Behind the Headlines — March 13, 2015


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Production funding for
“Behind the Headlines” is made possible
in part by.. The state of Downtown Memphis
with the outgoing head of the Downtown Memphis
Commission tonight on “Behind the Headlines.” [theme music] I’m Eric Barnes, publisher
of the Memphis Daily News. Thanks for
joining us. I’m joined
tonight by Paul Morris, President of the
Downtown Memphis Commission. Thanks for
being here again. Thanks for
having me. (Eric)
And Bill Dries, senior reporter
with the Memphis Daily News. So, you are leaving and we’ll
talk a little bit about that. I mean,
it’s by your choice. So, there’s no
particular news in that. But we thought it was a good
time to bring you on and talk about some of the
projects that are going on. And you’ve been
there five years. You started in 2008. (Paul)
I started in 2010. (Eric)
Excuse me. You were on the
board before then. That’s true. I had been a volunteer board
member for five years before that and had been chair
of the board in 2008. (Eric)
Okay. So, you’re chair of
the board in 2008. And the economy goes haywire. I mean, it’s the
great recession. Why would
you take that job? A job that is so real-estate
heavy that is about development. It’s about encouraging
developers to invest at a time when it was — the
economy was crumbling. Well, I guess if you’re
going to take a job like this, it’s good to set the bar low and
hopefully be able to exceed it. So, you know, taking the job at
a time when really not a lot was going on, not a
lot in the pipeline, it was really a challenge. But it gave me an opportunity
to work kind of within the organization to make
Downtown work better. And as the economy has
improved, the deal pipeline has increased
pretty rapidly. And so,
I don’t know. Some of the high
points for you of projects that you’re
most proud of? Maybe one project
or a few of them. Well, there’s a lot. The big things and the
small things I’m most proud of, the Chisca redevelopment
took a lot of effort. We redeveloped One Commerce
Square to help that building from going dark. We kind of had a Save our
Skyline campaign when I first started because we were really
in jeopardy of losing a couple of towers going dark including
the Morgan Keegan Tower, Raymond James and
also, One Commerce Square. And being able to develop and
save One Commerce Square from going dark as well as James
Lee House and Victorian Village, fixing sidewalks,
things like that, the Bocce Ball
Court in South Main or the Barking Lot dog park. Little things
and big things. Yeah, yeah. Bill? Paul, it’s interesting
that we’re coming out of the recession and we’ve
come out of it really, really slowly. But are you kind of surprised
that what we’ve seen in terms of One Beale and in
terms of the Chisca, which had been a deal
before the recession, are you kind of surprised that
it’s kind of like these projects have been on hold and now
they’re back again as opposed to a new crop kind
of replacing them? I’m not surprised
because although they’re back, they’re really in a
different iteration. They’re the same location but
One Beale is a really quite different project than it had
been when the recession killed that earlier iteration. The Horizon project really is
back in the same kind of form with the condo. I think one of the things that
surprised me about that one is that it is back
in the same form, to be a condo. Most observors in real estate
had projected that that would be apartments or
some other use. And it’s come back as a condo,
which is a testament to the fact that even the condo market
in Downtown is starting to come back. And the Horizon is the
building, for those coming in, maybe off, you
know, what is that? — Riverside Drive
that was finished, built and then stopped at about
80% or something like that. And it’s just been
dark since around ’07, ’08, ’09. I can’t remember
quite when it was. That’s about right. Yeah, ’08. And it went dark. Eighty percent complete. They even had crown molding in
some of the units before they went bankrupt
and dark since then. And now it’ll be done
in the next year or so or something like that? The new owners are investing
millions of dollars and they’re already selling condos. And then
the One Beale. Describe that a
little bit more for those. It would be right at the foot of
Beale Street kind of overlooking Beale Street Landing. And it’s George Carlisle, the
Carlisle Corp. doing what? Yeah. So, The Carlisle Corporation,
Gene and his two sons, are working on a plan. And right
now it’s a plan. And it’s
pretty far along. But it’s not a
done deal yet. So, I always like to caution
people not to get too excited until we
start turning dirt. But it’s a plan
to put two towers, one of them
