How big a stretch is it for John Elkington and Performa?
by Joe Tarr
John Elkington can hardly contain himself. The ruddy-faced developer has been courted by cities around the country who hope that he can turn their old downtown buildings into something vital where folks from the suburbs will want to spend money. Dressed in a crisp blue shirt and tie, the former Vanderbilt football player is quite familiar with the back rooms where business deals are hashed out. But in his home office above Memphis' Beale Street—the financial success that made him a guru for revitalizing historic urban areas—Elkington would just as soon show off the mementos, pictures and other neat things he's collected over the years as talk about Knoxville's downtown development.
There's the Gibson guitar BB King had made and signed for Elkington; the acoustic guitar decorated by folk artist George Hunt; pictures of Elkington with Al Gore, Colin Powell, Sam Phillips, Little Milton; framed ticket stubs from concerts he's been to, including Woodstock '94, Roxy Music, Queen, Elton John, Black Sabbath; the black and white photos by Ernest Withers of Martin Luther King, the Civil Rights movement and countless soul and blues legends.
"This is not a money thing," Elkington says of his job. "You've got to like what you do in life."
Enthusiasm may be Elkington's biggest asset as he sells his services to cities around the country, including Knoxville. If the city adopts Worsham Watkins International's $360 million plan for downtown, Elkington would be given control over Knoxville's most notable block, Market Square, along with a section of Gay Street.
But Elkington (whose company is called Performa) has his critics. They say he promises more than he can deliver and is difficult to deal with. He's also yet to repeat his Beale Street success anywhere else in the country, although his other projects are in the formative stages.
Do people here know enough about him to trust him, and do they really need him?
Home of the blues?
It's a steamy Tuesday night on Memphis' most visited three blocks, but the crowds are sparse. Although it is now Tennessee's most popular tourist attraction and has live music seven nights a week, there are certainly slow nights, and this is one of them. Nearly every bar and shop blares music onto the sidewalk and most have waived cover charges for the evening, trying to entice people inside.
Large, colorful, retro signs hover above the pedestrians. The majority of the establishments here are clubs that serve food and have live entertainment. There are also shops like Tater Red's, which sells folk art and trinkets, playing off the voodoo theme of the blues, a few T-shirt shops and an ice cream parlor, among others. Four of the clubs are national franchises; the rest are run by local entrepreneurs.
"It's pretty commercialized," says Phil Hamlin, a Minneapolis resident in town for business. His first time on Beale Street, he totes a plastic bag of souvenirs with him. "It's gaudy. If I was going to come back here for the weekend, I'd get screwed up drunk for sure. But because I've got to work tomorrow, I'm going to go home and go to bed."
It's big stretch to classify a lot of what you hear on Beale Street as blues. Much of it seems geared to sound familiar to whomever might pass.
A '50s style diner known as Dyer's Burgers plays the '80s New Wave hit "Warrior," by Scandal. The Hard Rock Cafe plays "Night Moves" by Bob Seger and Nirvana's "Smells Like Teen Spirit." An ice cream shop plays the Beach Boys. A band on the patio of Alfred's Bar Grill plays Neil Young, Paul Simon and CSN covers.
Even the blues bands throw in mainstream covers—the Billy Abbott Trio does Janis Joplin's "Take a Piece of My Heart." And up the street at BB King's Blues Club—the venue that finally put Beale Street into the black after years of struggling—Ruby Wilson and the King Beez play covers of the OJays' "Rollercoaster" and the Doobie Brothers' "Without Love."
"There's a lot of bad music, what I call tourist blues," says the legendary record producer and Memphis native, Jim Dickinson. "There's also sometimes music so unique and remarkable, it could be heard no place else on earth."
For all its slick, tightly programmed entertainment and marketing, Beale Street still feels urban. Its crowds are diverse and include high school students on up through retirees (although, there are few children). There is litter, and street musicians abound. Panhandlers have found plenty of work here. One woman wanders the streets, saying even though she looks like a man, she's a woman with child. Exploiting both white liberal guilt and black shame, she tells people, "White people want to help; black people want sex," as she pleads for money and cigarettes.
New life
Beale Street had always been primarily a black neighborhood and business district. In the late '60s and early '70s, it fell on hard times and Memphis tried to clean it up, buying up buildings and evicting businesses and residents. Unfortunately, after taking the buildings over, most of them stood vacant and decayed. As a result, several of the buildings had to be razed.
