Paul Simon released this anthem about Elvis Presley’s historic home in Memphis in 1986, nearly a decade after the legendary singer’s death. A lot has changed.
Covid-19 has damaged Graceland so much that the state of Tennessee’s tourism revenue bonds defaulted. The city of Memphis, the state and Elvis Presley Enterprises are at loggerheads over how that happened and how to fix the slide that put nearly $20 million in Graceland Project bonds into “junk” status.
There’s a lot of finger-pointing going on in the King’s house now.
“We haven’t defaulted,” you insist “The state agency defaulted,” said Joel Weinshanker, managing partner of Elvis Presley Enterprises for a decade, referring to EDGE, the economic development agency for Memphis and Shelby counties.
Not so fast, Stefanie Barrett, the agency’s director of marketing and communications, responded in an email. “EDGE serves as a conduit … the Graceland bonds must be returned [taxes] all of which were created at Graceland.” His email reads: “Neither EDGE, City, County, State, nor any taxpayer… is responsible for the payment.”
“Covid-19 was the largest crisis to hit the leisure and hospitality industry in history,” said a spokesperson for the Tennessee Department of Tourism Development. Tennessee saw a total of 75 million visitors in 2020, down from 128 million the year before, according to the department.
Graceland’s default could affect other tourist attractions and cultural sites nationwide that have promised to generate revenue to boost funding.
But this bond proposal is “extraordinarily complex,” and that’s often an indication that there could be problems later, said Matt Fabian, a partner at Municipal Analysis Management.
EDGE originally issued $104.3 million in Graceland Project bonds in 2017, some of which were unrated or identified as high risk. The various revenue streams from Graceland, tied to a number of new taxes – sales, tourism and property – were each pledged to a different series of bonds. About $20 million of that is currently in default.
As for the bond adviser who approved the complex bond issue, an email from Bass, Berry & Sims said, “we are out of circulation.”
Critics say bond proceeds have been earmarked to finance a major, perhaps too ambitious, expansion, beginning in 2015 and eventually adding new buildings and a 450-room hotel.
An Elvis car museum has also been added, More than 100 of his sequined jumpsuits and other clothing, memorabilia, and more music history collectibles, including black artists who influenced or worked with Elvis. Priscilla Presley, the singer’s ex-wife, noted at the 2017 opening that “Elvis wanted this.”
This worked. The hotel received a desirable price Mobile has hosted four Diamond Awards and the annual General Hospital fan convention twice. The cheapest ticket to the estate for adults, including a tour of the mansion, is $77. Ultimate VIP pass, covers new attractions, a private tour, lunch and access to the singer’s private jets are $190.
“Years ago the visit was a drive-thru, now they’re forced to stay a few days,” Weinshanker said.
But as Graceland grew, expansion caught up with Elvis Presley Enterprises and the city of Memphis. In 2018, Graceland sued the mayor’s office. a concert venue that may have spoiled the city’s lack of competition with FedEx Forum and the Memphis Grizzlies. (The mayor’s office did not respond to multiple emails.)
With that project blocked, Weinshanker began talking in interviews about a possible solution that amounted to heresy: moving Graceland out of Memphis.
Elvis Presley Enterprises owns the rights to the singer’s image and much of his music, and is still partially owned by his daughter Lisa Marie Presley. (Weinshanker declined to give the percentage, but court filings said it was 15%). Letters to his representatives were not returned.
During the height of Covid, properties were closed or operating at reduced capacity and revenues plummeted.
However, these financial difficulties may be temporary. In recent weeks, director Baz Luhrmann’s movie “Elvis” has caused an increase in the number of viewers. It crossed the 100 million dollar mark hour On July 15, the US box office became “one of the rare films without superheroes or dinosaurs”, reported Variety.
Graceland visitors reached 200,000 in the second quarter of this year, Weinshanker said, more than in all of 2020 and down only 10,000 from the same quarter in 2019. “And people are spending more,” he said.
It also helps that tourism rises in August as the city celebrates Elvis Week (the singer died on August 16, 1977, aged 42).
There’s a week-long series of events, concerts, and a huge candlelight vigil that closes the streets around Graceland. Thousands of fans flock there every year, some visitors call it a “pilgrimage”.
Meanwhile, what happens to investors in defaulted bonds? They will just have to be patient
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