30 stories tall. The other,
not quite as tall. And it will
have a hotel. It will
have residential. It will
have office. It will have meeting space
and it will have retail. And it would be right at the
corner of Beale Street and Riverside Drive. It would also have a parking
structure that would not only serve that but also,
Beale Street Landing, and the riverfront,
and Beale Street. We’ve heard a lot of talk about
the need for parking at Beale Street Landing
and the riverfront. And this project would
help address that, as well. And back to Bill. In terms of hotel rooms, we’ve
seen a lot of them come online. And you know as well as anyone
that those deals were just thought to be almost impossible
to finance during the recession. With rooms that we
have in the wings, some of them are
awaiting financing. Some of them
have financing. What does that do in
terms of conventions and meetings Downtown? Well, more hotel
rooms certainly help. But what we really need is more
hotel rooms under one roof and under common control. A big hotel, full service hotel
really helps move the needle on conventions and conferences in
a way that some of the limited services hotels you’ve
heard announced don’t. Now the One Beale project would
be a full service hotel with its own meeting space. And I think that would do a
lot to attract meetings and conferences to Downtown. It wouldn’t necessarily
do a lot to help fill Cook Convention Center. But it would help fill that
space and bring a lot of new people to
Downtown to spend money. And there’s been so much
discussion over so many years about what happens with
the Convention Center, whether there’s a
need for a new one. Would the growth in hotel rooms,
if you can get them under one roof or reasonably
close to each other, could that take on a life of
its own and maybe dictate a different location for
a convention center? I don’t think so. This is my opinion and not
speaking for others but I strongly believe that
we should not try to build a new
convention center. I think talking
about building a big, huge, new convention center like
Nashville is a waste of time. And it distracts us from things
that we can achieve to really help move the needle on
conventions and conferences in Memphis. I think that is reinvesting
in the Cook and making and upgrading that. And then looking at other
opportunities to have a product in Memphis that’s distinct from
some of these other cities who had these big mammoth convention
centers where you go and the only other people you
see have the name tags. And it’s kind of a
sterile environment. So, I really like the mayor’s
idea of perhaps looking at Peabody Place and
turning that in to a boutique
conference center. And then having that be a
complimentary structure to the Cook and then linking those
with a transportation mode down Main Street. I think that’s a more
achievable and actually a better competitive model for Memphis. You know, I’ve heard a handful
of developer’s say that some of the big empty lots, if
you’re coming straight Downtown, Union, before you get to
Autozone Park off the left, there’s a
big empty lot. And there are some
big empty lots near and around
FedEx Forum. So, despite all the good
things you’re talking about, there’s still some big, sort of,
I don’t know — blighted or just abandoned properties. Some of the problem
is people holding out for a convention center. They don’t want to
commit to anything else. Is that
your sense of it? And is there anything to be done
about those big blighted or just abandoned-looking lots? That raises
a good point. It reminds me of a story that
happened before I took this job. I was an attorney and I
represented the owner of the convention hotel Downtown. And it was
right next to Cook. And they had just negotiated
a deal to sell that hotel. And the new owner was going to
invest a lot of money in to that hotel, and expand
it, and enhance it, and even the
neighborhood around it. That deal
had been struck. It had not closed yet but
the contract was pending. And I was showing the
new owner around town. And all of a sudden, Mayor
Herenton announced that we’re going to build a
new convention center on the other side of town. That deal collapsed. And the point of that story
is that when political leaders announce big new projects, it
affects the private market and stunts investment and progress. So, I think, again, one of the
mistakes that some people make in Memphis is talking about
building a huge new convention center on the
other side of town. Because it keeps progress from
occurring around the convention center that we have. And Memphis made a choice to use
our funding vehicles that other cities in Tennessee have
used for convention centers. We chose to use it for
