The Commercial Appeal originally published this article on Sunday, February 8 in the Viewpoint section:
With 175 available acres smack in the middle of Memphis, the Fairgrounds present an exciting opportunity. Combined with a powerful public financing tool called a Tourism Development Zone, the redevelopment of the Fairgrounds has tantalized private developers and bureaucrats alike for more than a decade. But the current city proposal is a metastasized version of earlier plans, with fewer civic benefits, substantially more risk and none of the soul.
The plan is to build a youth sports facility and make improvements to existing assets such as the Liberty Bowl while demolishing others including the Mid-South Coliseum. I have no doubt a sports facility would get some use. The question is in this fiercely competitive national market, will it be the kind of tourism draw anticipated, or cannibalize local and regional competitions from our existing sports infrastructure.
Another problem is youth sports facilities aren’t profitable. They lose millions of dollars every year in operations. Then every 10 years or so they require major capital maintenance expenditures. The bond issue is to build facilities, not to run them or maintain them over the long haul. It’s hard to imagine a private developer agreeing to absorb those losses. So I guess that leaves Memphis holding the bag.
The plan calls for up to 400,000 square feet of retail and a 180-room hotel. Capitalism is a powerful thing. When there is demand for something, the market generally provides it. No one is clamoring for that kind of retail or hotel in Midtown, much less in an offbeat location behind a school, fitness center and museum. If the financial success of the development relies on expected profits from these uses, we need a reality check.
The city would pay back its loan using growth in sales tax collected from a Tourism Development Zone that includes most existing Midtown commercial development. Yet proven Midtown tourist destinations inside the zone including the zoo, Overton Square and Cooper Young would see none of that money.
The point man on this project is Director of Housing and Community Development Robert Lipscomb. After recent scrutiny from the public and City Council, he is making a stronger pitch that we go ahead to Nashville seeking authorization for the Tourism Development Zone. The story is once we have the TDZ in place we can have lots more planning and public meetings. I fear once the TDZ is clear we lose control. I hope before that happens city administration or Council will lay down some ground rules like these:
Return to the drawing board, bringing neighborhoods and community stakeholders into the process of determining the highest and best use of the Fairgrounds.
If the plan requires new fields, buildings or changes to existing buildings at the Fairgrounds, then figure out the long-term cost of operating those facilities.
Treat the taxpayers like the investors they are, disclosing the plan, budget and operating pro forma, detailing all studies, risks and beneficiaries.
Vest an independent committee comprised of City Council members and community stakeholders with authority to draft and review proposals from potential private developers.
Set rules to protect city credit and purse to be incorporated into requests for proposal, demonstrating how operating losses, capital maintenance expenditures and bond default will not become a taxpayer burden.
Agree not to issue bonds until an independent oversight board is appointed to administer the funds and Council approves a private developer that satisfies the above criteria.
The Fairgrounds redevelopment is an opportunity to improve the core of the city, but it also poses tremendous risks. Let’s proceed cautiously so this can be the start of something good and not another endless financial debacle.