Friday, May 14, 2004

Public promenade vote looms amid growing dissension

Memphis Business Journal
By Amos Maki

The plan for transforming a four-block area Downtown known as the public promenade is in a crucial phase. A public hearing before the City Council is scheduled for May 18.

Critics and supporters of the $50 million redevelopment plan that would be paid for by private development are gearing up for what could be a bitter fight.

"We feel like we are presenting the appropriate plan for the city of Memphis and hope our elected officials will endorse it," says RDC president Benny Lendermon. "It is providing access to a property that is inaccessible now and it's providing an experience that doesn't exist in

Memphis that exists in cities all over the world on their waterfronts."

Some local developers instrumental in the rebirth of Downtown are as far apart on the plan as the banks of the Mississippi River at Memphis.

In a memo obtained by Memphis Business Journal that was sent April 26 to Lendermon, Belz Enterprises chairman and CEO Jack Belz, along with company vice presidents Ron Belz and John Dudas, express deep concern about the plan.

"Our community has only one front door and that is Downtown," the memo says. "Our Downtown only has 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."

Private developments, including three proposed new buildings, would pay for projects like a two-level promenade and the relocation of parking garages underground. The buildings would be mixed-use, with restaurants and shops lining the bottom floors. Ground leases would keep the property under the control of the city. The plan also calls for pedestrian bridges that would stretch across Monroe and Court and for improvements to sidewalks on the promenade. Grand staircases would provide access to the upper level of the pedestrian walkways.

The property now contains the old Cossitt Library, a fire station, the old Custom House and Confederate Park. The land is virtually inaccessible to most of the public and offers prime views of the river.

But there is some skepticism about the projected height of two of the three buildings proposed in the promenade plan. The plan says the property would be able to sustain a 300-foot residential tower where the fire station and an All-Right parking garage now sit and a 400-foot office tower north of Confederate Park, between Jefferson and Adams. Those are maximum heights the buildings could reach.

The Belz memo also states that it is "misleading" for the RDC to imply there will be no cost to the public for the plan and that private developers would be able to foot the bill for the $50 million price tag.

"A $50 million bond issue would require approximately $4 million per year of revenue to amortize the debt service on the bond issue," the memo states. "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."

The memo says the plan does not protect taxpayers and could harm restorative efforts under way in the rest of Downtown.

"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," it states. "The financing assumptions need re-evaluation before the city adopts a plan based on this thesis."

Belz Enterprises owns Peabody Place, the 2 million-plus-square-foot retail and entertainment center near Beale Street, and the company has been a primary influence in revitalizing Downtown.

In his reply, Lendermon says an alternate plan calling for the promenade to be turned into a park proposed by a group called Friends For Our Riverfront "generates no revenue and the RDC Plan generates significant revenues that reduce the burden on the taxpayer." Plus, the removal of what is currently there, "no matter what you put back is very costly -- $50 million." The memo goes on to say "the cost of putting a park on the site, public open space around mixed used developments as we suggest, or even converting it to a soybean field are all in the $50 million cost range due to the previously mentioned cost of removing existing infrastructure."

FFOR officials claim their plan will cost only $7 million.

Other important members of the development community, while not endorsing the RDC promenade plan outright, have been far less critical and generally supportive.

"I think we have an opportunity, and in fact an obligation, to get right on it and improve that area," says Henry Turley, principal of Henry Turley Co. "I would be embarrassed if I finished my career and the riverfront looks as shabby as it does now, with parking garages and abandoned libraries and neglected parks. So, I'm for doing things and not leaving things alone. I, by the way, own as much property as anyone on the east side of Front Street. "

Turley previously has expressed some reservations about the heights of the buildings, saying he doesn't believe the economy is dynamic enough to support them. But other concerns voiced by critics, particularly about blocked views, were acceptable to Turley.

"If I had to give up 20 degrees of my view by way of a new and taller building that gives vitality and a more continuous link to the river, I would gladly give it up," he says.