Bass Pro and FedEx Forum. And that’s our choice. And I think that
that’s good one. But it’s an
opportunity cost. We do not have
the T-D-Z vehicle, the Tourism Development
zone vehicle to fund the new
convention center. And that’s the primary way
to fund something like that. You mentioned Bass Pro. So, Bass Pro in
sometime this spring. I can’t remember
the date in May. May 1st —
will open. And that will do
what for Downtown? Well, it’s going to
bring millions of new people to Bass Pro. And the question will be how
many of those millions of new people will also be
Downtown Memphis customers. It’ll immediately provide jobs. It’ll provide revenue
and economic development in Downtown. But the question is and the
challenge really is to convert some of those Bass Pro customers
who are going to be driving in off the interstate,
coming down Jefferson, which is the main entrance for
Bass Pro and parking their car in the parking lot of Bass Pro,
to convert those customers to come back Downtown,
stay an extra day, visit Beale Street,
visit the things going on in Downtown Memphis. But it can help but
help Downtown Memphis. Right. I make this joke about
Bass Pro way too often, which is Bass Pro isn’t for me
needing a fishing shirt or a couple of lures and
driving Downtown. I might but I
don’t know why. I’m probably going to go to the
other Bass Pro or I’m going to go somewhere else. It is a tourist.. It is retail
destination tourism. Well, it’s an experience. You know, the renderings that
I’ve seen and the descriptions that I’ve seen.. And I live
Downtown with my family. We are going to love to go
to this place and go to the aquarium, go to the zip
line, go to the bowling alley, go to the restaurant. But the last thing you might
do is buy some fishing lures. I mean,
on some level. I’m not a
hunter or a fisherman. So, it’s hard for me to imagine
buying that kind of stuff there. People out of
town, they’re like, “How many fishing lures can
you fit in a place that big?” But go ahead. Well, I remember people a long
time ago saying they wanted to turn the Pyramid in to an
aquarium or some sort of tourist museum or something. And what I like about the
Bass Pro project is it’s not the government running
this museum or aquarium. It’s the private sector
investing millions of their own dollars to come in there
with help of public subsidy, for sure. But it’s the private sector
creating this experience and it’s a company that’s good
at creating this experience. It’s going to draw
more people to Downtown. I think one of the mistakes
sometimes we make is trying to have the government set up some
sort of tourist destination. And those don’t
work out as well. And the other point about Bass
Pro Shops is I believe that they sell more boats than just
about anybody else does in this country. And they’re on the
Mississippi River. So, some of this is going
to be the river experience. So, it looks just to me, not
really being schooled in this, as if they’re on the river that
people then are more apt to take in some of the river
experience that we have beyond Bass Pro Shop. Right. And I think that’s one
of the advantages we got, the Mississippi River. And we’re now starting to
embrace this river in a way that we haven’t for many
years as Memphians. With Bass Pro coming, with the
big river crossing next to the Harrahan Bridge and with Beale
Street Landing and some of the other projects that are coming
on the riverfront and then connecting that with some boats
to water taxis to the tip of Mud Island, I think that
once Bass Pro is open, there’s going to be a lot of
momentum for improving Mud Island
and the riverfront. And you’ll have millions of new
people who are going to get to come experience the river. And I think another thing that
Bass Pro points out is that we are the
intersection of three states. Downtown Memphis is not the
center of our city but it is the center of a
three state region. And Bass Pro is going to
draw some of the people from Arkansas, from Mississippi,
who may not come to Downtown otherwise. Let’s talk about that area south
where the big river crossing on the Harrahan Bridge is and a bit
about what is going on there. It really looks
as if development, residential development, other
kinds of development is about to jump Crump Boulevard and go
in to South Memphis proper. First of all, the boundaries
of Downtown Memphis Commission. Are you all
South of Crump? No, Crump is our
boundary on the south. (Bill)
Okay. In terms of the growth that we
see heading toward Crump though, because most of
that residential.. Is most of
it commercial? Most of it
is residential. Residential usually drives
retail and other commercial so we can
expect that to follow. I really think there’s a
lot more to fill in between South Main
