Thursday, June 30, 2005

IRS Form 990: 2004-2005

Here is the RDC's IRS Form 990 for the fical year ended June 30, 2005 [PDF, 999 KB].

Tuesday, June 28, 2005

Editorial: More questions about riverfront

Commercial Appeal

A U.S. Supreme Court decision last week might make it easier for the City of Memphis to move forward with its plans for redeveloping the riverfront.

The nation's highest court ruled that cities may use "eminent domain" power to take property from private landowners for the sake of creating new development. Acquiring land through eminent domain might be necessary to complete at least two major projects the city has in the pipeline, the Downtown promenade and the Mud Island land bridge.

But just because the city could use that power doesn't mean that it should.

The legal issues notwithstanding, there are still other questions city officials should address before they move forward with those projects.

The promenade project calls for new commercial and residential development, possibly in high-rise towers, along four blocks west of Front Street between Adams and Union.

The land bridge project would involve damming the Wolf River Harbor to create more developable property connecting Mud Island to the rest of Downtown.

Cost should be a major consideration in both cases.

Those two projects account for much of the total expense of a riverfront redevelopment plan that's expected to cost about $300 million. Given the city's recent budget troubles, it's fair to ask how high they should rank on a priority list for spending public dollars.

Benny Lendermon, president of the city's Riverfront Development Corp., has suggested that some or all of the costs might be recovered through leases charged to private tenants who would use the redeveloped property.

The issue there is how much would tenants be willing to pay and over what period of time? City officials should be very cautious about going into long-term debt to support private businesses that might not stick around until the debt is completely repaid.

There's also a question about how much more space Downtown needs for new offices or retail businesses. With the wrong mix of businesses in the areas targeted for redevelopment, the city's plans could wind up doing more harm to economically fragile areas like Main Street.

Friends For Our Riverfront, a citizens group that has been monitoring the city's plans, also has raised some valid environmental questions about the land bridge project.

John Gary, the group's vice president, believes converting Wolf River Harbor into a lake could create underwater pressure and seepage that would erode Mud Island, possibly causing property damage to the homes there.

Also, Gary said a lake with no outlet into the Mississippi River would trap stormwater pollutants and become a breeding ground for mosquitoes.

As for the promenade project, Virginia McLean, president of Friends For Our Riverfront, doesn't believe last week's Supreme Court decision would apply to property the city needs there. McLean said the state Supreme Court has already laid down the ground rules for developing that land in previous decisions. That may be a matter for the courts to decide.

What's clear, though, is that the city has a long way to go in terms of justifying key components of its riverfront plan.

Friday, June 24, 2005

Riverfront up for grabs? Supreme Court ruling may allow Memphis to take land for project

The Commercial Appeal
By Tom Charlier

A U.S. Supreme Court decision backing the use of eminent domain for a riverfront project in Connecticut opens up new options for Memphis as it pursues a similar initiative along the Mississippi River, officials said Thursday.

By a 5-4 vote, the court held Thursday that New London, Conn., could seize homes and businesses for a private development project because of the potential boost in tax revenues and jobs that could result.

The decision was viewed as expanding the limits on eminent domain. Municipal leaders said it would help financially stricken cities generate revenue, while critics called it an affront to the rights of property owners, who could be uprooted to accommodate wealthy developers.

The New London case had been followed closely by the Riverfront Development Corp., which plans some $300 million worth of projects to revamp a 5-mile stretch of the Memphis waterfront over the next 50 years.

The decision means RDC could resort to eminent domain to take a four-block section of the Downtown promenade, where a mixed-use development is planned.

"It definitely gives the city more tools in its tool box for dealing with the legal issues surrounding that piece of property," said RDC president Benny Lendermon.

The promenade is land west of Front set aside by Memphis founders for public use. Although the city has a permanent easement, the land is owned by heirs to John Overton and other founders.

