Friday, April 29, 2005

Letter: The RDC Responds

Memphis Flyer
Letters to the Editor
Link to original

The Riverfront Development Corporation was established as a result of several communitywide public forums, which affirmed that revitalization of the Memphis riverfront was an important priority for moving this city forward ("River of Dreams," April 21st issue).

Having served first as a steering-committee member studying how best to begin riverfront improvements and now as the RDC's founding chairman, I can assure you that our first task for the city of Memphis was to provide a higher level of service to the green spaces along the riverfront, attract more citizens to the area, and provide appropriate amenities.

We have achieved and maintain a high standard of excellence in caring for the parks. We have added canoe, kayak, and bicycle rentals to Mud Island River Park and started a walking club and overnight camping. Plus, we eliminated the admission fee to Mud Island.

The RDC is in fact doing more with less. The RDC is managing the riverfront at the same cost to the city as in 1999. At that time, riverfront costs had been escalating at a rate of 14 percent a year over the previous four years. Using that rate, the RDC has saved the city $3.9 million.

I do not believe that the citizens of this community want their riverfront to fall into disrepair. I believe this community wants a vibrant riverfront and that the vast majority of people support the RDC. We are working to maintain excellence in all that we do, and I believe the people enjoying the riverfront today expect just that.

John W. Stokes Jr., Chairman
Riverfront Development Corporation

Street Talk: Hooks says "revenue problem," history says otherwise

Memphis Business Journal [Link]
By Scott Shephard

At last week's City Council meeting where the mayor presented his 2006 budget, City Councilman Janet Hooks repeated her assertion -- just as she did when her payroll tax was defeated in November -- that the city "did not have a spending problem, it has a revenue problem."

With respect to Hooks, history suggests otherwise.

In 1992 when Mayor Willie Herenton took office, the City of Memphis' operating budget was $252 million. In 2003 the budget was $461 million -- an increase of 83%.

Meanwhile, the Consumer Price Index (CPI inflation rate) for this period was 31%, indicating that spending was growing at more than twice the inflation rate.

The 2005 adopted budget is $495 million, a 96% increase from 1992.

City records contain some other telling statistics:

The property tax income to the city in 1992 for the operating budget was $77 million. The 2003 property tax income was $147 million -- an increase of 90%.

So, Memphis must have grown considerably during this 11-year stretch, right?

Not so much.

The city's population grew by a scant 7% during this time frame, according to the U.S. Census Bureau.

Apparently, many of those new residents were getting jobs with the city.

The total city employment in 1993 was just over 6,000 people. The city employment in 2005 is proposed to be more than 7,100, up 19%.

Wednesday, April 27, 2005

Letters: Public won't escape riverfront bill

The Commercial Appeal
Letters to the Editor

Your April 22 article, "Shutting off Wolf? Land bridge would force companies to move," said: "The land bridge is a central feature of a $292 million master plan of improvements -- most of them privately financed -- sought by the city's Riverfront Development Corp."

If you are talking about the "$292 million" (a figure that is out of date), most if not all of it is actually public financing. But if you really meant to describe the entire master plan (with "improvements," i.e. buildings), then you used the wrong figure. It should be more like $1.3 billion.

I refer to the financial projections provided by the Riverfront Development Corp. in January 2003 to the Urban Land Institute:

The capital cost of the project (with contingencies) was actually estimated at $340 million. (That's in 2002-2003 dollars, and will likely change after the Corps of Engineers does its feasibility study.)

The financials refer to a $200 million "public portion" (which is supposed to be injected evenly over 10 years). The financials do not detail what portions are federal, state and local.

Consistent with the above, Memphis Mayor Willie Herenton referred to $100 million over five years planned for in the 2003 Capital Improvement Program budget.

The remaining $140 million ($340 million less the public portion) is to be financed by debt. It does not take a rocket scientist to guess that the public will be involved with this debt, most likely by guaranteeing the bond issues.