For about a decade, a number of developers and proposals were floated, but the street remained largely deserted, save for A. Schwab, a now 124-year-old family run general goods store which refused to sell out to the city.
When Elkington and a partner took over Beale Street in 1983, many people thought they were crazy. The first venture was a nightclub, the Rum Boogie Cafe, opened with Preston Lamm in 1985. But that and other businesses scraped by.
"We lost over $3 million...We had a very tough time here and almost went under a couple of times," Elkington says. "Many nights, I sat up in my den at home and said, 'Why am I doing this?' But I made a commitment to the city."
In 1990, the street turned its first profit. The following year, BB King opened a club on the street, and suddenly the strip took off. More recently, the long-anticipated clubs Hard Rock Cafe and Elvis Presley's Memphis joined the street.
Last year, businesses on the three blocks brought in $23 million. With 4.2 million visitors, it is now the most visited tourist attraction in the state, having recently superseded nearby Graceland.
The money end of things has been more controversial.
The original deal that Elkington signed gave him 10.5 percent of the gross rental income, 5 percent of the leasing commission, and 33.3 percent of parking revenues, according to the Memphis Commercial Appeal. After paying for the maintenance of the street and its buildings, the rest of the money is supposed to be divvied up between the Beale Street Development Corp. and the city. To date, neither have received any money from the street (although the city benefits from sales tax income). Elkington says he won't start paying the city money until he's been compensated for the debt he accumulated in his earlier years on the street.
Although he's never declared bankruptcy, Elkington has had trouble paying his bills in the past and was sued a number of times in the '80s and early '90s for unpaid debts from other ventures, the Commercial Appeal reported. He also once used his Beale Street interest as collateral for a separate loan, the paper reported. However, there haven't been any lawsuits over unpaid debts since the mid-'90s, the paper reported.
In 1993, Memphis' mayor ordered an audit of Performa's books. However, the audit was a debacle, with the city spending $276,000 and never getting an official report from the independent auditors it hired, the Commercial Appeal reported.
Despite these controversies, most people credit Elkington with playing a big role in downtown revitalization. Gail Jones Carson, assistant to Memphis's mayor, has nothing but praise for the developer. "John Elkington has done an excellent job with Beale Street. I see it as a better street than [New Orleans'] Bourbon Street. When people come to Memphis, they want to go to Beale Street."
The success has at least in part spurred other downtown development nearby. A block away, the historic Peabody Hotel is constructing Peabody Place, a $200 million indoor entertainment center that will include a 22-screen theater complex, an I-Max theater and several national shops and restaurants. AutoZone Park, a 12,000-seat baseball stadium, and the Memphis "Rock 'n' Soul" Smithsonian Museum both recently opened just a block away, and a Gibson Guitar factory soon will. Performa is building a $2 million amphitheater in W.C. Handy Park.
"When I talk to tourists, the thing they like about Beale Street is its uniqueness," says Lamm, who now owns three businesses on the street and has expanded to other cities. "It's one of the few places in the world where you can hear live entertainment seven nights a week."
"I get calls from all over the world from people wanting to come here to hear the blues. I guess they want to go back to the source," he says.
Liquor mall
Jim Dickinson remembers coming down to Beale Street when he was a boy, buying records at Home of the Blues Record Store, where Elvis Presley bought his music. Dickinson bought his first guitar from a pawnshop on the street. All of that is long gone, and Dickinson doesn't like to go down to Beale Street much anymore.
"It's a city-owned liquor mall," says Dickinson, who produced records for Big Star, The Replacements and Ry Cooder, and has played with the Rolling Stones, Bob Dylan, Johnny Cash and Aretha Franklin.
Dickinson's main gripe is with the city, for evicting residents and businesses and tearing down buildings. Still, he isn't a big fan of what Elkington's done with the district.
"What they've done, it looks like Disneyland to me. It looks like a damn theme park, and it just shouldn't," he says.
"They've got a big gold smiley face sticking out of Beale Street. I don't want to see that," he says, referring to the sign for Have A Nice Day, a disco and New Wave dance club. The street's history isn't portrayed accurately, Dickinson says. In its heyday during the '40s and '50s, blues really wasn't the music heard here—jazz was, he says.
"To a lot of people, Beale Street is about pumping beer onto the street. There's not much future in that," he says. "It's not something to look forward to, except to do the same thing next weekend."
Despite its popularity and profitability, there are plenty of people unhappy with what Beale Street's become.
