News Column

Financial woes spur plans for change on Memphis riverfront

January 27, 2014

By Tom Charlier, The Commercial Appeal, Memphis, Tenn.

Jan. 27 --Saddled with new expenses and a decline in funding sources, officials say the Riverfront Development Corp. faces six-figure budget deficits for years to come unless the city concocts a new plan for managing parks and amenities along the Mississippi River . In recent weeks, representatives of RDC, the Downtown Memphis Commission and the administration of Mayor A C Wharton have been holding talks aimed at forging a new long-term management plan for RDC's facilities, which include 10 riverfront parks and Mud Island River Park . The discussions are expected to produce a proposed three- to five-year operating agreement that can be presented to City Council by early March, Memphis CAO George Little said late last week. The proposal could be coupled with a request for the council to help fill RDC's projected $377,000 operating deficit for fiscal 2014, which follows a $444,000 shortfall last year. It's too early to say what the new agreement will entail, Little said, although he ruled out options such as closing Mud Island . The committee has studied possibly merging some RDC functions with those of the Downtown commission, officials said, and has looked at ways to generate more revenue. "There simply isn't enough funding to support (RDC's) mission," Little said. "The current model simply is not sustainable." RDC president Benny Lendermon agreed, saying the city needs to define how it wants the riverfront managed -- and how to pay for it. "We do all need to get on the same page," he said. RDC is a city-subsidized nonprofit entity that has managed the riverfront under a contract with the city since 2000, when it took over for the old Memphis Park Commission . During that time, RDC has spent more than $100 million maintaining and improving the parks, managing concerts and other events, and constructing amenities that include Beale Street Landing , a walkway on the historic Cobblestone Landing , a median on Riverside Drive , a traffic roundabout in Harbor Town , a pedestrian bridge and plaza near the new University of Memphis Law School , and a sculpture memorializing local hero Tom Lee . Little and RDC officials say the arrangement has saved the city money on maintenance work while providing for the enhancement of the riverfront. But many of the agency's projects have been plagued with cost overruns, delays and controversy. The $42 million -plus Beale Street Landing , for instance, has taken more than twice as much time and money to complete than projected. Another major RDC proposal, the refurbishment of Cobblestone Landing , has languished for years amid bureaucratic wrangling. The RDC's most grandiose initiative -- a land bridge to Mud Island -- was shelved altogether. RDC also has faced criticism over its executive pay packages, including more than $230,000 a year received by Lendermon, $121,000 -plus for a director of communications and $105,000 for a part-time vice president of project development. Little said that overall, RDC "has done a good job" overseeing the riverfront. "The city has no interest in taking back over the management of the riverfront parks," he said The problem, say RDC and administration officials, is that recent changes and developments have eroded the agency's finances. The city's annual subsidy -- originally $2.6 million , the amount Memphis had been spending on the riverfront facilities until 2000 -- has been cut by nearly $300,000 by the City Council . In addition, RDC has lost some key revenue sources, including $100,000 in yearly proceeds from a parking lot, to make way for the Bass Pro Shops development at the Pyramid. Meanwhile, RDC faces new expenses, including $125,000 annually for water, which until a year ago it had received free. The agency also must pay to operate newly completed Beale Street Landing even though a major revenue stream there -- a docking fee for each passenger on the riverboat American Queen -- has been diverted to pay off a loan the city made as part of a package that lured the vessel to Memphis . Lendermon said that without the reduction in the city's subsidy, the added cost for water and the loss of parking lot revenue, "we actually make a profit." Instead, the agency has been forced to take $300,000-$400,000 a year from its reserves to cover shortfalls. "They'll be pretty much depleted by the end of the year," Lendermon said. Little said there are no plans to seek restoration of the subsidy cuts. "I think it would be a hard-sell to ask council for more money to do essentially the same thing," he said. A key focus of the recent discussions has been Mud Island , which Little described as another costly drain on the RDC. Although attendance has risen significantly with the elimination of entrance fees in recent years, the riverpark hasn't generated enough other revenue to cover costs, he said. The park will remain open, Little said, but changes are needed. "The only thing we're not considering is casinos," he said, noting the legal barriers to that option. "Short of that, I think all other possibilities are open to discussion." ___ (c)2014 The Commercial Appeal (Memphis, Tenn.) Visit The Commercial Appeal (Memphis, Tenn.) at www.commercialappeal.com Distributed by MCT Information Services


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Source: Commercial Appeal (Memphis, TN)


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