The nonprofit RDC, established to manage riverfront projects, wants to raze structures such as parking garages and a library to make way for public areas and residential and commercial development, possibly including high-rises.

But the promenade plan, which was approved by the City Council in 2004, has elicited opposition from a group that includes some of the heirs. They oppose commercial use of the land.

Lendermon said the city attorney's office is reviewing options concerning the promenade. No decision has been made as to whether eminent domain will be used, he said.

But the group opposing the RDC's proposal said the agency's failure to negotiate with the heirs so far suggests it already has decided to pursue eminent domain.

"It's been our assumption that they've been waiting for this case to give them a green light to take this land away from the citizens of Memphis and lease it to private developers," said John Gary, vice president of Friends For Our Riverfront.

Gary expressed disappointment at the decision, which he said allows cities to seize a "public gem" like the promenade and "dispose of it any way they choose."

But Lendermon said the decision provides a boost for Memphis and other cities.

"It's critically important for cities, for their ability to control economic development opportunities, especially in these days when financial crises are the norm," he said.



Eminent domain's past

The Supreme Court's opinion goes further than before in allowing the government to invoke its "eminent domain" and to seize private property from unwilling sellers.

The Constitution says government may take private property "for public use" if it pays the owners "just compensation." Originally, public use meant the land was used for roads, canals or military bases. In the 19th Century, railroads were permitted to take private lands because they served the public.

In the mid-20th Century, the court said cities could condemn homes and stores in "blighted" areas for redevelopment. That 1954 decision helped trigger various urban renewal projects across the nation.

In Thursday's decision, the court went a step further and said officials need not claim they are condemning blighted properties or clearing slums.

-- Los Angeles Times

Thursday, June 23, 2005

Supreme Court ruling may affect Downtown development

Memphis Business Journal

A U.S. Supreme Court decision handed down Thursday on the taking of private property for redevelopment will likely reverberate throughout Downtown Memphis.

The case before the High Court involved a settled residential neighborhood in New London, Conn., which the city wants to condemn to make way for an office complex. Homeowners have fought the city over the principle of private property; they've argued that condemnation laws are intended for blighted areas in need of renewal, and for public projects.

New London's argument for bulldozing the middle class neighborhood is that office space would generate lots more in taxes, plus jobs, and that's good for the entire community.

The Supreme Court agreed, saying that local leaders know what's best.

In Memphis the first immediate implication is a proposal to redevelop a huge swath of the bluffs facing the Mississippi River; tearing down public and private buildings and creating a grand promenade park.

The plan was developed by the Riverfront Development Corp., and approved by the Memphis City Council. The Supreme Court ruling now gives the city attorney another tool in dealing with those opposed to the promenade, says Benny Lendermon.

"It's incredibly important nationwide," says Lendermon, president of the RDC. "Many large metropolitan areas are going through financial crises right now. This gives them more flexibility to pursue economic development. We developed a plan for the best use of the property."

Others do not agree.

Friends For Our Riverfront, a group of concerned residents and heirs to the promenade land, has opposed the RDC's plans to use private development, such as tall office towers, to pay for public improvements to the promenade.

FFOR members have long suspected that the RDC would use eminent domain to acquire the land if the heirs could not reach a consensus.

"Why pay when you can just take it?" says John Gary of FFOR.

In 2003, the RDC hired the law firm of Shaw-Pittman, which specializes in legal disputes over development rites and eminent domain, to design the legal strategy for acquiring the promenade land.

Beyond the riverfront, the High Court ruling also has implications south of Downtown, in an area peppered with old industrial buildings, some dating to the Civil War.

The neighborhood has numerous small businesses, such as welding shops and metal fabricators, but the renaissance of Downtown is knocking. The area is slowly being taken over for condo developments: renovations when possible and new construction when not.

Many property owners have resented pressure to sell. A common complaint is that when an owner doesn't sell they get harassed by building and safety inspectors. The Supreme Court may have made the process easier for developers.