Judith Johnson, executive director of Memphis Heritage, a historic preservation group, says she has mixed feelings about Elkington. While she credits his initiative, she says Beale Street's buildings, sidewalks and streets are often left to deteriorate. Although technically public property, the city leases the buildings to the Beale Street Development Corp., which signed a decades-long sub-lease to Elkington. (The three groups have been involved in several lawsuits, with the city trying to remove the Beale Street Development Corp. from the agreement, and the development corporation trying to wrest control of Beale Street back from Elkington.)
"Elkington's management group doesn't make any money off replacing bricks in the sidewalk," Johnson says. "He doesn't have any incentive to do improvements, and the city wrote off all responsibility." Businesses are paying such high rent that they can't afford or are unwilling to make improvements to their own buildings, she says. (A Performa spokesman says the company spent $280,000 on maintenance last year, which includes clean-up, security, trash disposal, and building repairs. Each tenant is charged $4 a square foot per month for maintenance.)
Elkington is supposed to get approval from Memphis Heritage for alterations to Beale Street's buildings and streets, because it's a historic landmark, Johnson says. Performa generally informs her after the fact. That includes putting up numerous billboards and signs, she says.
"He's not even here half the time, and if you try to call him, he doesn't call back unless you've got a good deal for him....What the community thinks or feels is not part of his modus operandi," Johnson says. "I understand that everybody has to earn a living. But I've never seen him act in an altruistic manner."
It's a complaint voiced by a number of people Elkington has dealt with, although most decline to speak on the record. One such complaint came from Buddy Guy's Legends, the Chicago blues musician's bar. Elkington courted them to open a bar in Memphis, but the negotiations fell through. "We were promised a couple of things, and he never delivered," a spokesman for the bar says.
Elliott Schwab's family has been running A. Schwab for nearly 125 years, and their store is the only one on Beale Street that owns its building and isn't under Elkington's control. Schwab is more or less happy with the way things are on Beale Street, but he bemoans a lack of diversity among the businesses. "Somebody does something, everybody's got to do it. Everybody's got gumbo, everybody's got ribs, everybody's got catfish. It's like, give me a break. I'd like to see a Chinese takeout, so I could buy fried rice."
Elkington dismisses most of the criticism, and doesn't care to respond.
"Sure, there's some people who say, 'You should have done that.' Hey, no one did it for 15 years. I took a lot of slings and arrows on a difficult project in a difficult town," Elkington says. "It's easy to criticize, but they didn't put up their money."
"I put my money up," he adds. "I went down here when no one would do it, and blacks and whites wouldn't talk to each other. No one can criticize me."
But Elkington struck a strong nerve in Memphis last year when he evicted the Center for Southern Folklore. The non-profit center is an art gallery and store, serving coffee and beer and showcasing live music. It educates visitors about the city's living cultural and arts legacy and has made several radio and television documentaries, and hosts some of the city's more authentic musicians.
The center was started in 1972 and had been at its most recent Beale Street location since 1996. Elkington says he didn't want to evict the center, but says it was badly mismanaged and its director, Judy Peiser, difficult to work with. After evicting it earlier last year, he leased the space to Wet Willie's, a frozen daiquiri chain serving concoctions like "Weak Willie," "Sex on the Beach," and "Call-A-Cab."
The eviction spurred local protests and drew attention from National Public Radio, which wondered whether Beale Street was losing its charm to commercialism. Some pointed out that Elkington seemed to be breaking his promise to steer clear of generic franchises.
The local alternative paper, the Memphis Flyer, wrote: "If the city of Memphis allows Beale Street—and its glorious heritage—to degenerate into a generic strip of non-locally owned, capriciously themed booze joints, we will be much the poorer for it."
The city and county stepped in to help save the Center for Southern Folklore, reorganizing its board of directors and requiring new financial controls.
Moving into a new, larger home in downtown Memphis, a few blocks away from Beale Street, Peiser is reluctant to talk about Elkington and the eviction, hoping to move on. She admits she had financial trouble but says the center was unique and belonged on Beale Street. "For culture to continue, you've got to show it to people. It can't be under glass," Peiser says. "Beale Street is successful as an entertainment district. But many people came into our place and said, 'My God, this is the first place [down here] I've heard the blues.'"
The other side of the state
Two weeks ago, Elkington made the long drive from Memphis to Knoxville. He wasn't in town to make a business deal, but to help his 17-year-old son settle into his dorm room at the University of Tennessee. With two boys attending UT and his wife an alumna, Elkington says he genuinely cares about Knoxville and what becomes of it.