Whether you count only the $200 million or the entire $340 million (including debt), most of the capital cost of the land bridge and lake is not privately financed. Therefore, your characterization is highly misleading, if not an outright error.

You don't have to rely on my word about the financial projections. Go to the RDC Web site and look at the master plan itself, which predates the ULI submission.

No question, the $292 million (or the slightly more current estimate of $340 million) is intended to be paid with public financing. Clearly, a correction should be published, lest Memphians be fooled into thinking they will get a land bridge and lake for free.

Michael Cromer

This so-called land bridge is really an earthen dam several blocks wide that would close off the harbor to barge traffic to link Downtown with Mud Island and make new land, in the river, available to private developers to create a second Downtown and a small recreational lake. Taxpayers will pay for this dam, just as they will pay for most of the RDC's "improvements" to the Mississippi riverfront.

Taxpayers will pay for the RDC's attempts to seize the Promenade blocks by eminent domain, and taxpayers will pay for the ensuing lawsuits as the heirs of Memphis's founders struggle to keep that land in the hands of the people. Taxpayers will pay to relocate all of the buildings on the Promenade, which include the City of Memphis Fire Headquarters, Cossitt Library, two garages and, depending on what is done with it, the Customs House and Post Office. Even RDC president Benny Lendermon was forced to admit on television that the public would have to pay for the relocation of the fire headquarters.

Taxpayers will pay a large part of the cost of placing the floating islands, terminal and docking facility at the foot of Beale Street, which is a $27.5 million project.

It is inaccurate and misleading for you to claim that all of these projects in the RDC master plan will be financed by private developers. You need to get the facts instead of taking the RDC's word.

Mimi Waite

Friday, April 22, 2005

River of Dreams: Is Memphis gilding the lily on its waterfront while the rest of the city withers?

Memphis Flyer
By John Branston
Link to original

On Tuesday, Mayor Willie Herenton presented his annual budget to the City Council, including a recommendation of a 54-cent property tax increase to restore some slashed services and continue the city's $86 million contribution to schools.

The visible evidence of reduced services includes the overgrown parks, understaffed golf courses, and weedy boulevards around the city and the reduction of recycled garbage pickup to every two weeks instead of every week.

But one area of Memphis has never looked better and is seemingly immune to budget cuts: the riverfront, which has been under the jurisdiction of the Memphis Riverfront Development Corporation since 2000. From Martyr's Park to the Bluffwalk to the Mud Island Greenbelt, parks are as neatly manicured as a country club golf course. Million-dollar homes line the South Bluffs and the main drive on Mud Island. Construction of new homes and apartments is booming. Riverside Drive has been turned into a boulevard with median strips of flowers, crosswalks, and two new stairways up the bluff.

And despite the budget shortfall that threatens schools, hospitals, and law enforcement, the flow of public money to the riverfront continues as steadily as the flow of the Mississippi River. This summer, construction will begin on Beale Street Landing, a $27.5 million boat landing on Tom Lee Park at the entrance to the harbor. A total of $17 million of that amount is coming from city of Memphis funds, the rest from state and federal governments. The main customers for the boat landing will be two tour-boat companies that bring, at most, about 20,000 out-of-towners to Memphis each year, or about the number of people downtown for a sold-out Grizzlies game. The Delta Steamship Company paddle-wheelers and the long, blue River Barge Excursion Boat now dock in the harbor on the east side of Mud Island, and passengers are transported to or walk to downtown.

On the horizon -- long term or not-so-long term, depending on whom you talk to -- is the granddaddy of all riverfront projects, the development of the Front Street Promenade and the construction of a land bridge to Mud Island. That project could bring the total cost of funding the RDC's master plan to as much as $340 million over several years.

