Council Speaks Out on Performa Settlement

Memphis, Tn - City council members spoke out at Tuesday's meeting about the settlement agreement with Performa.

Performa is the company that currently still manages Beale Street. City Attorney Herman Morris said the settlement was needed to get control of Beale back into the hands of the city sooner rather than later. But many on the council say the administration sacrificed too much for the sake of speed.

Beale Street is the most profitable tourist attraction in the state of Tennessee. But the city of Memphis has not seen much profit from the famous street. In litigation with Performa for years, a settlement was finally reached.

"The citizens of Memphis lost everything and gained nothing," says Memphis City Council Member Barbara Swearengen Ware.

The settlement was signed by Performa and city lawyers in early June, but the council called on Morris to explain a few things.

One issue in the settlement council members had a problem with, is paying John Elkington's attorney fees. Elkington is the president of Performa and racked up $400,000 in fees.

The agreement spells out that Beale Street merchants will pay those fees, $7,000 a month for 5 years. In return, the city will give them credit of $7,000 a month on rent.

"It never goes into the city's coffers, so the money is being paid, if it's not coming to the city its going somewhere," says Ware.

But Morris says the settlement was necessary if the city wants to start making some money off Beale instead of remaining in litigation.

"Perhaps there are some other interested merchants or vendors or restaurant holders or other club owners that would be interested in coming on to Beale Street who wouldn't want to come in the middle of a lawsuit," says Morris.

Something that wasn't settled in this agreement was the pipeline the money flows through. Vendors will still pay Beale Street Development Corporation instead of the money going straight to the city. The B.S.D.C. is still in litigation with the city, and is the one body that can make a budget without the city council's approval.

"I'm concerned that in the years ahead, when money is flowing to the city, that there's going to be a fund out there, according to one interpretation that the city council had no say in," says Memphis City Council Member Jim Strickland.

Strickland asked Morris to see if that set-up is a violation of the city charter.

It was also requested Morris look into renegotiating the vendor's leases on Beale. As they stand, Elkington will get 5 percent of the monthly rents until the long term leases are terminated.

"I would hope that its not all over and that they will look at some of the thing that we have talked about and at least try to fix it," says Ware.

The lawyers said they do some research and report back to council in two weeks, but already said it is pretty much a done deal. It has been signed off on and will become official in the next 60 days once it's approved by a bankruptcy judge.