district and Crump. So, there’s a lot more town to
fill in that area before you do jump Crump. But I do think that does
provide that opportunity to go in to South Memphis. And, you know, the big
river crossing and the Harrahan Bridge, the Main to Main project
has helped inspire the south junction residential project. It’s helped inspire the
eco-park in West Memphis that has
been discussed. And it’s helped inspire this
levee trail regional system. And it’s helped inspire a lot of
other projects including the new owners of the Horizon who
are motivated in part by the proximity of that
project to that trail. And French Fort, as well. Although French Fort,
as I understand it, is a lot more dependent
on the I-55 roundabout. Yes. So, French Fort will be unlocked
a lot when the I-55 roundabout comes online. And it will also hopefully
inspire us to be able to figure out a way to connect the trail
that is the Main to Main path to French Fort, which has to
go under those bridges. And there’s some
challenges in doing that. But it seems like a natural
connection of Riverfront to French Fort. And French Fort is right around
the Metal Museum area right at that strange sort of
intersection where, you know, you’re getting — you
can go down Riverside Drive or you can take a left and go
across over to Arkansas. And there will be a
giant roundabout there, which is
hard to envision. Well, that’s the plan. And, you know, it’s
a long term project. And we don’t know exactly when
it’s going to start or finish. But that
is the plan. And it’ll help create more of a
neighborhood feel for Riverside Drive instead of
being an extension of that
I-55 interstate. It’ll also help unlock what
is really now kind of a secret neighborhood over
there by the French Fort. It’s a wonderful
neighborhood on the riverfront. It’s got a lot of assets
including the Metal Museum. And let’s jump back to Bass Pro
just for a second on the north end of Downtown,
The Pinch District. When the
Tigers put.. Plenty of people
probably don’t remember this. But when the Tigers
played at the Pyramid, the first years when
the Grizzlies were there, the Pinch District
was more active. Maybe not vibrant but it was
certainly much more active. It has probably
taken the biggest hit with the Pyramid going dark. I mean, there’s very
little left up there. And I apologize to those folks
who are still running businesses and so on. What are your hopes? What are your realistic
hopes for the Pinch District as Bass Pro opens? I mean, the existing
businesses and Pinch District are hanging on. I mean,
Westy’s went there. You know, famous hot
fudge pie is still there. I go eat there and
the Red Fish Gallery. And there’s others. Alcenia’s. But the fact is a
lot of parking lots, a lot of empty
buildings in the Pinch. What the Pinch is waiting
on is for Bass Pro to open. And a lot of people are kind of
not knowing how to proceed with the Pinch because of we’re
all seeing what’s going on with Bass Pro. My concern though is the way
Bass Pro is structured and the way their business model works,
they really want to capture the sales within
the Bass Pro area. And right now, the way to get to
Bass Pro off the interstate is to come
in Jefferson. So, you don’t ever really go to
the — you don’t drive through the Pinch to
get to Bass Pro. And then when you’re there,
it’s not really a natural. The opening of Bass
Pro is facing south, not towards the Pinch. And it’s not really a very
natural connection right now. In fact, you know, as of March,
there is no construction on the bridge connecting. So, that’s the plan. The plan
that we approved.. (Eric)
Because it was taken down. There was a bridge
there, if people remember. You go from the Pinch District
side and cross over in to the Pyramid or you
can go down below. But they tore down
where the statues.. That was
all torn down. But the plan is to
put a bridge back. The plan is to
put a bridge back. That’s in the
approved plan. So, that’s essential. I mean, that’s essential to
unlocking the Pinch development. And so, we certainly expect that
to happen and look forward to that happening soon. But it is a real challenge for
the Pinch because I think a lot of people, including
some property owners, expect that when the
Bass Pro, you know, when Bass Pro opens, that their
property values are going to be so high that they’re going to
be able to flip it and make a lot of money. Again, it’s
speculators, in some cases, who are holding out
for much higher prices. Plus, you have the city who has
announced this plan to buy all the property in the Pinch either
voluntarily or not and have a master development occur. (Eric)
What is the status of that plan? The status of that plan, last I
heard from the city’s Office of Housing and
Community Development, is that the plan
