Friday, June 30, 2006

IRS Form 990: 2005-2006

Here is the RDC's IRS Form 990 for the fical year ended June 30, 2006 [PDF, 961 KB].

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RDC financial report, 2005-2006

Click here for the RDC's audited financial report for the fiscal year ended June 30, 2006 [PDF file, 2.8 MB].

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Tuesday, June 27, 2006

On Shaky Ground?

Part of new Mud Island condos sit on landslide site

Memphis Daily News [link]
by Andy Meek

The development team that's building Flagship Condominiums on Mud Island still is tweaking plans for the project, which will be a continuation of the award-winning Harbor Town community.

But the finish line is getting closer. And once that happens, Flagship will have snatched up some of the last available waterfront on Mud Island, property near the Auction Street bridge that was once thick with trees. Part of the land also was the site of a massive landslide in 2002 and has been at the center of a variety of development schemes over the years.

Landslide victory

The main concept for the Flagship project - four buildings with at least 45 units - is well on its way through the approval process. Over the past few weeks, a flurry of changes and amendments have been made to the plan,which the Memphis and Shelby County Land Use Control Board recently approved and which first comes before the Memphis City Council this week.

The condos are going up on 2.65 acres at the southeast corner of Island Drive and Auction Avenue, on a small triangle of property across from the three-story Arbors Apartments complex in Harbor Town. On the other side, Atlanta-based Beazer Homes plans to build 175 townhomes on 19 acres that developer Kevin Hyneman recently sold to the company.

Hyneman also sold about half the Flagship property to a group that includes developer Henry Turley. Current plans for the Flagship project call for touches such as a decorative fountain near Island Drive, a pool and perimeter landscaping.

The project, which will be spread out over several phases, will feature mostly brick units and such amenities as semi-private elevator access.

"It should be nice," said attorney Ronald Harkavy, who's representing the developers. "Anything these guys have done out there has been nice, and they've tried to make others do the same."

Foundation of sand

This afternoon, the City Council will set the date for a public hearing on the Flagship development, which was part of 21 acres of woodsy land Hyneman bought for about $2.6 million in 2001.

"Basically, what the (LUCB) already approved is where we're heading," Harkavy said.

The condo units along Island Drive will range from 1,800 to 2,700 square feet. The units along Auction Avenue will range in size from 1,500 to 2,200 square feet.

The sale and transformation of the small Flagship property marks something of a milestone in Hyneman's career. Along with the larger tract Beazer is developing, it brings to a close Hyneman's involvement in development on Mud Island, where he's built close to 1,000 homes.

One of the most talked about episodes involving Hyneman during that time was the 2002 landslide, which took out a large swath of riverbank.

The landslide was the result of piling excavated dirt on the property that had been brought over from the FedExForum building site, the weight of which ultimately put too much strain on the harbor bank. The landslide occurred on the northeast side of Hyneman's 21-acre property, including a small portion of the Flagship site.

It happened days before a sale of the property was scheduled to go forward with a group that included the Riverfront Development Corp. and developers Turley and Jack Belz.

Since then, the entire site has been the subject of various real estate proposals. Don Jones, a city-county planner, said plans for the Flagship development are still in flux.

"They were approved by the LUCB for 45 condo units, but they want to bring that back up to about 52," he said. "They would also like to have one of the buildings permitted up to five stories."

When it's finished, Flagship Condominiums will enhance an already much-sought-after lifestyle on Mud Island.

Star-spangled home

Today, residents like Dianne Champlin put a premium on the amenities to be found there, where homes are set among well-manicured communities, pedestrian walkways and neighborhood businesses like Miss Cordelia's, a small grocery store with an eat-in deli.

"We love the outside," said her husband, Brad, of the couple's Harbor Town home, "Blithe Spirit." "This is where we have breakfast in the morning. Dianne and I will sit down here with a cup of coffee and a newspaper."

Gesturing toward the panoramic river view, he said: "Isn't that fabulous?"

