Peabody Place has been vacant for the better part of four years, though it didn’t officially close down until 2011. The lack of activity at the site is a sad reminder of just how isolated downtown is for the vast majority of Memphians, despite the huge population growth in the past 15 years or so.
Who could have imagined…in 2001 when it opened, that people’s buying habits would change so swiftly, or that the folks who by and large moved downtown would be on the bleeding edge of that change. The mall wasn’t a bad idea for its time, but it couldn’t withstand the 1-2 punch of a deep and wide recession, along with changes in the way people buy things.
Since its closing there have been rumors that the building would be re-developed by Belz Enterprises into a combination of suites and convention space. But with demand for downtown hotel rooms flat, and a local convention business that’s anything but robust, no solid plans have been announced.
There’s no question the site SHOULD be developed into something. The question is what?
Mayor Wharton thinks the answer is…a convention center.
Is that a good idea? Lets start from what the city wants/needs first and work backwards.
There are several schools of thought as to what the city’s convention business needs. Spend a little time in the Cook Convention Center and your first instinct will be…a modern convention center.
But that modern space need not be something along the lines of the $650 million dollar Music City Center in Nashville. In fact, we don’t have the hotel space downtown, or just about anywhere else to utilize a space that big. Increasing the number of rooms in the downtown area will take some time, and a track record of low vacancy rates isn’t helping. Last time I looked, occupancy downtown was around 60% which is a little below the national average, but the Average Daily Rate (ADR) was only about 74% of the national average. So until there’s a consistently a higher occupancy rate, causing an increase in the ADR, developers aren’t exactly going to flock to downtown Memphis.
What we have here is the classic “chicken/egg” scenario that is more frequently used as a rationale for inaction in this city than any other place I’ve lived.
Truth is, hotels aren’t going to flock to downtown unless there’s a good bunch of somethings (attractions) that are going to inspire confidence…and ladies and gentlemen, the Cook ain’t it.
But all is not lost. Any of the three options under discussion: revamping the Cook, building a new Convention Center, or turing Peabody Place into a convention space could crack the egg and pluck the chicken. But if the goal is increasing hotel capacity, the Peabody Place proposal has some competitive disadvantages for developers.
I’m not one of those that’s 100% against the idea of a public-private partnership as a general statement. They can sometimes work out. The public gets what they need (an amenity or service) and the private business gets what they long for (a revenue center).
That said, if the idea of expanding the amount of convention space is part of a long-term plan to also increase tourism in the city, and, in the process, increase the number of rooms, occupancy rates, and ADR, then building your space on land that is controlled by a large hotel operator may not be what you want to do.
The problem is, it creates a competitive advantage for the hotel. Since they’re right there and they can bundle services, it means other hotels are left in the lurch.
I’m not a hotel developer, but I wouldn’t want to go up against that.
And the Peabody has a history of using its current competitive advantage as a blunt object.
If you want to do a meeting at the current Peabody facilities, and use an outside vendor for A/V and all sorts of other things, the Peabody will try to add a 10% surcharge. They have an in-house vendor…A/V powerhouse PSAV.
I’m not dogging on PSAV. They’re a fine company, and I’ve worked with them (as a client-side production coordinator) on several occasions.
But there are local A/V vendors as well, and if the public is going to lend its dollars to a venture such as this, local companies that hire local people should have a fair shake…without the threat of additional cost to their clients.
My memory if the inside of Peabody Place is a bit hazy, but the ceiling is mostly glass, and there’s a huge atrium area, that’s uneven, and concrete, which means it will have to be leveled.
These aren’t deal breakers, but there are structural concerns that have to be dealt with for a Convention space, that a atrium centered mall doesn’t have to worry about.
More and more conventions are increasing production…even for small events, which means how much weight a structure can hold, and how large of a distance between the beams is really important. Again, this is not “unfixable” but something to consider before you get too excited.
