April 09–NASHVILLE — The state approved Memphis’ request for a tourism development zone for the 120-acre Graceland campus Thursday, and construction of a new hotel and entertainment center will start soon, Graceland executives said.
The next and final public step in the process is Memphis City Council approval of a 5 percent tax surcharge on purchases within the zone to help pay for the planned improvements, estimated at about $135 million.
The state legislature established tourism development zones in 1998, allowing “qualified public use projects” like convention centers and major tourist enterprises to use a portion of sales tax proceeds collected on products and services within the zones to pay for the projects and improvements.
Graceland plans to build a $95 million, 450-room conference hotel on the mansion side of Elvis Presley Boulevard and a $30 million to $40 million entertainment complex across the street. The city and the state are spending $43 million in various projects to improve Elvis Presley Boulevard between Interstate 55 and the Mississippi state line.
Thursday’s approval by the State Building Commission was unanimous, after a brief presentation on the project by the lawyer for the project, James B. McLaren Jr. of Memphis. Elvis Presley Enterprises President and CEO Jack Soden was present.
“This is a true public-private partnership,” McLaren told the commission. He said there is no city, county or state governmental liability for any of the debt the project will incur, and the portion of sales taxes earmarked for schools will continue flowing to schools.
Soden said construction of the hotel should start in a couple of weeks and the complex across the street a few weeks later.
“We’re ready to go. There’s another vote from the City Council on the tourism surcharge but these are all the major pieces. We’re practically out in the field with our shovels waiting for these last few pieces.”
The entire project should be completed and ready for visitors by the fall of 2016, Soden told The Commercial Appeal.
“The hotel is about a 15-month proposition, so if we can get going pretty soon, we have a shot at the summer of ’16. And the new visitor complex on the west side, if we can get going, will be coming online only a few months after that. So hopefully fall of ’16 for the whole thing.
“This process — and it’s important that it goes through this complex process — has given us lots of time to plan. So we’ve got a real good blueprint for what to do and in what order to do it,” Soden said.
He described the 5 percent surcharge that will be paid on purchases within the 120-acre enterprise as “like a self-imposed internal surcharge that allows our visitorship to help pay for the new investment. And it’s just on our campus.”
State Architect Peter L. Heimbach said the Graceland TDZ is only the seventh to be approved across the state, including the Pyramid-Pinch District TDZ in Memphis. TDZs have also been approved in Knoxville, Chattanooga, Pigeon Forge, Sevierville and Nashville.
Memphis applied last year for state approval of a third TDZ in the city, for a proposed redevelopment of the Fairgrounds, but that request has stalled as city and state officials haven’t reached agreement on details.
Follow more politics and policy coverage from the InforMemphis team on Twitter and Facebook.
