Sometimes, it looks like Memphis suffers from what can only be called the Shlenker Syndrome.
It’s a condition that rears its head regularly when someone from outside Memphis offers to partner with city government on an important project. We are just as likely to beat them up as to work with them.
There’s reason enough to be suspicious of magic answers and people on white horses who ride in to save us, but it’s now been 25 years since Denver promoter and NBA team co-owner Sidney Shlenker was brought into Memphis by local entrepreneur John Tigrett as the answer to the development of the vast empty spaces within The Pyramid.
In the end, none of the big plans were anything but rhetoric and big promises; however, the good news is that contrary to Memphis mythology, no public money was ever spent by Mr. Shlenker and in the end, he lost all of his own money in the Tomb of Doom.
That said, it became a painful morality tale for Memphis, and long ago, “Shlenkered” became a verb in the Memphis lexicon and even today, it still turns up in comments posted to news media stories. These days, however, Memphis often seems to take out its past grievances and frustrations on people who are willing to work with city and county officials to make significant investments in the city. The latest examples are Bass Pro Shops and St. Louis Cardinals.
Long forgotten in the latest chapter in the saga of The Pyramid is the fact that it was a committee of Memphians who first approached Bass Pro Shops, not the other way around.
The arena died young, and once vacant, the lesson from other cities was there is no life after death for former arenas since most were either razed or turned into non-tax-producing uses like megachurches. That’s why the recommendation from the committee on The Pyramid’s future for it to become “destination retail” seemed at the time like wishful thinking, but it led to a call to Bass Pro Shops and the rest is history, albeit a history with many chapters and some filled with vitriol and contempt from project critics.
In the intervening years between that approach and beginning of construction at The Pyramid, Bass Pro Shops received a barrage of criticism, notably that the retailer was taking Memphis for a ride and that the public incentives – although the majority of them were state incentives – were undeserved and the store would never even open.
The Costs of Going Cheap
Of course, before any new use in the old arena could be installed, there had to be massive renovation of the building. The interior had to be gutted, including the removal of 20,000 seats, and major seismic improvements had to be made to the building. That was the public’s cost and it’s been under way for almost a year.
Truth be told, when it was built, the third largest pyramid in the world was envisioned as a distinctive architectural icon for Memphis, but it was also a symbol for our community’s tendency to ask how to do something cheap rather than to do it well. When it was proposed, The Pyramid was promised to be a “state-of-the-art arena” for only $39 million.
While it ultimately cost $65 million because of changes in its design and materials, supporters of the project in the 1980s lulled people into believing that it was a first-class facility despite bad sound that essentially kept the building unbooked for concerts for the 12-18 months it took to fix it, narrow seats, insensitivity to access for the disabled, poor luxury box design, and the death-defying angle of the stairs in the upper decks.
It was not until the FedEx Forum was built that we really knew what a first-class arena was supposed to look like and what it costs. By then, The Pyramid had been the “Tomb of Doom” for basketball opponents of University of Memphis, but also the tomb for the year-round attractions promised by Mr. Tigrett and Mr. Shlenker.
Buried ideas included a Hard Rock Café; a glass inclinator to the apex; the mutation of Egyptology and rock music into a “Rakapolis” attraction; Dick Clark’s American Music Awards Hall of Fame; a re-creation of The Cavern of Beatles’ fame and the bricks from the original Stax Records studio; an Omnimax theater; a light and music spectacle inside the arena on non-event days, and a short wave radio station at the apex beaming Memphis music to the world.
Hedging Our Bets
So, now 22 years later, the long-awaited elevator to the top and the observation deck overlooking the river are finally to be built as part of Bass Pro Shops’ construction in the building. The retailer recently pulled a permit for about $40 million to begin its work in The Pyramid, and only now have the critics’ complaints been muted.
If The Pyramid was the civic model of doing something on the cheap, AutoZone Park is the embodiment of doing it right. The total cost of about $80 million paid for construction of the ballpark and the purchase of a Triple-A franchise for Memphis still ranks at the top of the rankings for the most expensive minor league park projects even now 13 years later.
A few years ago, it became clear that the business model for the ballpark and team had failed when the Redbirds Foundation defaulted on its bond payments. Ultimately, a New York hedge fund bought the bonds, and a group of Memphians approached the St. Louis Cardinals to see if one of pro sports most-respected franchises would be interested in buying the team and managing the ballpark.
The Cardinals agreed to take a look at it and ultimately, it offered to partner with City of Memphis to take control of Memphis’ baseball future. In the proposal, the Cardinals would buy the team for about $15 million, it would manage the ballpark and pay all operating costs (including deficits if there were any), and it would be responsible for routine maintenance. (In the interest of full disclosure, we’re working on this project.) Meanwhile, City of Memphis would buy the ballpark for $19.5 million and the cost would be paid by three revenue sources.
There is the temptation to compare the Redbirds agreement with the Grizzlies deal, but in truth, every negotiation is different and there was a big difference when it comes to the Grizzlies. In that case, city and county governments’ negotiators had an awful lot of cards in their hands because the team wanted $250 million for an arena, for improvements to its temporary home in The Pyramid, and a capital expenditures pool. That’s why local government got everything that mattered to them, notably that the Grizzlies would pay all operating costs, including deficits, and sign a long-term lease.
Those two elements are also in the AutoZone Park proposal although unlike the Grizzles, the Cardinals agreed to pay annual rent. For the Cardinals, that amounts to $300,000 and pledged $100,000 more if revenue projections are not met that ensure that the project is self-financing and self-funding. Council members have been vigilant in their oversight and that’s the way our system of government is set up, and on balance, we think the proposal seems to have low risk and big upside.
More to the point, the downside is not just that AutoZone Park goes dark but Memphis’ national image takes a direct hit. We can appreciate City Council’s agitation at dealing with a New York hedge fund, but it’s hard to map out an alternative scenario that doesn’t have Memphis at the table working out an agreement with it. For example, it seems to us that if the hedge fund sells the team and it is moved, Memphis will search for another team to play at AutoZone Park (it’s likely to be a Double-A team), and if one is found, it still requires for Memphis to reach an agreement with the hedge fund to use the ballpark.
Many of our friends in the business community are deeply concerned about this agreement, and they say it is because of the team’s impact on our quality of life, branding, and downtown vibrancy. It’s awfully hard to disagree with them.