Beale Street is going to be a festival in the heart of the city every day -- a Memphis in May atmosphere all
year round, where people of every description can gather and feel good about themselves and their community.
There will be no barriers to blacks or whites, real or imagined, and we're going to make it apparent to both."-- John Elkington, 1982
Performa Entertainment Real Estate offices are a music lover's dream. Memorabilia from artists of every possible genre line the walls and adorn tabletops. An eerie bust of soul legend Rufus Thomas, complete with red eyes, greets visitors at the door. The decor isn't that surprising, really. You'd expect the offices of the company that manages "The Crossroads of America's Music" to look a little hip and trendy.
Don't expect hip and trendy from John Elkington, who looks more like, well, a real estate agent. The 54-year-old entrepreneur has made a career out of turning nothing into a lot of something.
With Performa, Elkington has managed to not only reenergize Beale Street (which now surpasses Graceland as the state's top tourist attraction, according to Convention and Visitors Bureau numbers) but also package the formula for other cities around the country. City leaders have come from as far as Spokane, Washington, to partake of the business voodoo used to put Memphis on the map. Mention his name in development circles and the most common response is simply "John Elkington is a dreamer."
As 2003 comes to a close, with the partially completed FedExForum looming at Beale Street's back door, Elkington and company are doing what they do best: changing with the times. As the area makes ready for an influx of fans and visitors, Performa is devising plans to capitalize on the expansion. "Our legacy to Beale Street will not only be that we started it but we finished it," said Elkington. "But the work is never finished. We spent this whole year working on our next 20 years."
Devising the Plan
When Elkington first decided to take on the task of redeveloping Beale Street in 1983, everyone told him he was crazy. Others had tried, unsuccessfully, to redevelop the once-thriving area, which had dwindled to boarded buildings and piles of rubble after the Martin Luther King Jr. assassination in 1968. The Elkington and Keltner Company took over management of the street from the Beale Street Development Corporation and became responsible for everything -- securing tenants, collecting rents, maintaining buildings, and advertising and scheduling events.
"I was 32 years old and thought I could do anything at the time," he said. "When you're younger you don't know as much, and you get involved in projects that you really don't have the qualifications for. So, what happened? I had no plan, no marketing money, and I almost went bankrupt, twice."
Elkington estimates he spent more than $3 million of his own money, in addition to federal grants, to renovate the district.
The perseverance paid off. This year marks the 20th anniversary of Beale's redevelopment, a year in which Beale Street businesses grossed more than $24 million, according to Performa CFO Joe Calabretta. In the intervening years, an Olympic torch has been carried down the street, President Bill Clinton ate at Blues City Cafe, and more famous bands than you could possibly name have played in its clubs.
Vice president of operations Al James has been with Performa for 20 years and worked with the Beale Street Development Corporation before that. Although Elkington gets most of the credit for turning the street around, James actually maintains it, working with the Beale Street Merchants Association, spearheading security, and patrolling the area during nighttime events. His day begins at 6 a.m. and sometimes ends well after midnight. "I'm the last person from the original team," he said.
The energetic 49-year-old admits to having doubts about Elkington in the beginning. "I have to give John his props. He has weathered some storms. I followed him here and businesses followed him too. He has proven a lot of people wrong. The street has proven itself. We can't lose on this."
The street posted its first profitable year in 1990, with sales of $5.6 million. In 1996 the street was removed from the U.S. Department of Interior's list of endangered historic buildings, following the openings of Silky O'Sullivan's, Alfred's, and Rum Boogie Cafe.
Elkington then took his development/management formula on the road -- to Shreveport, Louisiana, Cincinnati, Ohio, Winston-Salem, North Carolina, and elsewhere. The results have been mixed.
Elkington came before the Shelby County Commission earlier this fall for what should have been a routine approval vote for his reappointment to a seat on the Center City Commission (CCC). Somewhat surprisingly, he received a dissenting vote from Commissioner Linda Rendtorff.
Although Elkington had served on the CCC before, Rendtorff questioned his commitment to the position and its requirements. "The [CCC] post has to deal with a lot of issues dealing with money and tax freezes, and these things need to be scrutinized very carefully," said Rendtorff. "And here you've got somebody who doesn't fill out forms like he's asked, doesn't fill out resumes, doesn't show up for [his] committee [interview] and expects to be put on the board. These things need careful scrutiny, and I'm not sure he's capable of that."