Among the other recent additions to Mud Island, there's Harbor of Health, a new wellness clinic Dianne said she's eager to try out once she and her husband move to their riverfront home full-time. The 4,500-square-foot home includes features such as a private elevator and handicap accessibility, meaning doorways, for example, are tall and wide.

Dianne also is happily anticipating the Fourth of July, which she and her husband will celebrate with a few friends at their riverfront home.

"This will actually be our second Fourth of July here," she said. She recalled the celebration last year, when families packed the riverfront for picnics, strolled along the water and children played with festive holiday sparklers.

Construction work, meanwhile, remains a constant feature of the quiet life enjoyed on Mud Island by people like the Champlins. Public artwork, for example, soon will be added to a newly built traffic roundabout on Mud Island.

"And I think you should see something happening in the very near future to the south of (the Flagship) site, also," Harkavy said.

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Monday, June 26, 2006

Finding Safe Harbor: Beale Street Landing to lay anchor soon

The Daily News [Link to article]
By Andy Ashby

The Riverfront Development Corp. (RDC) has absorbed $500,000 of city budget cuts and appears ready to move ahead on its largest project to date, the $29.3 million Beale Street Landing.

When the Memphis City Council approved the city budget June 6, the RDC received $2.1 million for its operating budget for fiscal year 2007, down 18 percent from $2.6 million last year. The RDC's total operating budget is projected to be $4.2 million, down slightly from last year's $4.3 million.

The RDC was able to fill the city funding gap by reducing expenditures and through a projected revenue increase stemming from the operation of Mud Island River Park. The park includes the 5,000-seat Mud Island Amphitheater.

From disconcerting to concerts

When the RDC took over the amphitheater's operations from the city in 2000, the concert venue made almost no money, said RDC president Benny Lendermon. Last year, eight concerts netted more than $200,000 in profits. Next year, the RDC has a minimum of eight concerts planned, with a potential for more.

The RDC also will not offer raises to its 35 full-time employees next year.

"The normal citizen's experience on the riverfront will not change through these budget cuts," Lendermon said.

The RDC also adjusted the funding structure for its Capital Improvement Projects (CIPs), spreading the city's payments over three years to lessen the impact on each year's budget. Previously, the city was funding Beale Street Landing over fiscal years 2007 and 2008.

Now the money is going to be spread across three years, with the RDC receiving CIP money in fiscal years 2007, 2008 and 2009.

Beale Street Landing, which features a floating dock and five islands set at varying heights along the Mississippi River, is the biggest project on the RDC's CIP budget.

The millions at high tide

In last year's CIP budget, the project would cost the city $7.2 million in fiscal year 2007 and $12.7 million in fiscal year 2008, with $9.2 million in reprogrammed money, which is state and federal funding.

Under the new CIP budget, the city will pay $2 million in fiscal year 2007, $9 million in fiscal year 2008 and $7.8 in fiscal year 2009. The project now will get $10.5 million in reprogrammed money, as more state and federal funding has been found since last year, Lendermon said.

Once completed, Beale Street Landing will consist of five islands set at different levels of a terrace along the bank of the river and will be connected by bridges. Some of the lower islands will flood occasionally as the water level changes. This will allow visitors to get close to the river.


AYE, AYE: Capt. William Lozier, owner and operator of Memphis Riverboats Inc., is concerned the Beale Street Landing project will cause logistical problems for his fleet of three riverboats. Since it started in 1955, the company has operated from the cobblestones at the foot of Monroe Avenue and Riverside Drive. -- PHOTOGRAPH BY ANDREW ASHBYA 13,000-square-foot building will be constructed on the northeastern edge of the property with glass windows facing the river. The first floor of the building will be 10,000 square feet and could host a gift shop, a ticket terminal for boating companies and a restaurant. The second floor will have 3,000 square feet for utility equipment.

"That building will house what is one of the missing links for that area now," Lendermon said. "If you're in Tom Lee Park or at the cobblestones, you're a long way from a Coke, a burger or a glass of wine."

Hope floats

The project also features grass planted over the roof of the building, which slopes down on both ends, with one side landing in Tom Lee Park to the south and the other ending in a planned plaza to the north.