© 2005 American City Business Journals Inc.

Tuesday, June 14, 2005

Riverfront Plans Promise Debate, Change

RDC prepares for summer start on Beale Street Landing

Daily News
by Andy Meek

Looking out a conference room window on the ninth floor of the Falls Building, Benny Lendermon enjoys an unobstructed panorama of Downtown’s riverfront.

Lendermon, president of the Riverfront Development Corp., has a clear view of the post office building below on Front Street,which could see a new tenant soon if the University of Memphis law school abandons its current dilapidated building and moves Downtown. Below and to the right is Confederate Park, whose war memorials and Civil War cannons make it a shaded oasis of history.

Sweeping plans. Beyond that, Lendermon takes in the sight of Riverside Drive - and the Mississippi itself - a view that as sweeping as the vision of the RDC, which has held jurisdiction over the riverfront since 2000.

And even though the Memphis City Council, in a seven-hour marathon session, approved a budget plan last week that includes a 27-cent property tax hike, eliminates $1.6 million in grants to nonprofits and keeps the historic Mallory-Neely House and Magevney House closed, the RDC is still on schedule to begin construction this summer on Beale Street Landing, a $27.5 million boat landing and plaza designated for the site where Beale Street meets Tom Lee Park and the Cobblestone Landing. The city is chipping in about $20 million in the project.

Promenade development. At the moment, Lendermon said the city attorney’s office is putting together the legal support that will allow work to begin on remaking the four-acre Front Street Promenade - the subject of a long-running debate between the RDC and an opposing group, Friends for Our Riverfront.

That debate will get another airing when representatives of both groups sound off in a public forum at the Central Library July 10. The RDC wants to replace some parking garages and buildings along the promenade with apartments, offices, restaurants, and other commercial uses.

Opposition. But FfOR believes the plan goes against the wishes of the founders of the city of Memphis. They refer to a bequest by John Overton, John McLemore and other proprietors of the land on which Memphis was founded that said the Promenade was always intended for public use.

“And as I see it, this is really a developer’sdream,” said FfOR president Virginia McLean of the RDC plan. “For the life of me, I can’t figure out where the public gets anything out of this.

“They’ve said they’ll build a sidewalk- they’recalling it a grand esplanade - along the edge of the public promenade, but the whole thing’s ours. Why should we settle for some high rises with a sidewalk along the side?”

McLean said FfOR has invited Joseph Riley Jr., mayor of Charleston, S. C., to speak in Memphis this fall at Bridges Inc. about his own city’s handling of riverfront issues. Riley, founder of the Mayor’s Institute of City Design, will discuss his urban design plan that created Waterfront Park in Charleston, give the city permanent public access to its waterfront.

“And basically, what he did is what we’re saying ought to be done in Memphis - not sold off in some short-term development scheme,” said McLean, who has a master’s degree in urban planning from the University of Virginia.

Remaking the riverfront. In his office, Lendermon has several models and renderings of the riverfront project - a well as a bird’s eye view of the real thing - that he calls on to explain the RDC’s vision. Lendermon, a former director of the city’s Public Works division, presides over the group whose board includes prominent Memphians Jerry West, Kristi Jernigan, and Angus McEachran.

Over the next two years, Lendermon said the group will give most of its attention to the Beale Street Landing and Promenade projects.

“And the whole issue on the Promenade is this was the city of Memphis in the 1800s,” Lendermon said, referring to a map of the city. “At that point, Riverside Drive didn’t exist.

The bluff behind the post office would dive into the river. And what’s occurred since then is, one, we built Riverside Drive and we’ve moved the city out to the river.

“Our disagreement with some people on the Promenade is, some people still hang on to the concept that (city founders) in the 1800s thought this ought to be a park outside our window,” Lendermon said, gesturing below. “And all we’re saying is, in the 1800s it should have been a park. But things have changed.”

