise structures on the west side of Front Street, which are suggested in the Cooper-Robertson plan, for the following reasons:
1. These structures would block the view of already existing properties on the east side of Front, many of which are substantially vacant and in need of new users and rehabilitation.
2. The amount of parking that would be required for new high rise construction on the west side of Front and to accommodate the existing demand for parking from occupied and unoccupied space east of Front St. would require above ground parking structures which would defeat the purpose of relocating the existing parking underground. The amount of parking spaces available for the existing properties east of Front must not be reduced or the revitalization of that area will be jeopardized.
3. The promenade and other aspects of the riverfront should primarily serve as an amenity for the developed portions of downtown and the city in general.
There is adequate vacant property east of Front to accommodate all of the commercial development which the market could absorb for at least 50 years. (If a major corporation agreed to move its headquarters to downtown Memphis only on the condition that it be allowed to develop west of Front, then this could justify considering whether to allow a building in the promenade area. A speculative office building, hotel or other non-single-user facility would not justify building west of Front). The objective of the riverfront development should not be to develop a parallel downtown but rather to provide the environment and amenities to facilitate the optimum development of the existing downtown properties.
In terms of the financing of the proposed promenade public improvements, this area should be treated as any other public project and financed in the same way as a park, or public parking garage or plaza is financed. For example, Downtown property owners have been paying a special assessment on their property for almost 30 years in order to fund Main Street and other projects through the Center City Commission. Tax Increment Financing (“TIF”) is being used in Uptown and another district has been proposed for the balance of downtown in order to finance public improvements. The TIF revenues would result from the new development and renovation activities which would take place in downtown including Mud Island, the Bio Tech area and other areas within the CBID. Transferring development and rehabilitation activities from the currently built up areas of downtown to a new publicly created land area, which admittedly would have fewer obstacles for construction than the built up areas in order to create a limited amount of tax (land lease) value to fund public improvements, would retard the revitalization of Main St., 2nd St., Union etc.
The riverfront public improvements should compete on the priority list with public improvements needed in the already developed portions of downtown. It is misleading to imply that there will be no cost to the community if the promenade land was leased to private interests to build something that should be built in the already developed areas of downtown in order to fund a portion of the riverfront public improvements. If potential users are transferred from the currently developed portions of downtown to the promenade then the existing non-utilized properties will remain below their optimum value longer, which will cause blight on the surrounding properties and reduce the value and productivity of those properties. We will, in fact, be sacrificing the area east of Front for a new town west of Front.
It is also misleading to suggest that the approximate $50 million of cost, which has been floating around as an estimate associated with the promenade projects, can be financed by private development on the promenade. A $50 million bond issue would require approximately $4 million per year of revenue to amortize the debt service on the bond issue. It is unlikely that private interests could justify paying $4 million per year in land costs for the limited amount of property available on the Promenade.
Consequently, a substantial portion of the revenues for the debt service on the public improvements to the promenade would need to come from the City-wide property taxes or some other public source of funds. The proposal does not have reasonable certainty and no protection for the taxpayers that it will not simply become a transfer of this asset to private interests who are around to reap the benefits of a failed financial plan. In other words, this action could retard the revitalization of the currently developed portions of downtown and turn over a large portion of the public space overlooking the waterfront to private interests in order to raise a relatively small amount of funds for these improvements. The financing assumptions need reevaluation before the City adopts a plan based on this thesis.
Our community has only one front door and that is downtown. Our downtown has only one riverfront. The public promenade set aside by our founding fathers is the only publicly owned property on our city's high bluff that will ever exist. We must not let short term pressures override the long term best interest of our community.