The RDC also is planning a 70-space garage under the building. This is down from the initial plan's 100 spots, another cost-cutting move.

Beale Street Landing's total project cost will remain $29.3 million, despite rising construction costs.

"Prices are certainly going up," Lendermon said. "Katrina and fuel prices have greatly increased the cost of this project, although we've committed to build this project for a set amount of money ($29.3 million). We deal with the increased price through changes in the project."

One change will be a shortened floating dock, which will rise and fall according to the Mississippi River's level. The original design called for a 580-foot floating dock. The RDC reduced the dock length by 100 feet to save money.

The reduction made the dock long enough to accommodate large steamboats and excursion boats.

"We felt it wasn't worthwhile to spend another million dollars extending this floating dock when it wasn't needed for the docking of vessels," Lendermon said.

When planning the landing, the RDC also reduced the number of islands at Beale Street Landing from six to five.

The first phase of the landing was completed in August 2005, when Great Lakes Docks and Dredge Inc. widened the point where the Wolf River Harbor meets the Mississippi.

Lendermon said he hopes bidding for the second phase of the landing, which involves building a sea wall to allow for construction of the rest of the project, will begin in early July. The second phase of the project should start in September, with the entire landing scheduled to be finished in early 2009.

Voice of reason

Beale Street Landing would change the appearance of Memphis' riverfront, but some citizens aren't sure it's needed.

Friends for our Riverfront, a nonprofit citizens group, has spoken out about several RDC projects, such as the proposed land bridge to Mud Island and the development of the public promenade area along Front Street. While the organization might seem to be anti-RDC, that's not the case, said Friends president Virginia McLean.

"But in terms of (the Beale Street Landing project), we think they really need to be evaluated in terms of the cost, in terms of the need and in terms of whether it's a good investment," she said. "Is there really a need for Beale Street Landing, or would the cobblestone area we already have, with improvements that could cost less, suffice?"

Capt. William Lozier, owner and operator of Memphis Riverboats Inc., said he also thinks the cobblestones are a better investment. The company has been in Lozier's family since 1955 and always has operated from the cobblestones at the foot of Monroe Avenue and Riverside Drive.

"We like where we're at," Lozier said. "Yeah, we'd like a new facility, but a new facility comes with new problems."

The company operates three riverboats, and Lozier said he has plans to put two more into service next year. Once Beale Street Landing is built, it could add another step to his departures.

"We would have to deal with the logistics of another landing and where the boat is going to disembark from," he said.

Setting sail from good to great

Some Memphians are excited about Beale Street Landing as a terminus for one of the city's most famous streets.

"If you go there today, it's in a dismal condition," said Carol Coletta, host of "Smart City," a nationally syndicated radio show that focuses on urban issues. "It's really no way to treat the Mississippi riverfront of a city that has ambition or pride."

Coletta said she thinks Beale Street Landing could be a key development for Memphis' riverfront.

"I think one of the reasons Beale Street Landing is so important is because it will set the tone from an urban design standpoint," she said. "It will set the standard for everything that comes after it. It doesn't need to just be good, it needs to be great."

Lendermon said he agrees with Coletta and thinks Beale Street Landing will provide a connection to the water that Memphians desperately need.

"You can't physically get to the water anywhere in Memphis except for the cobblestones and many people can't walk on the cobblestones," he said. "This will be a place you can get to the water's edge any time and in a very pleasant way."

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Friday, June 09, 2006

Eminent domain law could impact riverfront redevelopment plans

Memphis Business Journal
by Christopher Sheff
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Eminent domain legislation signed by Gov. Phil Bredesen this week could give renewed hope to those opposing the redevelopment of Downtown property by the Riverfront Development Corp.

Although House Bill 3450 is one of the least restrictive of several bills introduced by lawmakers this past session, certain provisions give landowners some real recourse to having their land taken for economic development purposes, says Kevin Walsh with Harris Shelton Hanover Walsh, who primarily represents landowners in eminent domain disputes.

In the session that just ended, 59 bills were filed by state Democrats and Republicans in both the House and Senate to limit the use of eminent domain by local governments.