Then there’s this quote from Mayor Wharton about some kind of “niche market” he envisions:
Most of your traffic when it comes to conventions and meetings they’re not the 15 to 20 thousand people, its the 300, 400, 500…that would be a niche market for us…
Now it’s true, the 10k+ convention market is small and competitive. Its also true that most conferences are less than 1000 people. But there are some real problems with Mayor Wharton’s premise.
First, no one plans to focus on the small market. They make contingencies…like air walls, and other separations, much like the Grand Ballroom at the Cook, which I’ve seen used for as few as 150 to as many as 1500+ people.
Second, any space should represent growth from the Cook. Peabody place is 300,000 sq. ft. The Cook is 350,000. There’s no question that adding Peabody would add much needed space, but it doesn’t build on what we lack. If anything it would merely add to what we’re already not utilizing.
Finally, Peabody Place is land locked. There’s no room to grow in the future to accomodate new meetings, and the growing size of meetings that we currently host.
The AutoZone meeting that happens each year uses every usable square inch of the Cook…and then some. Adding space for more 300-500 person meetings isn’t going to help that convention, or others like it that have outgrown Memphis in the past several years, at all.
As I wrote back in October, any work to expand our convention business in the city should focus on bringing spaces together that can work in tandem.
There’s no shame in building something in the 600,000 sq. ft. range, or even expanding the Cook to that size (so long as it includes more ways to get into the exhibit halls without an elevator).
And if we did build a new building in that 600k range, we should make sure we have the space to expand…just in case.
Because, at the end of the day, we need to work to bring more hotel rooms to Memphis so we can compete for other things, like an NBA All-Star game, or a political convention or whatever the next opportunity holds.
As for Peabody Place, if Belz wants to re-develop it into something like Mayor Wharton’s vision, they should go for it. Its not like they weren’t thinking about it already.
The reality is, there’s a reason Belz Enterprises hasn’t already turned Peabody Place into the very thing Mayor Wharton is proposing…and that’s because its just not feasible for them at this time…and that doesn’t make it look any more attractive as a public project either.
schadenfreude: pleasure derived by someone from another person’s misfortune.
So I know just about everyone is talking about the NRA’s crazy town response to the Newtown shootings. I think all that needs to be said about the speech delivered Friday is nicely summed up here.
Quite frankly, I’m shocked that anyone was shocked by that announcement. LaPierre has been spouting crazy for the NRA since 1991. Same song and dance, over and over again. It ain’t about gun ownership…its about gun sales. Manufacturers pay the bills at the NRA. Don’t forget it.
So aside from providing a distraction, the NRA event was irrelevant. Unfortunately for everyone, a distraction was needed, in the wake of the massive failure to herd feral cats, some called the display “a clown show”.
It’s important to remember is how we got here, where it started and who is responsible.
November, 2010 – A wave of of GOP wins in Congressional races, led by 40 candidates claiming “Tea Party” affiliations, leads to the composition of the US House of Representatives flipping from 255 Democrats to 242 Republicans.
August 2, 2011 – In the wake of a contentious battle over the debt ceiling limit, the Budget Control Act of 2011 was passed with bipartisan support. The bill raised the debt ceiling and put in place a series of deep budget cuts and tax increases if the Congress could not reach an agreement.
66 Republicans voted against the deal, which would not have passed without Democratic support.
August 5, 2011 – In the wake of the vote on the Budget Control Act, Standard & Poor’s downgraded the US Credit rating stating concerns with the current state of political affairs in the Congress.
February 2012 – Fed Chairman Ben Bernake coins the term “fiscal cliff”.
July/August 2012 – On July 25th the US Senate passed a proposal that would have avoided the tax increase portion of the fiscal cliff. The proposal was rejected by the House on August 1st.