Other projects. Beale Street Landing and the Promenade aren’t the only jobs on the RDC’s plate. Lendermon said the group took bids last week for a project that would connect Ashburn-Coppock Park and Tom Lee Park with Martyrs Park. Construction will begin in about a month.

He said the group also wants to bring more concerts to Mud Island, work more closely with area developers and further assist the U of M Law School in its possible Downtown move.

The RDC commissioned a master plan for the riverfront that has been endorsed by the City Council - and part of which opponents such as McLean have never stopped fighting.

“We believe that private development is great, but private development belongs on private land,” she said. “And what the RDC plan currently proposes is taking the only remaining public land on the Memphis riverbluff and turning it over to commercial developers. Right now, we’re really just trying to let the public know what’s going on concerning the riverfront, because I know that most people don’t know.”

Sunday, June 12, 2005

RDC chief uses fishing tactics to land a Big River Catch

Commercial Appeal
By Blake Fontenay

Like most good fishermen, Benny Lendermon understands the importance of being patient. It doesn't do any good to get angry or frustrated when the fish aren't biting.

So it's no surprise that Lendermon, an avid fisherman and president of the Riverfront Development Corp., isn't showing any outward signs of panic about the future of the city's $292 million riverfront development plan.

Never mind that recent budget troubles have some Memphis City Council members questioning the wisdom of spending big bucks on the Mississippi riverfront when other parts of the community are in greater need.

Never mind that a pending U.S. Supreme Court case could severely limit the city's rights to acquire land for private development projects along the river.

And never mind that a determined citizens group called Friends for Our Riverfront has been raising all manner of questions about the master plan the RDC completed in January 2002.

Lendermon says he's still confident that the plan will remain on course, even if some aspects of it won't be developed for many years.

Lendermon's critics might counter that he's fishing with the wrong kind of bait. Some contend the RDC plan calls for too much intensive development, particularly private development, in an area best left open for parkland.

Money questions have been on the minds of City Council members for months. In an attempt to replenish the city's reserve fund and reassure Wall Street bond analysts, they've been looking for ways to cut costs.

For some, the riverfront initiatives are an obvious target.

"It's a huge amount of money at a time when we're having trouble keeping the grass cut," said Councilman Jack Sammons.

The council recently decided not to set aside about $6.2 million for the Beale Street Landing, a planned riverboat docking area and civic plaza, in the budget year that begins July 1.

That hardly derailed the project, though. Because the council already had approved about $21.4 million in previous budget years, Lendermon said he plans to use those unspent funds to begin construction on the Beale Street Landing this summer.

Lendermon isn't overly concerned about the projected costs of the riverfront promenade or the land bridge, two of the other big-ticket items in the RDC master plan.

He said public dollars invested in those projects could be recovered over time through land leases with private developers.

"We support the premise of having projects that can stand by themselves and not be supported on the backs of taxpayers,'' said Lendermon.

While that sounds great, it could take years or even decades for the city to recover its investment in projects with high up-front costs. For example, the promenade project calls for a high-rise office tower along four blocks of Front Street between Union and Adams avenues. Lendermon estimates that relocating a fire station, two parking garages and an old branch library from the site might cost anywhere between $30 million and $50 million - an expense that developers probably would be unwilling to pay up front.

And after six years of waiting for a return on the city's $29 million investment in the Memphis Networx telecommunications venture, council members might not be eager to rush into another long-term deal with private partners.

Another issue that could affect the RDC's plan is a case pending before the U.S. Supreme Court. In Kelo vs. City of New London, Conn., a group of homeowners are questioning their city's right to use so-called "eminent domain" powers. The Connecticut city plans to turn the property owners' land over to private developers, who want to tear down the homes and build a hotel, health club and offices.

The overriding question before the court is whether cities legally can take over private property in areas that aren't considered blighted for the "public good" of creating new economic development.

A ruling in the New London case is expected this month - and if the city loses, it won't bode well for similar projects in other cities.