Quite the contrary, said CCC president Jeff Sanford, who has known and worked with Elkington in various capacities dating back before Beale Street was redeveloped. "John has been very interactive and participatory on our board," he said. "I was around when he was dreaming about creating the district, and I remember in the late 1970s he called and asked my opinion and I told him he was nuts. Now we have people calling the [CCC] because they've heard about the success of Beale Street and about John."
Elkington contends Rendtorff's concerns are unfounded. "When I was younger, that was the case. But people change, and as they get older, they mature," he said. A second marriage (to Valerie Calhoun, a Fox-13 anchor), two grown sons, and an 18-month-old have mellowed Elkington. "People used to tell me that I was too busy and doing too much, and probably in those days I didn't care. I just wanted everyone to like me," he said. "Now, I don't care who likes me, and I don't feel bad about saying no anymore."
Elkington was ultimately reappointed to the CCC and serves as the mayoral appointee on the group's Downtown Parking Authority and on the Center City Development Corporation. "John's been around a long time. He knows a lot of people, and sometimes just being around long enough will get you there," said Rendtorff.
Even though Sanford may be in his corner, representatives of other cities where Elkington has taken his expertise have questioned his accountability, citing a lack of responsiveness, communication breakdowns, and unrealized promises. In what may have been Performa's most public management failure, financial support for the Red River Entertainment District in Shreveport fell through in October when the primary creditor, Flint Industries, met with foreclosure.
Mayor Keith Hightower and city officials worked with Elkington for more than seven years. "We wanted restaurants, clubs, and shops. A little more commercial than Beale Street, but unique to Shreveport," said Hightower. "The project got built, we funded it, and Performa never filled it up. When leases weren't executed, a lot of names were thrown around and it never came into fruition."
In interviews with the Shreveport Times, Hightower criticized Elkington for insufficient marketing of the area, particularly during tourism season. After the disintegration of his city's relationship with Performa, a foreclosed project, and $15 million in losses, Hightower has tempered his criticism somewhat. "We've been contacted by some other cities [about Performa's actions], but I'm not on a witch hunt to get John. I think he got spread too thin. He kept a dream alive for a long time. Unfortunately for us, it was a bad dream. But that's in the past, and we're trying to move on," Hightower told the Flyer.
The mayor said his city has been able to obtain some tenants, but plenty of vacant space remains, largely due to negative publicity surrounding the district's handling.
Elkington's employees stand behind him. "The Shreveport deal really hurt him. It made him angry, and I don't think I've ever seen John that angry before," said Cato Walker, Performa senior vice president of development. "The whole story was never told. Part of the problem was the partnering and also circumstances caused by the city's requests. Shreveport needed someone to blame, and because he was the face [of the project], they blamed him."
Winston-Salem, North Carolina, downtown development director Jack Steelman speaks wistfully of his city's planned Fourth Street entertainment district. "We still have banners up with that name, but now it's become more of a restaurant row," he said. Performa finished its work with the city in 2000. Though plans were drawn up for retail outlets as well, no projects were begun.
"We were pleased with the outcome in terms of the plan itself, but we hoped he would bring more capital and deals to the table than he did. But we were pleased with the people that we met through him," said Steelman.
Through Performa, the city was able to acquire funding to build $26 million in residential units. But it also fell victim to Elkington's multitasking. "John is such a dreamer that sometimes people found him hard to believe," Steelman added. "We're a fairly conservative, mid-size Southern city that just didn't see things that a dreamer like John would see. But it's also fair to say that he was trying to evolve from consultant into developer at the same time within our project, and some unrealistic prices were put on land by private owners."
Locally, Elkington has also had to fight some battles. Two years ago, then-Performa CFO and longtime friend Paul Gurley died. Since then, Elkington and Gurley's widow, Mary Harvey, have been disputing unpaid bills stemming from a company credit card issued in Gurley's name. Although Harvey did not pursue legal action and Performa paid the $13,000 bill in question, animosity still exists between the two.