The flurry of activity on the issue was in response to the U.S. Supreme Court 5-4 ruling in 2005 that found that the New London Development Corp., acting through the City of New London, Conn., had the authority to take homes for a development plan that included a resort hotel and conference center, a new state park, 80-100 new residences and various research, office and retail space. The case is now often referred to as the Kelo Case, named after local homeowner and lead plaintiff Susette Kelo.

"I do think it is a good step toward addressing the Kelo issue in Tennessee," Walsh says.

Walsh says the legislation, which was signed June 5 and is still being digested by the legal community, clarifies the limited nature of public use for the stated purpose of taking a property for economic development.

"That should provide some comfort to owners of property that there is a recognized prohibition of taking property solely for economic development," Walsh says.

Test case in riverfront redevelopment?

Locally, the most prominent case that may test the legislation is the RDC's $50 million plan to remake 6 acres of prime riverfront property that now contain the Cossitt Library, Fire Station No. 1, the old Customs House (future home of the University of Memphis School of Law) and Confederate Park.

Private developments, including three proposed new buildings, would pay for projects like a two-level promenade and the relocation of parking garages underground. The buildings would be mixed-use, with restaurants and shops lining the bottom floors. Ground leases would keep the property under the control of the city. The plan also calls for pedestrian bridges that would stretch across Monroe and Court and for improvements to sidewalks on the promenade. Grand staircases would provide access to the upper level of the pedestrian walkways.

RDC president Benny Lendermon, who says he had not seen the new legislation as of Wednesday, didn't express much concern about the impact of the new law on RDC's redevelopment plan.

While saying that the RDC has hoped to never use eminent domain to obtain property, he says the process "is important for municipalities to grow and prosper."

Eminent domain is not a favorable option because the governing authority often pays much more than the fair market value to get it.

"The courts always make sure the property owner is duly compensated," he says.

But in the case of the property in question, it may be a question of actual ownership.

There has long been a legal dispute about the use of the property and who has the authority to decide it.

The property was apparently donated by the city's founding fathers for use as a public promenade decades ago, although the heirs of the founders reportedly still hold title.

Legal showdown may be afoot

Arguments over aspects of the donated land have gone all the way to the Tennessee Supreme Court in the past. Some members of the legal community see another legal showdown brewing between the City of Memphis, RDC and the heirs, chiefly the Overton family, whose name is attached to one of the city's largest recreation areas, Overton Park.

The riverfront land in question "was given to the citizens of Memphis," says Virginia McLean, an Overton heir and president of the Friends for Our Riverfront. "The city acts as a trustee of the land."

It was the intention of McLean's family that the land be used as a public promenade or public open space like Boston Common.

She says she is not against the property being developed and improved, "but the question is who is the land being improved to benefit? Improved for a public promenade or private development?"

Despite Lendermon's stated hope that eminent dominion would not be involved, McLean says she is confident the city plans to initiate eminent domain proceedings.

Lendermon says since the project was approved by the City Council in 2004 there has been little movement due to the city's budgeting problems and other priorities. But with a new budget approved and those problems seemingly behind it, talks can now begin on how to proceed.

"Dealing with the promenade property in the future will be some target on that schedule," he says.

City attorney Sara Hall did not return calls seeking comment.

RDC's first move is with the city

Whatever direction RDC and the city attorney's office take will first come before the City Council's economic development, tourism and technology committee chaired by attorney Dedrick Brittenum Jr., managing partner of Farris Mathews Branan Bobango Hellen & Dunlap PLC.

Brittenum, who joined the City Council in November and has handled eminent domain cases in his practice, says he was briefed on the RDC and progress on the promenade project by Lendermon just two weeks ago.

He says if any eminent domain proceedings are to begin, the RDC would first have to make the request to the city.

Brittenum says he was about to ask Lendermon if RDC planned to take that step when a fire alarm in One Commerce Square abruptly ended the meeting before Lendermon could answer.

"He was, literally, saved by the bell," Brittenum says.

csheffield@bizjournals.com

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