Jay Buckley, vice president and asset manager for Parkway Properties, the company that owns Morgan Keegan Tower and the Falls Building on Front Street, says his company favors the plan, although the proposed office tower would restrict some views of the river.

"We value the views we have as much as anybody on Front Street and we know that it means a lot to our customers," he says. "But it would be a fairly small price to pay to lose a sliver of a river view and gain what is likely to result from the promenade development."

City Councilman and RDC board member Rickey Peete will vote in favor of the redevelopment, saying the plan is viable and that it could do great things for the city.

"I think it can be profitable and improve public access to the promenade," he says. "And it will give the city an opportunity to improve its skyline."

Peete says he understands that some people have concerns about the plan.

"We try to do what is best for the city and sometimes you can't make everybody happy," he says. "I just think this is the best thing for the city of Memphis."

City councilman Carol Chumney says that if she had to vote up or down on the plan Tuesday, she would vote no.

"I can't vote for it the way it is," she says. "There are parts of the plan I can support and there are parts that I cannot support."

Chumney would like to see some cooperation between the RDC and FFOR. She says the council could delay action on the plan and ask the two sides to work out a compromise.

"It is too important an issue to say you've got to do this or forget it," Chumney says. "Whatever happens on the riverfront, we are all going to have to live with it for the next 50 years."

Jeff Sanford, president of the Center City Commission, says it is difficult to judge exactly how the proposed promenade developments would affect redevelopment in other parts of Downtown. Sanford is an ex-officio member of the RDC board.

"Redevelopment of Downtown is far too complex to conclude categorically that development in one area will hinder development in another area," he says. "In some sense, redeveloping the riverfront into an attractive, bustling area could actually enhance our ability to attract redevelopment in other areas of Downtown."

Sanford says the market, not the RDC or FFOR, will determine what gets built Downtown.

Some members of the CCC's affiliated boards met with officials from the RDC and FFOR May 6 to review each plan. The FFOR presentation seemed to hit a snag when members of the group were unable to say how they could fund their plan or how they would replace parking spaces that would be lost. Commissioners, however, asked tough questions of each group and seemed to favor a middle ground.

But Rick Masson, RDC board member and former longtime member of Memphis Mayor Willie Herenton's administration, was emphatic in his opinion that it is now or never for the promenade area.

"I honestly don't feel anything will be done" if the RDC plan is not approved by the council, Masson says. "It is going to stay the same way. I guarantee you."

Masson says a park would be an "impediment instead of an enticement" to getting people Downtown and he says that "in terms of making the river part of our lives, there is nothing" in the FFOR plan. Plus, he says, there is plenty of park space Downtown now.

According to the CCC, there are at least 300 acres of parkland in Downtown Memphis.
John Stokes, RDC board chairman, agrees with Masson and says this is do or die time for the promenade.

"I think if they don't adopt some form or fashion of our plan, I am firmly convinced it will sit dormant," he says. "That has been the history of the property for 50 years."

Lendermon says he knew there would be some opposition to the plan, citing previous debates over bringing the Grizzlies to town and building a new arena, the bluffwalk and the location for AutoZone Park.

"We always anticipated opposition," he says. "We knew there would be a lot of debate over this very important piece of property."

Plus, legal challenges will delay any work for at least two years. If the council approves the plan, the city must move to take control of the land.

The property was donated by the city's founding fathers for use as a public promenade. The heirs of the founders hold title to the land and they are somewhat divided on the proposal, although a large majority of the Overton heirs support the RDC proposal. The city would have to take control of the land, possibly through eminent domain.

In his memo to the Belzes and Dudas, Lendermon sums up his thoughts on the promenade's future.

"The truth is that absent a private vehicle to fund a significant portion of these costs," he says, "the existing condition of these promenade blocks will remain just as they have over the last 50 years."


© 2004 American City Business Journals Inc.

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