The contrast between the Memphis haves and have-nots illustrates several things about urban politics and pressure groups. The RDC, created with Herenton's blessing during his third term as mayor, has an embarrassment of riches in staffing, funding, and business support. Its board includes former city chief administrative officers Rick Masson and Greg Duckett, Cybill Shepherd, Jerry West, Pat Kerr Tigrett, Kristi Jernigan, John Stokes, Barbara Hyde, and former Commercial Appeal editor Angus McEachran. Its president is Benny Lendermon, director of the city's Division of Public Works for several years. His assistants include former City Engineer John Conroy.

Unlike the Memphis Park Commission, the RDC all-star team and their consultants only have to focus on the front door of Memphis. The Park Commission and Division of Public Works and their bureaucrats can't rely on that kind of clout, but they must maintain hundreds of public facilities, streetscapes, and parks in out-of-the-way places used by Memphians who rarely visit the riverfront.

The result is a cityscape that suggests the homeowner who happily pours money into landscaping his front yard while the trash piles up in the attic and the backyard.

The riverfront improvements under the RDC and, in fairness, the Park Commission and the U.S. Army Corps of Engineers before it are obvious and have helped create the downtown apartment and condo boom. But agencies and projects tend to take on a life of their own. Beale Street Landing was funded years before Herenton proposed his latest property tax increase. The land bridge has been approved in concept by the City Council but not funded.

The RDC was not invented to keep the grass trimmed. It is all about big deals and grand visions. With an empty Pyramid and an underused Mud Island River Park and monorail staring them in the face, some Memphians are wondering if the RDC is gilding the lily while the garden withers.

"Why spend $360 million [sic] on a really crummy plan," asked Lisa Snowden at a meeting of Friends For Our Riverfront Monday evening at Cafe Francisco, attended by about 30 people. Members of the group generally support less expensive options that would emphasize parks, sidewalks, and greenspace.

Other speakers aimed their fire at the Beale Street Landing and its "floating islands" to provide pedestrians access to the river.

"They're going to start school at 7 a.m. (to save money) but we're going to have the floating islands," said Mimi Waite. "We don't need the floating islands."

John Gary, a founder of the Friends group, noted that the steamboat companies have other options besides Memphis. "We've got competition that we didn't have before," he said. "I think Tunica has some pretty good enticements to lure steamboats away from here."

Gary said the placement of the floating islands and bridges near the mouth of the harbor is "unfortunate" and could interfere with barge traffic. The group passed out a letter from Terry Martin, terminal manager for Lafarge North America, opposing any project that would affect the entrance of the Wolf River.

Lendermon said the RDC is not gilding the lily or building something that will become obsolete or underused. Pending approval of some permits by the Corps of Engineers, the RDC hopes to have contractors begin dredging the entrance to the harbor in July in preparation for "River Outlook," the name given to the boat landing. When it is complete, it will not only give tour boats a place to dock but will also tie the cobblestones to Tom Lee Park, provide a new site for festivals, and give pedestrians a place to walk between the man-made islands and scoop up a handful of river water.

"You still have no place for people to get to the water," Lendermon said. "If you were going to touch the water, where would you go? You have the ability to do that here."

The city, he noted, was going to redo the cobblestones and reshape the northern tip of Tom Lee Park at the entrance to the harbor anyway. The work actually started several years ago but was aborted because the necessary permits had not been obtained.

The RDC annual report calls River Outlook "a grand civic ending." It notes that one heavily traveled thoroughfare to the riverfront, Poplar Avenue, dead-ends at a parking garage while another, Union Avenue, unceremoniously abutted a metal guard rail before the cobblestones project was completed.

Lendermon said riverboats that carry tourists are pressing for the project to be completed.

"The Delta Steamship Company is close to refusing to dock at Mud Island," he said, even as a boat was unloading Monday afternoon across from his Front Street office. Delta Steamship and the River Barge Excursion Boat carry 350-450 passengers each and make 50 stops a year in Memphis, Lendermon said. Tunica, he said, has only gotten one visit from Delta Steamship since its $20 million museum and river park opened last year.