is for the city, once Bass Pro opens, to go and
buy all those properties and issue an R-F-P to a
developer to develop them. Now the challenge
is in the meantime, while that doesn’t occur,
nothing else really can. Like, my organizations, we
kind of do more parcel by parcel development. We work with the private
property owners to develop their properties. We’re really not in a position
to give much incentives to help the Pinch because
our, you know, creator, the city, has a plan to
buy all the property. So, there is no incentive
to increase property value. Does the city
have funding? I remembered this plan. Does the city have
funding for that plan? Do they have to go
through city council? Is it an idea that
still has to be? No, the city does
not have funding. The plan would be for the city
to issue additional bonds based on the same revenue stream
that’s supporting Bass Pro. Legally before additional bonds
can be issued supported by that same revenue stream because of
the bond documents say that Bass Pro and the rest of
Downtown sales have to meet certain metrics overtime. And if those metrics are met,
which are relatively ambitious metrics, then the city’s
able to issue more bonds, again, backed by the
city revenue streams, not on property tax streams. So, they can allow
them to issue new bonds. All that being said,
I think we’re ways off. Which, again, gets back to your
issue of when government puts out a plan that isn’t
fully baked or fully executed, it freezes
development. There’s a cost to it. And it’s not that
you shouldn’t do that. I think
government should do that. But it should also recognize and
make sure the public understands that there’s an
opportunity cost. When the government
comes in there and says, “Hey, we’re going to redevelop
the Pinch but yet we don’t have “the funding yet, we don’t have
the plan yet but it’s going to happen one
day down the road.” Well, in the meantime, nothing
happens and it prevents the private sector from
kind of doing what the private sector does. Would you say this
if you weren’t retiring in a few months? I have said this in my
board meetings many times and when
people ask. One of the great
things about my job, and I want to put out a plug for
how awesome my job is in case anybody else is looking, because
we’re going to be hiring pretty soon, I don’t
report to the city hall. I report to an
independent board. Now that board is
appointed by two mayors. But we are a joint
city-county agency. So, Mayor Luttrell appoints some
of my board members and Mayor Wharton appoints some
of my board members. But I can tell you
my board members are independent thinkers. They’re not, you know, calling
one of the mayors to find out how they
should vote on things. I’m not in the bureaucratic
chain of command at city hall or county. Interesting point. We’re about five
minutes left, Bill. Alright. And on that note, let’s talk a
little bit about some advice that your father, Jack Morris,
gave you when you first thought about becoming
involved in this. It wasn’t advice that
you necessarily took. But he told you something
about the balance between civic involvement and where you
get your paycheck from. So, when I was considering
applying for the job that I’m in now, I had been a volunteer
board member and very active with the then Center City
Commission and enjoying that. But I was a
private sector lawyer. And my dad, I spoke to him about
wanting to apply for this job. And he discouraged me from
doing that saying basically, “Paul, I want you to get very
heavily involved in community service, ” as he
has in his life. “But I want you to always get
your private — want you to get your paycheck from
the private sector.” And his advice was you can do
more good for the community getting your paycheck from the
private sector and finding ways to give back on a
volunteer basis. And that’s how he has always
patterned his life and done a lot of good
community service. So, he had kind of discouraged
me from taking this kind of quasi-public job. So, after doing that though,
you decided you weren’t going to make a career out of
this in that position? Right. I did apply for the job and
it wasn’t a sure thing by far. There was a lot of really
good applicants for the job. But once I did get the job
and while I was applying, I told the board that was hiring
me that I was not going to make a career out of this and
certainly wasn’t going to retire from this job. But I wanted to come in,
spend some time with a sense of urgency to try to get some
things done and then get back in to the private sector. Does having a time
limit of sorts on this, it’s also allowed you to really
speak your mind more so than someone who is looking for
a long career out of this. (Paul)
I think that’s right. I mean,
