Request for Proposals
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1 The Beale Street Tourism Development Authority c/o Downtown Memphis Commission 114 N Main Street Memphis, TN Request for Proposals Administrative and Management Services for the Beale Street Historic District Memphis, Tennessee Issued by: The Beale Street Tourism Development Authority Issue Date: November 2, 2015 Response Deadline: December 18, 2015
2 1. RFP Overview Purpose and Scope of Work The Beale Street Tourism Development Authority (BSTDA) seeks to retain an experienced professional commercial property management firm with the demonstrated experience, expertise and capability to provide fiscally sound, 24/7 operational and administrative management of the Beale Street Historic District in Memphis, Tennessee. (A District map is attached.) The scope of management responsibility includes, but is not limited to: Insuring a clean, safe (in close cooperation with the Memphis Police) and enjoyable visitors experience; Employing all administrative and operational support staff; Providing all financial and accounting services to include contracting for and facilitation of an annual audit, and the preparation and presentation of an annual budget for approval by the BSTDA; Providing all leasing and lease administration services; Bidding, selecting and supervising all contract services, and administering all permitted vendor and special use programs; Maintaining Beale Street s historic buildings within the terms and conditions of tenant leases; Conducting a strong marketing and public relations program, including an ongoing schedule of popular programs and events; Being sensitive to the history of Beale Street, and its uniqueness as an entertainment district; Working closely with the Beale Street Merchants Association and all of the District s business owners; Exhibiting an unquestioned commitment to diversity in all aspects of the District s operations; Establishing programs and relationships that help connect Beale Street to other Downtown attractions and amenities; Reporting monthly to the Beale Street Tourism Development Authority on the status of District operations and finances. Who Should Submit? Real estate property management firms with demonstrated expertise and experience in managing all administrative and operational aspects of entertainment districts, or other commercial districts or properties (e.g retail, mixed-use, etc.) of comparable size to, or larger than the Beale Street Historic District. 1
3 History of the Beale Street Historic District For decades, Beale Street was the center of African American culture and commerce in Memphis. Drs. Beverly G. Bond and Janann Sherman of the University of Memphis do an excellent job of describing the history of this iconic street in the introduction of their book titled, Beale Street. For the first three or four decades of the 20 th century, Beale Street was widely known as the Main Street of Negro America, the center for business, politics, and social and religious life, a vibrant collection of pool halls, saloons, banks, barbershops, dry goods and clothing stores, theaters, drugstores, gambling dens, jewelers, fraternal clubs, churches, entertainment agencies, beauty salons, hotels, pawn shops, blues halls and juke joints. Above the street-level storefronts were offices for African American business and professional men: dentists, doctors, lawyers, tailors, photographers, undertakers, teachers, and real estate and insurance brokers. Many whites, particularly recent immigrants also lived and owned businesses in the neighborhood. But Beale Street changed dramatically in the years after desegregation, in the aftermath of the King assassination in 1968, and after the wrecking ball destroyed many historic properties during what many retrospectively consider the City s regrettable use of the federal urban renewal program. By the late 70s, Beale Street was all but deserted. Faced with the urban blight that had replaced the historic vibrancy of Beale Street, the City supported the formation of a 501-c-3, the Beale Street Development Corporation (BSDC), to begin the monumental task of resuscitating a dying neighborhood. Federal funds were obtained to fuel the effort, but it soon became apparent that something else was needed: the services of a professional real estate manager and developer. Enter John Elkington and his company (later known as Performa Entertainment Real Estate) with its ideas on how to turn the federally designated Beale Street Historic District into an entertainment district. The City, with no other credible offers and with the approval of BSDC, granted Elkington a 52-year sublease for the City owned properties on Beale. Success of the new entertainment district, which traces its origin back to 1982, did not happen overnight. To be sure the early years were lean years, but through the dogged determination and creativity of both the management company and the merchants, Beale Street has become financially viable - and the lynchpin of the city s tourism industry. It is uniquely Memphis in personality. Nothing quite like it across the country, nothing cookie cutter about it. Home of the Blues and Birthplace of Rock n Roll, it was recently named in a USA Today readers poll as the most iconic 2
