Artists urge tighter rein on Downtown incentives
Sarah Fleming and supporters asked a Downtown board Friday to tighten control of incentives to avoid legal snafus like the attempted eviction of Fleming and her partner Christopher Reyes from a Main Street condo.
Reyes and Fleming have been fighting eviction from their upstairs condo at 1 South Main by owners of the adjacent Madison Hotel. The couple lost in General Sessions Court but have an appeal pending in Circuit Court.
Fleming supporters appeared before the Downtown Memphis Commission to urge a fresh look at the agency’s role in the dispute. Two of the agency’s incentive programs, property tax abatements known as payments in lieu of taxes (PILOTs) and exterior improvement grants, have been in play.
Reyes, a visual artist, Fleming, a filmmaker, and their two small children continue to live in the condo while the case is on appeal.
The discussion reflected the extent to which the DMC’s PILOT program complicated ownership of the 1935 building at Main and Madison.
Board Chairman Carl Person asked the speakers to put their recommendations in writing for the agency to consider.
Participants in the PILOT program deed their property to a DMC affiliate, the Center City Revenue Corp., and become “beneficial owners” for the dura-
tion of a PILOT lease. At the end of the lease, the agency conveys the property back to the PILOT recipient for a nominal fee.
It’s done that way because by Tennessee law, government can’t reduce a private entity’s taxes, the board’s attorney James McLaren said.
After the end of 1 South Main’s 30-year PILOT in late 2016, the property was conveyed to hotel ownership. But Reyes and Fleming’s lawyer contended that transaction ignored the fact that Reyes’ mother bought an ownership stake, the upstairs condo, from developer Henry Turley Jr. in 1993.
Because Turley was leasing from the Downtown agency, he sold Reyes’ family a sublease in the upstairs. He later sold his interest in the downstairs condominium to a previous owner of the Madison.
“Looking ahead, you have an opportunity to prevent this from happening with other PILOT properties,” Joann Self Selvidge told the board Friday. She said the DMC should keep tabs on the ownership structures of PILOT properties and provide for notification of all parties when a PILOT is terminated.
“I urge the Downtown Memphis Commission to take responsibility and show its leadership by setting a new precedent to ensure that all companies who are granted PILOTs are held to a higher standard of corporate responsibility,” Selvidge said.
Fleming said the agency wasn’t enforcing requirements that PILOT properties be developed and kept in good repair. She recited maintenance issues at 1 South Main, including a leaky roof and other exterior damage.
“While this is just one instance, these facts call into question the ability of the DMC to effectively manage this program … and to uphold basic standards of practice,” Fleming said. “As citizens, we are subsidizing this program, and the DMC needs to be held accountable.”
Reach reporter Wayne Risher at (901) 529-2874 or wayne.risher@commercialappeal.com.