But he says he's disappointed with what he's seen in downtown Knoxville. "For a city that size, I think they're under-entertained," he says. "There's no place you can hear music and have dinner, there's no comedy clubs, no movie theaters.
"Gay Street was once the center of commerce. Now it's a bunch of boarded up buildings. That's a major embarrassment."
At the moment, Elkington says he doesn't have any definite plans for Market Square. He says he doesn't want to create another Beale Street.
Performa's preliminary market study calls for 150,000 square feet of restaurants, clubs and retail and 20,000 square feet of office space. The square footage includes all of Market Square and parts of Gay Street, Elkington says. Performa's also agreed to do 200 residential units in and around the square.
The plan calls for Market Square to be an "entertainment plaza," playing off of the Smoky Mountains, University of Tennessee, the Tennessee River, and various artistic and cultural roots. "Entertainment" would include a "black box theater" for smaller theatrical and musical performances, a health club, and roof top restaurants. Performa would spend $30 million renovating buildings and making exterior and infrastructure improvements, Elkington says.
The Market Square pavilion would be removed, and the farmer's market moved into a permanent facility, according to the market plan. At least six to eight major festivals and 20 to 30 smaller events would be held each year on Market Square. The square would remain public and open, with "places to meet, to see and be seen." Benches would be encouraged, but lighting and security would be designed to "deter vagrants and panhandlers."
Projections for returns are rosy: Performa estimates their portion of the development would draw 3 million visitors in the first full year of occupancy and bring in $35 million in retail and restaurant sales. In contrast, Beale Street's 4.2 million visitors brought in $23 million in sales last year, 16 years after Elkington took charge. However, Elkington says Beale Street's three blocks of first-floor retail only adds up to about 67,000 square feet of space, and doesn't include the BB King or Elvis Presley clubs, two of the more popular businesses on the strip.
The $35 million in sales breaks down to $233 per square foot. Rents are estimated from $20 to $24 a square foot. Shopping plazas in the 100,000 to 190,000 square foot range—under which this development would fall—bring in an average $239 per square foot (including anchor stores), according to the International Council of Shopping Centers. However, rents at those plazas are much cheaper, averaging $6.30 per square foot.
No more than 20 percent of the Market Square tenants would be national chains, with Orvis and L.L. Bean mentioned as strong candidates, according to the plan.
"My idea is to get original things. I'm not interested in the easy fix," Elkington says. "Let's not homogenize everything in America. Let's make it unique and special."
He praised some of Knoxville's current businesses, namely the Tomato Head and Yee-Haw letter press, as exactly the kinds of attractions downtown needs. Although he says it's too early to say exactly what he'd add, he does have some ideas. A sports-themed restaurant or bar could play off the popularity of the UT Vols. "Their sports program has a huge impact not just on Knoxville but the whole state. What form [the attraction] takes, I'm not sure right now. What we don't want to do is make Market Square too slick."
In traveling around the region to search for establishments, Elkington came across a couple he says might work on Market Square or Gay Street: Mill Mountain Coffee & Tea in Roanoke, Va. ("I don't think we need a Starbucks," he says), Tony's Ice Cream shop, based in Gastonia, N.C., and Sambuca's Jazz Cafe in Atlanta.
Another idea Elkington would like to see is a center where visitors could learn about the history and culture of Knoxville and East Tennessee, including the Smoky Mountains and the city's musical and arts heritage. Ideally, it would include a small theater and radio station, he says.
However, Elkington's knowledge of Knoxville seems sketchy. He refers to the Tomato Head as the "Fresh Tomato," calls the Old City "Old Town," and says he'd like to help with renovation of the Tennessee and Bijou theaters, apparently unaware that the Bijou was just renovated.
Still, his enthusiasm for downtown's potential appears genuine, and many people here like his ideas. He met recently with merchants and owners of Market Square.
"The vision that he articulated to us sounded extremely interesting," says David Dewhirst, who owns the old Watson's building. "I went into the meeting skeptical about what they would be proposing. From what he said, I was pleasantly surprised. Now, there's still a long way to go to turn that into reality. Nevertheless, I was very impressed by him."
Even those who aren't sold on Elkington's ideas like him. "He's the kind of person I would probably enjoy going to lunch with or going to a party with," says Susan Key, who lives on Market Square and used to have her antique gallery there, but moved it out west to where the traffic is. "As far as what he wants to do, I don't think that's the best thing for Market Square. I think Market Square should not be themed. The idea of Market Square being run by a single individual seems inappropriate."