As for the land bridge, Lendermon said Memphis must cross that bridge when it comes to it, but that might not be for quite a while. The RDC and the Corps of Engineers are looking at industry relocations and navigation issues in the harbor, which is also a concern of the developers of the Uptown neighborhood who would like a water connection.

"In 15 years, as downtown starts developing to its fullest, someone's got to sit down and make a decision," he said.

Meanwhile, Gene Carlisle, a veteran downtowner who has seen the highs and lows of the riverfront, might change the picture if he follows through on plans to develop a condominium tower and a hotel on the corner of Beale Street and Riverside Drive, where an old building was just demolished.

Instead of being an American icon, the corner where the street that birthed the blues meets the Mississippi River has instead been the pits for 25 years, the place where busted dreams and struggling restaurants come to die. Tenants have included a shopping mall called the Emporium, Pyramid huckster Sidney Shlenker, and such forgettable restaurants as Armadillo Jack's, Number One Beale, and Wang's. In 2003, the big wind storm did Carlisle a favor and blew away enough of the building that he could tear the rest of it down and start over.

Carlisle, who grew up poor in Mississippi and made his fortune in Wendy's restaurants, was inducted into the Memphis Society of Entrepreneurs last week. In the next few weeks he said he will unveil plans for a condominium tower at least 20 stories tall and, if he can find a partner, a luxury hotel and four-star restaurant in a second building. The combined investment would be over $300 million, making it the biggest downtown project since FedExForum.

Lendermon said Carlisle's project is "something we would support." Carlisle said it is not being driven by construction of Beale Street Landing and might even have some parking issues.

But that's a problem for another day. The rest of Memphis should have such troubles.

Copyright 2005 Contemporary Media, Inc.

Shutting Off Wolf

Land bridge would force companies to move

The Commercial Appeal
By Tom Charlier

The company Terry Martin works for isn't just situated in Wolf River Harbor. It's cemented there.

Lafarge North America Inc. operates a cement terminal that distributes 165,000 tons of powder a year to mixing plants in the Memphis area. Barges carrying 1,500 tons of cement regularly pull into the 58-year-old terminal at Henry and Front, a mile north of The Pyramid.

That's why Martin, the terminal manager, has trouble even contemplating being forced to move some day to make way for an expansive riverfront-development project envisioned by Memphis officials.

"We've got a lot of money invested in this terminal," he said.

Nonetheless, Lafarge and six other industries and government agencies that remain along the waterway are the focus of a survey gauging the impact of a long-range proposal to close off the harbor with a land bridge linking Downtown and Mud Island.

The land bridge is a central feature of a $292 million master plan of improvements -- most of them privately financed -- sought by the city's Riverfront Development Corp. But it's not going to be built for probably another 15 years or so, RDC president Benny Lendermon said.

"You really have to have a majority of the developable property on or close to the waterfront developed" before new acreage is created through a land bridge, he said.

If it is built, the land bridge will transform the harbor into a recreational lake, eliminating a last remaining vestige of Memphis riverfront history.

In the decades before the Corps of Engineers rerouted the Wolf River to north of Downtown in the early 1960s, the mouth of the Wolf served as a bustling harbor for commercial vessels on the Mississippi River.

But the construction of a causeway to Presidents Island more than 50 years ago created McKellar Lake -- a large, slack-water embayment that has become the city's main port.

According to the Waterborne Commerce Statistics Center, river vessels shipped 18.2 million tons of material in and out of the Memphis area in 2003. But only 1 million tons came through the Wolf River Harbor.

Although that total was up from the 877,000 tons reported in 2002, it was barely half the 1.8 million tons of cargo shipped in and out of the harbor as recently as 1995.

The operations that still line the Wolf's former channel include the headquarters of Anderson-Tully Co., a hardwood timber management and lumber firm, and a Coast Guard facility that helps oversee nearly 800 miles of the Mississippi.