November 2012 – Elections result in more GOP moderates losing. Democrats gain 8 seats in House. Incoming makeup of the House: 201D – 234R. Incoming makeup of the Senate: 55D – 45R
December 2012 – Negotiations between Speaker Boehner and President Obama net a compromise. Said compromise not brought before the House. Boehner’s bill pulled for lack of support. The House did pass a bill dealing with spending cuts, however that bill has little chance of passage in the Senate and faces a Presidential veto.
This list is hardly exhaustive, but mentions most of the highlights. Had Republicans not tried to make political hay over increasing the debt ceiling, we wouldn’t be where we are today.
Now I want to be very clear here: while I do get some pleasure from the outright #FAIL that was the Speaker’s effort to pass a watered down version of what he and the President were negotiating, I also understand that a failure to act by the end of the year will have some serious consequences for regular folks. Those consequences will be immediate for all of us, though many of them will have a limited impact.
If they fail to act, the payroll tax cut will disappear, the Bush era tax cuts will disappear, and some pretty stiff spending cuts that no one seems to want will be enacted.
What does this mean to you? Well based on the median household income you will see about $1000/yr less as a result of the payroll tax hike, about $1500 less as a result of the income tax hike, and a whole lot fewer services.
Interestingly, if the Obama proposal were to pass, a household making the median income would see a tax DECREASE of about $225/yr (payroll and income) rather than the increase of $2500 House Republicans seem to favor in the wake of their inaction. You can see how the fiscal cliff and the Obama proposals would impact your income here.
(Note: The tax calculator is provided by the anti-Keynsian, pro-business group The Tax Foundation. They bear responsibility for any inaccuracies.)
The financial impact of failure for household incomes is pretty dire. Considering that inflation adjusted incomes have been flat since 1967 for 80% of the population, losing $2500 for a median income represents a nearly 5% hit in real purchasing power. That’s not going to be good for an economy that is just really starting to emerge from weakness. Add to that increased instability from a potential market panic and Joe 6-pack is going to take a huge hit.
Investors know this. They make lots of money knowing this. And while we haven’t seen an increase in incomes to rival the increase in markets (1967 Dow was 825, 2012 Dow was 13190.84 as of the closing bell on Friday, a nearly 1600% increase), the panic that will ensue due to uncertainty if the fiscal cliff is not avoided will hurt average Americans more than investors, who will certainly lose wealth, but not much standing.
Investors have more ways to make money in the face of a market panic that regular folks don’t, including betting on failure. This kind of risky bet is usually only played by the wealthiest individuals and huge investment houses. It may seem counter-intuitive and to fly in the face of what we consider to be patriotic, but remember, in the church of the almighty dollar, anything goes that makes you rich.
Plenty of folks profited from the pain of the Great Depression and the more recent “Great Recession”. There will be winners if a huge market panic ensues come Jan. 2 as well.
Joe 6-pack won’t be one of them, so don’t even think about it.
I feel confident that a solution won’t be found before the end of the year. The House Republicans don’t seem to have the will to give any ground, and in their disarray they have given their Democratic counterparts some resolve to stand their ground. With 201 incoming votes, it will take just 17 Republicans to pass a Democratic measure…should it reach the floor. That seems like a possible scenario now that people are starting to point to conservative recalcitrance as the problem.
The Senate has already passed a bill, which was rejected by the Tea Party led House in August. The House could take the measure back up if they chose to. I can’t imagine that happening before the end of the year. I just don’t think the votes are there before the end of the year.
This means that a market panic is almost a certainty come Jan. 2. The next Congress convenes the next day. We’ll see what they do, but I’m putting my money on passing something like the Senate proposal and dealing with the spending side later…probably right before the next debt ceiling vote which will need to happen before February of 2013.
In the current climate, I just can’t see this leadership actually…you know…leading.
Sen. Diane Black, whose staffer Sherri Goforth sent an email containing a racist image was on CNN today. Yesterday Newscoma broke the story, and with the help of just about every Tennessee blogger, it went national. Below is the video from CNN.