4 street in America. Under the continued direction of skilled management, Beale Street is poised for growth. Current Status of the Beale Street Historic District Performa Entertainment Real Estate, the entertainment district s long-time developer and manager, ended its management of Beale Street on December 31, At City Mayor A C Wharton s request, the Downtown Memphis Commission (the organization responsible for coordinating the redevelopment of Downtown) immediately assumed management of Beale Street on an interim basis. That management continues, and by any measure, the DMC has done and is doing an excellent job. But the DMC s mission does not include operating an entertainment district on a long-term basis, and hence the search now for new professional management. Several years ago Mayor Wharton appointed a blue-ribbon committee of citizens to take a hard look at the future of Beale Street. Their recommendations are contained in a report titled Framework for the Future of Beale Street. The report, (A copy of the report is included in this RFP packet) provides still-relevant insights into community and visitor perceptions of and expectations for Beale Street, and suggestions on how those expectations might be met. Emanating from that report, the Mayor proposed and the City Council approved City Ordinance #5580 that establishes The Beale Street Tourism Development Authority to oversee the city s properties and interests on Beale. Through an agreement with the City, the Authority will hold the lease rights to and assume responsibility for the 31 municipally owned Beale Street properties (a City owned property site map is enclosed in this RFP packet), and the District s public areas. But Ordinance #5580 directs that the Authority shall diligently proceed to identify and retain professional and qualified management services for the day-today of operation of Beale Street It is contemplated that once the Authority retains professional management services, it will perform in an oversight capacity, not in an operational role. Current Finances The 34 lessee businesses operating in the 31 City owned properties are estimated to be grossing between $30 million and $40 million annually. District administration and operating funds are primarily derived from rents paid by those businesses. Most lessees pay a flat base rent, or on a percent-of-sales basis (ranging from 1% to 7%), or a combination of both. In 2014, total rental income was $1,305,000. In addition to rent, lessees pay CAM fees for sanitation, security, etc., and that totaled $477,705 in
5 Total 2014 gross income from rents and CAM: $1,782,705. Total 2014 expenses: $1,645,524. Through September 2015, gross rental income is running approximately 5.75% ahead of the comparable period in 2014, and administrative and operating expenses are holding steady to slightly less than in the same period last year. (Copies of 2014 yearend financials and current 2015 financials are are attached.) Leases Since the terms and conditions of the individual Beale Street property leases vary from lease to lease, it is suggested that respondents request a Memory Stick containing copies of all leases. Please contact Jeff Sanford: jeff@jeffsanfordconsulting.com to make this request. Beale Street Merchants Association The Beale Street Merchants Association is an independent tenants membership organization that promotes and protects the interests of Beale Street businesses. The association has about 30 members, and has a long history of promoting Beale Street and producing many of its signature events. City of Memphis Diversity Plan The ordinance establishing the Beale Street Tourism Development Authority instructs the Authority to implement the City s diversity plan which encourages the participation of minority-owned, women-owned, and locally owned small businesses in the programs and activities of the Authority. Current Beale Street Operations Staff When the Downtown Memphis Commission assumed the interim management of Beale Street in 2014, it retained some key members of the previous management company s operating staff. And since then, the DMC has made a few staffing adjustments to enhance operations and to insure the smooth transition to a new, permanent management. This core group of employees gets high marks from the DMC for outstanding performance. The new managers of Beale Street have the opportunity to retain this small group of proven performers who know Beale Street from the inside out. 2. Required Submittal Information Each RFP respondent is required to submit the following information: 4