absolutely. I feel like I’ve
always spoken my mind. I try to be diplomatic
where diplomacy is appropriate. But when I think something is
not good for the city or not good for Downtown, I’ve always
felt free to speak my mind. And part of that is that I knew
I wasn’t going to be here for a long time and eventually I would
go back to the private sector. I think there is
something to be said for that. Let me race
through somethings. We’ve got about four
minutes left here. We’ve talked about some big
projects that Bass Pro and entertainment
projects, Beale Street, FedEx Forum. Some things
have really worked. We’ve talked
about the housing in, you know,
really kind of.. If people haven’t driven through
what’s going on on South Main, it’s pretty
remarkable. What has not worked
so well is office space. It’s been a mixed bag
over the last five years. Some successes
we’ve talked about. First Tennessee re-upped. Raymond James. But there’s really, I
mean, on some level, a second and almost some would
say primary central business district in Memphis, which is
around the Ridgeway I-240 loop. Is that.. Do you look back at that and
feel like we should have done something different to
stop that migration? Well, it is discouraging that
our biggest successes in the office sector over the last
five years are retentions and not new. Now in my first
year on this job, I spent probably half my time
working on a deal to recruit Pinnacle Airlines Downtown and
felt pretty proud that we got Pinnacle and this new big
company with hundreds of new employees to fill up an
office building Downtown. And then within
a year, of course, their stock had tanked
and they went bankrupt. So, that was obviously
incredibly discouraging. But we did. It is discouraging and in
terms of what we should do differently, you
know, over the next 5, 10, 15 years, I actually do
think that there’s a movement towards Downtown
office not only in Memphis but across
the country. Those out East brand new office
buildings won’t be brand new in 10, 15 years. And they will
still lack character. And Downtown will still be
the heart of the University. The South Main.. The Main Street
demonstration project.. I mean, Main Street
towards Beale Street, a lot of
development. There was a
demonstration block. Businesses that
went in and so on. There were a couple of buildings
though that are still blighted that you’ve not been able to
— that no one has been able to move those owners. Does the city need
more tools, better tools to move
property owners? Yeah, I think so. There’s a balance. I mean, in America, property
owners have a lot of rights. And that’s
appropriate. But unfortunately, a lot of
property owners who are either speculators or dreamers that
cannot develop their properties, they’re hurting the
surrounding neighborhoods. So, they’re hurting other
people’s property values. And that’s been a
really discouraging.. We’ve had a lot of great
success with South Main and other things. But and we’ve had a lot of
success remedying blight. We’ve got a lot
of blight remedy. But there is
still a lot of blight. There’s still a lot
of empty office space. There is plenty of work
for my successor to do. Last couple
of questions. People talk
about grocery store. I heard there was a commercial
gathering recently where someone talked who was optimistic a
grocery store in Downtown in the next year or so. Are you optimistic
that might happen? I am. A couple of the white whales
we’ve been chasing for a long time are a
grocery store. And, of course, we have
grocery stores Downtown. Miss Cordelia’s. A larger full service grocery
store is in the works now. Whether it’s
actually going to happen, I can’t
guarantee. But that’s in the works,
as well as a movie theater, which is another thing we’ve
been chasing for quite a while. And Central Station, what’s
going to happen down there? There’s development
in the works potentially around the
Farmers’ Market. What might happen? It’s very exciting. Central Station is a cornerstone
of the South Main district, which really extends from the
Orpheum to Central Station. It’s got over $200 million
of already announced and ongoing projects. Not included in that figure is
the redevelopment of Central Station, which could
include residential, retail and other kind of
amenities that have not been announced yet. But it’s very exciting
to see Central Station further redeveloped. A hotel is
down there? The projects, the particular
uses have not been announced. But, you know, I would see
the South Main district a great place for a hotel. Alright. Thank you
for being here. Appreciate it. Thank you, Bill. Join us again next week. Thanks. Goodnight. [theme music] (male announcer)
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