In addition to Lafarge, industrial operations include a cement terminal run by Buzzi Unicem (formerly Lone Star Industries) and terminals and elevators owned by Bunge North America, Cargill Inc. and Westway Feed Products.

The survey, conducted by a corps contractor, will help define the scope of the harbor facilities and how they are served by the waterway and the surrounding road network.

Officials with some of the firms say they dread the prospect of moving.

"It would be expensive," said Deb Seidel, spokesman in Bunge's St. Louis headquarters.

The land bridge would "shut us down," she said. "Most of our business is barge traffic."

The Coast Guard's Group Lower Mississippi River facility is the base for a 75-foot cutter that tends navigation buoys up and down the river. But officials there haven't staked a position on the land bridge, said operations specialist Joel Coffman.

Some harbor facilities would feel little effect.

Anderson-Tully, for instance, no longer has barge traffic in the harbor. Most of its mills and facilities are centered near Vicksburg, Miss. "Our business operations would not be affected," president Chip Dickinson said.

Donald McCrory, executive director of the Memphis and Shelby County Port Commission, said he's concerned about the potential effects of the land bridge on overall river commerce. "I hope that's given the consideration it needs."

In addition to the long-range RDC plans, the harbor industries might conflict with the city's Uptown development being built just to the east.

Robert Lipscomb, director of Memphis Housing Authority and director of Housing and Community Development for the city, said relocating the industries is vital to the city's redevelopment.

"I think you have to relocate them. ... There's a higher and better use for that property."

Copyright 2005

Monday, April 18, 2005

Development threatens harbor operations

Land bridge, residential development may relocate harbor firms

Memphis Business Journal
by Amos Maki
Link to original

Businesses along the Wolf River Harbor say a proposed land bridge stretching across the harbor would cripple their businesses and probably force them to close for good.

"If they shut down river traffic, it would shut us down," says Deborah Seidel, communications director for Bunge North America, which has 11 full-time employees at its facility on North Second.

"The vast majority of our business there is barge traffic."

Officials from Riverfront Development Corp., Army Corps of Engineers and Tetra Tech, Inc., are contacting seven Wolf River Harbor businesses to determine the impact of RDC's proposed land bridge.

The land bridge, if built, would close the harbor many of the companies rely on to move everything from cement to grain. The planned $78 million, 38-acre land bridge would stretch across the harbor from Court Street to Poplar and is part of the RDC's Riverfront Master Plan drawn up in 2002 by architecture and urban design firm Cooper, Robertson & Partners.

Businesses affected include Anderson-Tully Lumber Co., Bunge North America, LaFarge North America, Inc., Buzzi Unicem, Cargill, Inc., Westway Feed Products and the U.S. Coast Guard.

The cost of the $332,000 feasibility study is being split by RDC and the Corps of Engineers.

But even if the land bridge is never built, those harbor businesses would probably be forced to move anyway to allow residential development to expand all the way to the water's edge.

"They are studying what impact the land bridge concept will have on the industries in the harbor and, more than that, how you get them to start looking at relocating their facilities within Memphis," says Dorchelle Spence, RDC spokesman.

"The reason that needs to happen is for a number of projects that are going forward and the biggest one is Uptown, moreso than the land bridge.

"The Uptown development that is occurring is taking residential closer to the waterfront and you can't do that when you have all of these industries in the harbor because of the 18-wheel truck traffic it brings through that neighborhood," she says. "(Moving industry off the harbor) needs to happen whether we move forward with the land bridge or not."

Uptown, a joint venture between Belz Enterprises, Henry Turley Co. and the City of Memphis, covers more than 100 city blocks in the north end of Downtown.

The project received a $35 million HOPE VI grant from HUD, which helped transform two of Uptown's former public housing units into mixed-income housing.

Robert Lipscomb, director of the division of Housing and Community Development and Memphis Housing Authority, says using the harbor land for industry isn't the best use for what could potentially be very valuable residential property.

