Project may bring city debt changes

City officials are looking at restructuring Memphis’ tourism-related debt to pave the way for a coming renovation of the Memphis Cook Convention Center.

The Center City Revenue Finance Corp. on Tuesday will be asked to authorize an early payoff of a 2011 $197 million bond issue that the city spent on preparing the Pyramid arena for Bass Pro Shops and buying out Shelby County’s ownership interest in the Memphis Cook Convention Center.

That debt would ultimately be replaced by a revenue bond issue by the Economic Development Growth Engine of Memphis and Shelby County, an industrial development board, according to a CCRFC resolution.

The changes are a preliminary step toward financing a proposed $60 million modernization and facelift of the more than 40-year-old convention center.

“This is just us getting ready to be as financially flexible as possible,” city chief financial officer Brian Collins said.

The Pyramid bonds are paid out of Downtown tourism development zone revenues. The TDZ captures incremental growth in 7.75 percent state and local sales taxes in an area covering most of Downtown Memphis.

The TDZ took in $21.8 million last year, more than enough to make payments of about $17 million a year on the Pyramid-convention center bonds.

City officials have been working with the State Building Commission to expand the purposes for which TDZ revenues can be spent, including improvement projects on the riverfront and Mud Island. The TDZ is currently limited to projects connected to the Pyramid, convention center and Pinch district.

City officials propose to use surplus revenues from the TDZ, in combination with other funding, to make improvements in the Pinch district to complement a more than $1 billion expansion by St. Jude Children’s Research Hospital.