6 2.1 Transmittal Letter Include primary contact information, and a date your firm could begin the management of Beale Street if selected. 2.2 General Information 2.2.a A general description of the firm s history, its legal designation and organizational structure. 2.2.b Statement describing why the respondent is interested in managing Beale Street, and initial thoughts on how it would approach this assignment. 2.3 Experience 2.3.a Detailed descriptions of current management projects, and a categorical description of the formula used for your compensation (e.g fee-for-service, commission, etc.). 2.3.b Detailed descriptions of relevant past management projects, and a categorical description of the formula used for your compensation (e.g fee-for-service, commission, etc.). 2.3.c Photos of projects detailed above and any other work you believe relevant. 2.3.d Three project references including contact names, addresses (postal and ), phone numbers, and descriptions of your relationships. 2.4 Financial Capacity 2.4.a Three financial references including a current bank, contact names, addresses (postal and ), phone numbers and descriptions of your relationships. 2.4.b A statement confirming that future inspection of most recent financial statements, by the Authority or its designee, will be granted - if requested. 2.5 Resumes 2.5.a The name, resume and contact information (postal and address, and phone number) for the person who would lead your management team on Beale Street. 2.5.b The name, resume, and contact information (postal and address and phone number) for the person who would serve as your management team s chief financial officer. 2.5.c Resumes of any other members of a proposed Beale Street management team, and including brief descriptions of roles they would play. 2.6 Proposed Compensation A description of proposed compensation arrangement by category (e.g. fee-for-service, commission, etc.). 2.7 Disclosures 2.7.a Disclose any potential conflicts of interest that could be conflicting in any way to this management assignment. 2.7.b Disclosure of whether the proposed manager or management group, or any officer, director, or owner thereof has had judgments entered 5
7 against it, or him or her within the past ten years for breach of contract. 2.7.c Disclosure of whether the proposed manager or management group, or any component thereof, has been found in noncompliance with the terms and conditions of any prior contracts; 2.7.d Disclosure of whether any person who would be engaged on behalf of any entity selected under this RFP process to manage the Beale Street properties has been convicted within the past ten years of a criminal offense. 3. Contract Terms and Conditions All contract provisions, terms and conditions, will be negotiated between the Authority and any finalists selected through the proposal review process. 4. Submittal Quantities and Address Submit 15, full printed copies of your proposal. Place the copies in sealed envelopes. (No proposals by or fax will be accepted.) Address and deliver to: Jeff Sanford Beale Street RFP c/o DMC 114 N. Main Street Memphis, TN Proposal Deadline Date and Time All proposals in response to this RFP must be physically received at the above address no later than 4 P.M (CST) on December 18, All submissions will be time-stamped upon receipt. Late submittals will not be accepted unless in the sole discretion of the Authority, or its designee, there were extraordinary and extenuating circumstances that prevented on-time delivery of the proposal. 6. Questions and Requests During Submittal Time Period Questions during the submittal time period, or requests for meetings or site visits, should be communicated by to: Jeff Sanford jeff@jeffsanfordconsulting.com 6
8 7. Public Disclosure The Beale Street Tourism Development Authority is subject to all of the public disclosure requirements of the City of Memphis. Therefore, submittals that are presented to the Authority s Board of Directors for review and approval are subject to public disclosure. 8. Review Process, Timeline and General Criteria It is the intention of the Authority that review of all proposals submitted by the deadline (see Proposal Deadline Date and Time above) will be completed in approximately 30 days. Depending on the number of qualified respondents, and making an allowance for the upcoming holiday season, the review may take longer. But every effort will be made to complete a thoughtful review in a timely manner. Submittals will be judged against the criteria outlined in the Purpose and Scope of Work subsection on page 1 of this document, and the information provided by respondents in the Required Submittal Information on pages 4, 5 and 6. Weighted consideration in the review process will be given to those firms with demonstrated expertise and experience in managing entertainment districts. But such consideration will not be to the exclusion of other qualified respondents. During the review a designee of the Authority may call or send s to respondents with questions or requests for clarifications. But, respondents are directed not to contact individual Authority board members during the review period. 9. General Disclaimer Summiting a response to this RFP does not guarantee the responder any considerations beyond a review of proposals as described above. After its review, the Authority Board of Directors will, in its sole discretion, determine the next steps in the process of selecting a new manager for the Beale Street Historic District. 7
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