State of Tennessee tourism officials recently released their new strategic plan, and one of its key priorities was to establish the state as an amateur sports destination.
Memphis is poised to do just that with city government’s plan for a high-quality, standard-setting sportsplex at the Fairgrounds, and the best news of all is that it’s being paid for with state sales taxes.
Lost in the discussion about the Fairgrounds redevelopment project is that the amateur sports center is the fulfillment of a 25-year dream for Memphis to establish itself as a national presence in what is today an $8.3 billion sports tourism industry (that’s the industry’s terminology).
To top it off, sports tourism is a growth industry with an increase in spending of 9% and an increase of 10% the number of events when 2012 is compared to 2011. Meanwhile, sports tourism attracted 27.5 million visitors last year, and in markets our size, about 60% of the events came from outside the region.
All in all, it’s an exclamation point to City of Memphis plans to turn the 170 acres at the Fairgrounds into something that more accurately represents its potential.
Amateurs Are Big Bucks
The vision of Memphis as an amateur sports center surfaced in the late 1980s and gained momentum in the early 1990s when some Chamber of Commerce and Convention and Visitors Bureau officials made a case for our city’s stronger play for amateur sports events.
In this push, as it inevitably does in any city pursuing more amateur sporting events, the story of Indianapolis story was often cited. There, the Chamber of Commerce drove a movement to develop amateur sports tourism as a major economic development strategy.
As former Mayor Bill Hudnut often said, it was in setting out to make his city the U.S. amateur sports capital that Indianapolis was transformed into the city it is today. Jack Swarbick, now athletic director of University Notre Dame but back then, chief author of Indianapolis’ early big proposals for major events, has said it was a three-step process – going aggressively after sports governing bodies’ headquarters, building world-class facilities, and winning bids to host major championships.
In addition to the economic impact, Mr. Hudnut said that the focus, collaborative working groups, and success that came from the pursuit of Indianapolis’ amateur sports goal was channeled to other civic priorities like rebuilding the urban core and fighting blight.
Propelled by its Indy envy, Memphis and Shelby County created the Memphis and Shelby County Sports Authority in hopes that it would drive an aggressive sports agenda. The push climaxed in 1994 and 1997 when The Pyramid was the site for the Southeastern Conference men’s basketball tournament (won both times by Kentucky) and the 2001 SEC women’s basketball tournament (won by Georgia).
The Seeds of the Fairgrounds Plan
Both tournaments were cold slaps of reality to Memphis leaders, however, because cities bidding on the tournaments were required to provide huge sponsorships and absorb significant costs. Raising the money became harder and harder. Then again, by that time, the Sports Authority had turned its attention to the 2000 opening of AutoZone Park, which it was energetically supporting, and the 2001 move of the Vancouver Grizzlies to Memphis, because the Sports Authority was the financing vehicle for a new arena.
Essentially, Memphis’ sports agenda turned away from amateur sports, and because of it, the Memphis Sports Council at the Memphis Convention and Visitors Bureau was created with the idea that it would recruit major events and the Sport Authority would provide the funding. It really never came to pass, and the Council has been perpetually underfunded, but its officials continue to say that Memphis has rich amateur sports potential if it could get the right facilities.
It was into this environment that a committee was appointed in 2004 by former Memphis Mayor Willie W. Herenton and then-Shelby County Mayor A C Wharton Jr. to consider how to capitalize on undervalued and underused assets at The Pyramid and Fairgrounds. Robert Lipscomb, director of City of Memphis Housing and Community Development, was appointed as staff for the committee.
That committee broke in two – with a subcommittee concentrating on The Pyramid and the other on the Fairgrounds. The Pyramid group, chaired by businessman Scott Ledbetter, welcomed all kinds of ideas for the reuse of the former arena – from a church to an aquarium and from a theme park to world trade center – before settling on destination retail as the best way to increase tax revenues and expand the economy. The Ledbetter committee then identified Bass Pro Shops as the prime target and went after it.
The First Vision of the Future
The subcommittee evaluating the future of the Fairgrounds – chaired by Methodist Hospital executive Cato Johnson – was the first to introduce the idea of mixed uses there with an emphasis on amateur sports. Looney Ricks Kiss was hired to flesh out the concepts, and the first images of a revived, mixed use Fairgrounds were released.