Lendermon said Memphis might not need to use eminent domain to acquire land for the promenade project, but that remains a possibility.

That property is owned by heirs of the city's founding families, although the city has an easement allowing for public uses of the land. The heirs have been divided, with some supporting and some opposing the city's riverfront plans.

The land bridge project, which would close off part of the Wolf River Harbor, almost certainly would require use of eminent domain to acquire land owned by several businesses that would lose their access to the river. Lendermon said plans for the land bridge, which would create new property for businesses to develop on Mud Island, are so far in the future that the impact the New London case might have isn't worth worrying about.

Many cities across the country have launched redevelopment projects along their waterfront property over the past 20 to 25 years. There are plenty of success stories, including regional neighbors such as Little Rock and Chattanooga.
For example, development has sprouted along the river separating downtown Little Rock from North Little Rock, Ark., including an expanded convention center and a new arena. North Little Rock Mayor Patrick H. Hays said investment in public facilities on both sides of the river has attracted new private businesses, particularly apartments and restaurants.

There's debate, however, about the merits of direct government investment in private businesses.

The Waterfront Development Corp. in Louisville, Ky., has focused its efforts on developing a giant riverfront park, using a combination of public funds and private contributions.

David Karem, the group's president and executive director, cites examples of several cities that have tried and failed to create successful private waterfront developments over the years.

"If private development is going to take place, let the market dictate it,'' Karem suggested. "If you're spending public money or money you've raised privately, spend it on parks and let the commercial development float or sink on its own."

Karem recommended private fund-raising not only to reduce the public's cost for riverfront projects, but also to get more community "buy-in" for the work that's being done. For Louisville's $100 million project, Karem said more than $35 million has been raised through private sources.

Memphis's efforts seem to have room for improvement in community buy-in. Friends for Our Riverfront, a citizen activist group, has been trying to build up a grass-roots campaign opposing the RDC's plan on several fronts.

The group generally opposes major new private development along the river. In place of the promenade, for example, Friends representatives would prefer to see a park developed at a fraction of the cost projected for the office building.

Virginia McLean, the group's president, said RDC officials didn't pay attention to citizens' calls for greater use of open space during public hearings before the plan was finalized.

McLean also accuses the RDC of neglecting the assets it already has along the riverfront, allowing brush and debris to collect and the publicly owned buildings west of Front Street to fall into disrepair.

With the right kind of shuttle service in place, McLean contends, the Mud Island River Park could become a popular place for locals as well as tourists to dine or enjoy concerts.

"They're not doing what they ought to be doing because they plan to get rid of it," said McLean.

Friends for Our Riverfront also has concerns about the land bridge project, including environmental questions about creating a slack water harbor and economic questions about the need for more commercial space in the heart of Downtown.

Despite all of those questions, the RDC plans don't seem to be in serious jeopardy - at least right now.

City Councilman Rickey Peete, who also sits on the RDC board of directors, expects all future city capital improvement projects, including those along the river, to be put "under a microscope." Peete said he expects his colleagues will question whether projects provide long-term benefits for citizens, but the riverfront plans should be able to meet that test.

"I think they are sitting on pretty solid ground for the future," said Peete.


Public dollars invested in projects to transform Memphis's downtown riverfront, shown here looking south from Court, could be recovered over time from land leases with private developers, says Benny Lendermon, who is guiding the $292 million plan.

The Friends for Our Riverfront organization opposes the RDC's master plan. The group's president, Virginia McLean, said RDC officials didn't pay attention to citizens' calls for more use of open space when they compiled the riverfront redevelopment plan, and that they have neglected the assets the RDC already has on the riverfront.

A Friends for Our Riverfront slide presentation at a recent Sierra Club meeting brought the audience up to date on the debate about plans to redevelop Memphis's Downtown riverfront.


Blake Fontenay is an editorial writer for The Commercial Appeal. Contact him at 529-2386.



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