Andy Card, former Bush Administration Chief of Staff, and one of those people who helped screw up the country so bad that it’ll take the better part of the NEXT decade to fix it, is criticizing President Obama for not wearing a jacket in the Oval Office.
Are you serious?
Well, late tonight (actually it’s about 3:30 am) pictures surfaced of President Bush Jacketless in the Oval Office, as well as several of his predecessors.
I understand that there is a level of formality that surrounds the Office and the Presidency in general. I understand why that is important. Part of the formality lies in respect for the office, and the officer. Part, has more to do with a respect for the authority that comes with the Presidency. But the truth of the matter is, a suit jacket, or a tie are mere symbols of formality, not actual formality.
The former Administration may have “played at” more respect for the office, by keeping a relatively strict dress code in the White House. Unfortunately, it’s only a “play” at respect, because despite their dress, their ACTIONS did more to harm this country than anything a jacketless President could ever hope to muster.
Seriously Andy, crawl back into your hole. You and your Neoconservative buddies are like the 4 geeks in the Alltel commercials…ALWAYS WRONG.
Andy, it’s you, you’re the Ding Dong.
If you travel a lot, like me, you’ve been hit as hard, if not harder by the massive increase in fuel prices. Nearly everything I do, from flying to shipping thousands of pounds of equipment from one end of the country to the other, to driving all over the Mid-South, has been negatively affected by this increase. Thanks to the following report from Countdown this evening, now I know why Oil has been rising through the roof, and it all goes back to Enron.
Watch the clip…
Essentially, we’re getting gamed the same way California did by Enron. The difference is that the effects of this deregulation condition are now spread not only throughout the US, but the world, all in the name of profit for a few people. Here’s an article from the 11/10/2001 edition of theNY Times about deregulation in energy markets and the administrations inability to keep up with the challenges it presents. My favorite quote:
Earlier this year, the federal energy commission asked for comments on whether it should tighten scrutiny of dealings between natural gas pipelines and energy-trading shops owned by the same company.
Enron wondered what all the bother was. ”Would stricter rules prevent real affiliate abuse that current rules do not,” it wrote in a regulatory filing, ”or would they instead merely restrict the activities of some of the more successful participants in the marketplace?”
Stricter rules? How would that help?/snicker
So now that we know who is screwing us and how they’re doing it, will anything happen? I doubt it. This is not a topic that the news media knows how to report to the regular folk. It doesn’t involve anyone’s wife, or some kind of personality dispute, or any kind of candidate back and forth. It’s not something pulled from the pages of a supermarket tabloid, or from the mouth of a felon, on the lamb that has rented space in DC.
Even the path to enacting this horrible mess is more than a little sketchy.
The original bill from the 106th Congress HR5660 failed, but was included in a conference report to HR 4577. This bill passed by a large margin with every Democratic member of Congress from the Tennessee delegation; Tanner, Clement, Gordon and Ford voting for it’s passage. In their defense, HR 4577 was an appropriations bill for the Dept. of Labor and HHS, and was supported by nearly all of the Democratic delegation (vote). Only 9 Democrats voted against the measure with 42 not voting. The bill was signed by President Clinton on Dec. 21, 2000.
The hard truth of the matter is that even though we know how we’re getting screwed, it doesn’t mean we can easily stop getting screwed, or that the reversal of this portion of the law will end up with the instant lowering of prices, as mentioned in the Countdown piece. Further, should Congress take this up, it would most certainly get vetoed by the President, who seems hell bent on drilling from here to Narnia and back for all the oil that may or may not be there, selling us a bag of beans for all our possessions and maybe even our soul in the process.
The solution, for this and most of the other problems that face America financial services is re-regulation of areas that we gave up to the Republicans in the 80′s and 90′s for the hope that we Democrats would not get eviscerated in the next election by looking more Republican. It is a hard left turn away from the litany of capitulations that set this condition up, a left turn that is long past due.