"As Housing and Community Development, we want to go all the way to the river and make sure we use the land to its highest and best use," he says. "To me, the highest and best use of that land, not to mention the compatibility with residential uses, is residential and commercial development. The current use is really not compatible with the residential and commercial use that is moving toward that area."

Lipscomb says he will work with the RDC, a not-for-profit, public/private partnership under contract with the city of Memphis, to redevelop the area.

"The RDC is the primary motivator and will determine what goes there, so we'll be working with them to make sure the highest and best use of that property is attained," he says.

"I think we're definitely on the same page."

The RDC and Housing and Community Development may be on the same page, but harbor industry officials don't like the book. They say they rely on the harbor to transport their goods by barge and that closing the harbor or relocating them to make way for new development could put them out of business.

"We get all our barges in from that end of the river and if they dam that up, I'm out of business," says Terry Martin, terminal manager at LaFarge North America, a cement distributor which has been on Henry Street since 1947 and has five full-time employees. "We do everything by barge."

Mike Johnson, terminal manager for Buzzi Unicem, a cement distributor, says moving off the harbor would kill the business.

"It would put us out of business," he says. "The cost of trucking isn't even feasible and we don't have any rail into there and the cost and dependability of rail for the volume we do isn't feasible, either."

Spence says they are in the early stages of exploring how to relocate the industries, hopefully within the city.

"This is first step in exploring what it would take to make that happen," she says.

© 2005 American City Business Journals Inc.

Sunday, April 10, 2005

Editorial: No sacred cows in city budget

Commercial Appeal

Around most households, people try to figure out how they'll pay for groceries and utility bills before they start thinking about adding a new wing to the kitchen.

Memphis city government should be run the same way.

With that principle in mind, the city's leaders might want to take another look at some of the "big ticket" projects they've been planning to do over the next five years or so.

Mayor Willie Herenton is scheduled to present his annual budget proposal to the City Council April 19.

Keith McGee, Herenton's chief administrative officer, said he didn't want to discuss specific cost-saving steps until the proposed budget has been finalized.

For months, though, the mayor has suggested the options for balancing next year's budget could include a hefty property tax increase, reductions to city school funding, service cutbacks or some combination of all three.

Council members have a few thoughts of their own about how to save money, including Carol Chumney's suggestion to delay some major construction projects and redirect that money to cover operating expenses.

Of course, neither that idea nor any other will likely be the whole solution to the city's budget problems.

There will undoubtedly be a need to examine whether all city departments are operating as efficiently as they possibly can.

There will be a need to determine whether the city's fees and fines should to be increased to bring in more revenue.

And there will be a need to evaluate whether the city should be giving grants to nonprofit organizations or providing college tuition reimbursement to its employees.

However, there are a lot of big projects looming on the horizon that could cost -- or save -- the city millions.

One example is the Beale Street Landing, a project that includes improvements to the Wolf River harbor entrance and a riverboat docking facility at the end of Beale.

The project's cost would be $27.5 million, of which the city would pay approximately $17.5 million, with the balance coming from state and federal sources.

Another example is the Memphis Area Transit Authority's light rail project. Including money set aside in this year's budget, the city is planning to spend $283.8 million on light rail through the 2008-09 fiscal year. Even with federal and state grants, the city's share would be about $70 million.

At this point, no one here is arguing against spending money to improve the riverfront or ease the traffic flow on local streets. Both of those examples could be good projects, provided money is available to do them. But in the city's current financial situation, they might represent that new kitchen wing or sun room in our household analogy.

It doesn't make a whole lot of sense to cut funding for schools -- or for that matter, delay more vital construction projects like new roads, police precincts or fire stations -- without at least discussing whether the glitzier projects could wait until the city has a bit more cash at its disposal.

Regardless of the city's short-term problems, it's wise to make some investments for the future. In their budget deliberations, council members might conclude either or both of those projects qualify as good investments.

Yet if money is as tight Herenton and his staff say, there shouldn't be any projects left out of the budget discussions this year.

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