Although Elkington isn't adamant that Knoxville take all of Market Square through eminent domain—as Worsham Watkins has proposed—he does say that it's crucial a single manager control building use, tenants and operations. "The only reason Beale Street works is we have one developer. We have rules and regulations and if you don't obey them, there are penalties."
The rules are long, and deal with the minutia of running a business. Signs, paint color, hours of operation, window displays, garbage removal, pest control, and improvements to buildings are all regulated. Also, health violations and selling alcohol to minors are monitored.
Merchants are given 60 days to correct violations. If they haven't improved, Performa will start eviction procedures—something Elkington has only done once on Beale Street.
"People have violated covenants, but usually people are reasonable and correct the problems," Elkington says.
All over the map
Knoxville isn't the only city where Elkington has pitched his services.
With 27 employees, Performa specializes in creating urban entertainment districts in older areas. He's yet to repeat his Beale Street success but has projects in various stages around the country. In Shreveport, La., Performa's doing a riverfront development in conjunction with two gambling casinos. In Hartford, Conn., it's handling the entertainment end of a massive downtown redevelopment project that also includes a stadium, residences and offices.
And in Winston-Salem, N.C., Elkington is working with the city to rejuvenate the Fourth Street Historic District. After 2-1/2 years of work, Performa announced its first two tenants this year, although locations have not been named yet. Tim Duncan (the former Wake Forest student and NBA star) has agreed to open a sports bar, and NASCAR (which was born in Winston-Salem) will open a cafe.
"I'm extremely happy with John's ability to get Winston-Salem to think again about what it can be on a regional and statewide market, rather than just thinking about what Winston-Salem can be for itself," says Jack Steelman, of Winston-Salem's development office. "That's been a big breakthrough in mindset."
Robert Northington, a Winston-Salem alderman for 23 years, credits Elkington for getting people excited about downtown again. However, Elkington has yet to deliver what he's promised, while local developers are putting up money and moving ahead with their end of the project, Northington says.
"There's an old mountain saying that says proof is in the pudding, and I haven't seen the pudding yet. I have kiddingly referred to Elkington as P.T. Barnum because he keeps saying he's going to do these things but hasn't delivered them," Northington says. "I haven't been shown, and I'm certainly not convinced.
"Some of his ideas are good, but I haven't seen any follow-through yet. When I see names on contracts and opening dates, then you're showing me."
John Leith-Tetrault, of the National Trust for Historic Preservation in Washington, D.C., says that Elkington is about the only one in the country who knows how to turn historic areas into major developments. Most large developers are accustomed to new construction, says Leith-Tetrault, who was a moderator for the Fort Sanders Forum and is familiar with Market Square.
"You have to look at John Elkington as unique. He's one of the few developers that I know of that know how to take an historic area and revive it, using small-scale entertainment attractions," Leith-Tetrault says. "You can quarrel with the quality of the renovation...But it's closer to authentic than anything that's out there."
"He's the only person I know who has a functioning, successful example of what he's talking about," he says.
Rum Boogie's owner, Lamm, says reporters come from all over the country to ask him what's Beale Street's secret to success. "You've got to figure out what the local historical perspective is and what will bring people down there. When we started, we had not figured that out," says Lamm, who years ago considered opening a club in the Old City. "Three or four years into it, we realized, 'Hey, the draw is not clubs and restaurants.'" It's music and history, he says.
"One advantage John would have is he'll try to find what would pull people down there," Lamm adds.
Others caution that the truly unique takes time to develop and comes from those who live there, not grand schemes. "John did not give Beale Street its character," says Johnson, who grew up in Knoxville and remembers coming to Market Square to buy peaches out of the back of dirty pick-ups. "What is John bringing to the mix that you couldn't get from someone locally?"
"It's very difficult to develop an entertainment area that has regional character," says Center for Southern Folklore's Peiser. "When you put a sense of place into a development, that's when it will stand the test of time."
Elkington knows many Knoxvillians are apprehensive. "This is not going to be Beale Street," he repeats often.
"I learned a long time ago you can't please everybody," he says. "But we will have a plan. Everyone in Knoxville will know what the plan is, but it won't be just my plan. If you listen to people in the community, they'll tell you what they want."
September 7, 2000 * Vol. 10, No. 36
© 2000 Metro Pulse
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