Elkington has also been criticized for overcommercializing Beale Street, diluting -- some would say eliminating -- its uniquely Memphis characteristics. Three of the street's largest venues, the Hard Rock CafÇ, Wet Willie's, and Pat O'Brien's, are franchise developments. "In the endeavor to make money, I don't see how [Beale Street] could not have become commercial," said Walker. "Beale Street has been a self-exploiting and commercialized street all its life. Rufus Thomas exploited Beale. B.B. King exploited Beale. Elvis Presley exploited Beale."
Elkington maintains that the venues on the street remain unique to Memphis, and local management is sought for the franchises. In an attempt to continue the street's African-American heritage, Performa has also instituted a 25 percent minority-ownership rule for new venues.
According to Performa's management agreement with the city, any rental income above and beyond Performa's expenses, which include security, insurance, and street maintenance costs, must be paid to the city. Elkington says there will be no surplus this year. Because of arena construction, access to parts of the street has been difficult, he said, adding that tenants have also dealt with extended pavement and sewer repairs, forced evacuation following July's big storm, and security expenses of $180,000.
"From what's being reported, sales on the street aren't down compared to last year, but they are not up either," said Calabretta. "It's anybody's guess as to what's to happen with the arena. The businesses that I've talked to are looking for 12 to 20 percent increases during [Beale Street's] off-season [between Thanksgiving and Mardi Gras]."
At press time, city officials had not responded to repeated requests for information regarding Performa's dividend payments. According to Calabretta, more than 60 percent of Performa's revenue comes from out-of-town projects. Through November, the company produced $325,000 in out-of-town billings compared to about $200,000 from Beale Street.
Elkington will manage entertainment districts in Cincinnati, Jackson, Mississippi, and Trenton, New Jersey, in the next two years. Plans for Jackson's Farish Street district are complete, and properties are under construction. Trenton's South Broad Street Village project will include more than 200 apartment units and 40,000 square feet of commercial space, developed by Performa. Plans for Cincinnati's Over-the-Rhine district will be unveiled in January.
So far, Cincinnati city councilman John Cranley has been pleased with the progress. "John is in the process of working with local restaurants and local celebrities. We are also buying land and helping to land tenants," he said. "The business aspect of the deal as well as the personal friendships that have developed from it have been good as well. We have never had an experience here with accountability or unreturned phone calls."
Elkington is working to bring a Chicago-based club, the District, to Beale Street. He also hopes to achieve a long-term goal by bringing the King Biscuit CafÇ as a breakfast venue to the street. "Memphis is changing, and we're trying to get younger people here," he said. "We have an urban crowd here, and you've got to address that."
Elkington said he plans to transfer ownership of his management company to a minority owner within the next five years. The management deals, which require five to seven years of ongoing work, no longer hold an allure for Elkington. His primary interest lies in development and building ventures.
"Not many people get to take a dream from idea to reality," said Walker. "John has developed a great product in Performa. ... And he is not above getting out on the street and picking up paper. Back then [during the company's founding], John was like a bull in a China shop. Now he realizes that you can't do things with so much reckless abandon. He's realized that he no longer has to be the whole crew."
Performa Business Projects
|Illustrations of Jackson, Mississippi s, Farish Street entertainment district, scheduled to open in 2005.|
The District new Chicago-based restaurant/nightclub; opening spring 2004 in the former Have a Nice Day CafÇ space
Lee s Landing new development adjacent to FedExForum, consisting of a 420-car garage, 15,000 sq. ft. of retail space, a national steak house, and a Westin hotel
Blues Alley redesigned rear facades of existing businesses bordering FedExForum
New Police Museum
Midtown s Central Business District development 50,000 sq. ft. of retail space
Over-the-Rhine (Cincinnati) plans to be unveiled in January for 100,000-sq.-ft. development. Performa has received letter of intent to develop 40,000 sq. ft. of that area.
Farish Street (Jackson, Mississippi) plans completed; city is doing infrastructure; opening spring 2005
South Broad Street Village (Trenton, New Jersey) $24 million in state funds to develop the area; Performa will develop 232 apartment units, 100,000 sq. ft. of neighborhood commercial space, 30,000 sq. ft. of office space, and a 650-car garage.