The ABCs of TDZs

The meaning of "tourism" is being stretched to the breaking point.



What do condos and a golf course in Pigeon Forge in the Smokies, a Bible-story theme park in Middle Tennessee, and Graceland have in common? They're all proposed Tourism Development Zones, the latest craze in public finance in Tennessee.

Last week, the state legislature approved TDZs, as they're called, for Graceland and the Mid-South Fairgrounds.

The government jargon is confusing, but the idea is fairly straightforward and not really new: A hot tourist destination generates additional property and sales taxes that fund public improvements that generate more private development, and so on.

Although it isn't called a TDZ, Tunica is an obvious example of a big tourism windfall. A county with 10,000 residents lays a 4 percent tax on the casinos, netting over $50 million a year. Many of the customers come from afar. The taxes fund new schools, roads, law enforcement, fitness centers, a downtown mall, and an arena. City and county leaders have to work hard just to think up ways to spend all the money. Property taxes in Tunica were cut to zero. Now that's tourism-driven development.

TDZs were originally supposed to help pay for convention centers and "qualified public use facilities." The definition has been stretched to include privately owned tourist attractions and "qualified associated development" a mile and a half away. Tennessee lawmakers, apparently fearing a cascade of "me-too" requests from small-scale TDZ projects across the state, set a threshold of at least $200 million of investment. But when wishful thinking is the ante, players will always be drawn to the table, including the developer of the proposed Bible Park USA near Murfreesboro.

In Memphis, Graceland is a tourist attraction with worldwide recognition. But it counts visitors in hundreds of thousands, while Gatlinburg and Tunica count them in millions. Investor Robert S.X. Sillerman, whose company, CKX Inc., owns the marketing rights to Elvis Presley, says it will spend over $100 million on two hotels, an expanded visitors center, and retail shops if the public sector does about $60 million. According to CKX filings, this will "grow the Graceland experience as the centerpiece of the Whitehaven section of Memphis." Having sold records, movies, and memorabilia, the King of Rock-and-Roll is now selling buried power lines, blight removal, and clean streets.

The Mid-South Fairgrounds as a TDZ is another stretch. Tourism was the driving force of the fairgrounds when Libertyland opened on July 4th, 1976, the American bicentennial. The Mid-South Fair was a regional draw, and there were major concerts at the Mid-South Coliseum. Thirty-one years later, Libertyland and the Coliseum are closed, the cattle barns are an eyesore, and the fair will soon be moving, The only "qualified public use facility" that can lap up state TDZ funds is the stadium.

Whatever happens at the fairgrounds in its next incarnation will primarily be for the patronage and benefit of Memphians, not tourists. Say there is some combination of a renovated or new football stadium, a minimally renovated Coliseum, the Salvation Army/Kroc recreational center, the Children's Museum, playing fields, a school, new housing in the Beltline neighborhood east of the fairgrounds, and one or more big-box retailers such as Wal-Mart or Target. Where's the tourism tax windfall?

A typical University of Memphis in-conference football game crowd is about 30,000. Unless the Tigers get into a Bowl Championship Series conference, that isn't likely to change. If the retailers and restaurants, aka "qualified associated development," fail or don't come, everything else is either publicly owned or nonprofit, and that means no tax revenue, and taxpayers are left holding the bag.

Improving the fairgrounds and Elvis Presley Boulevard with ordinary taxes may be hard politically. But twisting the meaning of plain words to collar state or federal funding is a dangerous game. Look at the FedExForum parking garage and its phantom MATA station. Some of the most extravagant follies in Memphis — the trolley, The Pyramid, Mud Island, Beale Street Landing — have been or will be built in the name of tourism, which is one reason many Memphians regard them with apathy or resentment. Anyone who proposes to develop Graceland or the Mid-South Fairgrounds (including Henry Turley, who is a board member of the parent company of this newspaper) has their work cut out for them, even with TDZ approval from Nashville.

Keep the Flyer Free!

Always independent, always free (never a paywall),
the Memphis Flyer is your source for the best in local news and information.

Now we want to expand and enhance our work.
That's why we're asking you to join us as a Frequent Flyer member.

You'll get membership perks (find out more about those here) and help us continue to deliver the independent journalism you've come to expect.

Add a comment