“The future vision of the Fairgrounds is to build on its historic role and location as a family recreation center to become the heart of the city for children, youth, and their families,” the 2007 Fairgrounds report said. “Furthermore, it will be the place where an unprecedented diversity of Memphians can come together to recreate, learn, and grow, forming a tapestry of people that make up the ‘family’ of our great city. Both literally and figuratively, the Fairgrounds will serve as a ‘level playing field’ for all Memphians to refresh and build body, mind, and spirit while strengthening bonds with their families and community through shared recreation, entertainment, and education.”
It was a point of view that became the founding philosophy for Fairgrounds planning and a thread that runs through today’s $187 million redevelopment plans. Over the years, the sportsplex, which will be located south of Tiger Lane, has been evaluated by C. H. Johnson Consulting, and he will make the final recommendation of the types of sizes of facilities that should be built at the Fairgrounds.
Already, consultant Johnson recommended that the Fairgrounds facilities complement other regional baseball facilities to open up Memphis for larger, national competitions. He recommended 4-5 baseball diamonds; renovation of Tobey Fields; a championship baseball stadium seating about 3,000; four outdoor multi-purpose fields for soccer, lacrosse, rugby, and football, and skate park
Meanwhile, a presentation to City Council earlier this year said that the sports consultant has recommended a 5,000-seat multi-purpose building that can accommodate several sporting activities at the same time will replace the decrepit Mid-South Coliseum (the cost of downsizing the arena is cost-prohibitive) and be something akin to the HP Field House at ESPN Wide World of Sports Complex. The new multi-purpose building would be about 135,000 square feet and house multi-sport courts (eight basketball and 12 volleyball), retractable bleachers to create a championship court, team meeting rooms with lockers, and academic tutoring room.
The original vision of the 2007 report for a mixed use site is captured in the current plans with retail and residential components. As Mr. Lipscomb told Memphis City Council earlier this year, the final mix at the site will be dependent on responses to RFPs (Request for Proposals) for the retail part of the development.
All in all, the current flexibility of the plans at the Fairgrounds belie statements by some that treat the redevelopment as set in concrete. At this point, more than anything, it sounds like the application is about making sure the financing is in place before moving assertively toward actual development.
It has been complained that City of Memphis can’t say at this point who the developer is and what stores and restaurants will be at the Fairgrounds. Perhaps, it sounds like a chicken and egg problem to some, but the point is that before city government can send out RFPs, it needs to make sure that the money has been approved. Then, the amount and type of retail are dependent on the responses from developers.
State sales taxes from the proposed 400,000 square feet in restaurants and shops are the primary sources of funding for the redevelopment, including the $60 million in sports facilities and venues. In addition, about $2.5 million in state sales taxes (the funds are the incremental increase in sales taxes that occurs after a specific date set by state officials) collected within the tourism development zone but outside of the Fairgrounds itself will help pay for the bonds for the project. If those sales taxes were not captured for the Fairgrounds project, they would instead stay in Nashville to be spent by state government all across the state with Memphis getting about 20% of them back in state funded services and projects.
From the financial analysis submitted with the TDZ application, it appears that about $681,000 in local option sales taxes will also help pay for the project, increasing to about $1 million at the end of the 30-year bond term. That said, without the TDZ, city taxpayers will end up paying from the city CIP budget the $36.8 million cost of Tiger Lane, ADA improvements to the stadium, and the new turf, lighting, sound, and painting at the stadium. Those bond payments would amount to about $2.4 million a year, or put another way, city taxpayers still come out $1.5 million to the good.
The best news of all to Memphians is that the bonds for the Fairgrounds redevelopment are revenue bonds, meaning that there is no risk to City of Memphis – and no increase in city debt – because all risks rest with the bondholders. At a time when it’s next to impossible to get anyone in Nashville to pay much attention to Memphis – much less care enough to fund its needs – it’s a great opportunity for city taxpayers to get some help in the form of the TDZ investment.
All in all, to us, it seems (excuse the pun) like a grand slam to us.