BEHIND BEALE
While more than 30 neon signs light up the iconic street, only a handful of operators own the bulk of the businesses
Malcolm Burt sold roses from a cart on Beale Street as a teen and helped build family-owned stores Memphis Music and Strange Cargo. Dyer County farm transplant Ty Agee climbed the ladder from door man at Rum Boogie Cafe to manager at Blues City Cafe to owner of a 50-seat diner, Miss Polly’s Soul City Cafe.
James Clark opened shop on Beale in 1983 and runs the entertainment district’s oldest continuously operating business, Eel Etc. Fashions.
Agee, Burt and Clark are longtime Beale Street merchants. But they’re not typical business owners in the threeblock-long district.
As the city of Memphis prepares to manage Beale Street after winning control of Downtown’s premier tourist zone in a long court battle, the question arises: Who owns the bars and shops the city is now in business with?
While the more than 30 neon-lit store- fronts on the street resemble small-town America, a review of records by The Commercial Appeal shows five operators own the bulk of the businesses.
The city actually owns most of the buildings, a part of the 1982 urban redevelopment program that revived Beale. Businesses lease the premises under long contracts, providing a cash flow city officials long have been eager to tap.
Last year, the businesses on the three blocks, known formally as the Beale Street Historic District, handed about
$1.9 million in rent and fees to the street’s manager and paid another $3.2 million in state and local sales taxes. Former Beale Street manager John Elkington, who relinquished control in a bankruptcy settlement, says the district generated more than $50 million in sales taxes during his 32year tenure.
City officials representing tax-weary Memphians have dreamed of Beale Street’s cash flow, long believing Elkington was raking in money that should be going into city coffers. Former mayor W.W. Herenton hired auditors and lawyers to investigate Beale’s finances soon after he took office in 1992.
But the dreams and the promise of a cash cow appear empty, unless the city finds a way to ramp up revenues substantially through expansion of the entertainment district. A recent report commissioned by the city estimates Memphis would receive between $133,000 and $256,000 this year, depending on whether the nonprofit Beale Street Development Corp. is entitled to a share of profits.
In 1982, the city signed a 32-year lease with Beale Street Development Corp., a nonprofit group linked to Beale’s Old Daisy theater, to redevelop the street, an abandoned and crumbling stretch of turn- of-thecentury storefronts. Beale Street Development then hired Elkington’s firm to manage and lease buildings in the district for 32 years. Elkington in turn negotiated long leases to entice operators onto Beale.
Even as the city wrangled with Elkington over the years for control of the district, Beale Street grew ever more popular as a tourist destination. Last year, USA Today labeled it America’s most iconic street.
What’s striking today on money or bank loans to be in business.”
Because the city and Elkington didn’t have deep pockets to fund real estate improvements, entrepreneurs built their own brands and niches. “What you have here is real,” said Peters. “It’s not part of the mallification of America.” Chain ownership is limited to Hard Rock Cafe, Coyote Ugly Saloon and Wet Willie’s.
Elkington convinced Peters, Lamm, the Burt family and others on Beale to invest in the district when it was nothing but potential. Lamm, 67, opened Rum Boogie in 1985 after earlier clubs had failed. He later added Blues Hall, King’s Palace Cafe, Beale Street Tap Room and The Pig on Beale. He built a restaurant management business, River City Management Group, that’s also involved beyond Beale in Spindini, a restaurant on South Main, and three Mesquite Chop Houses.
Expansion on Beale was about self-preservation, not muscling out competitors, said Lamm, whose businesses in the entertainment district took in $5.7 million in 2012, according to Elkington’s records.
“I think one thing that everybody down here realized early on is that an empty door next to you does not help you. If people can walk door to door down the street and have something to eat, be entertained, buy something in a store, that’s what they’re looking for. When it breaks up and there’s three or four vacancies they kind of stop and turn around and go the other way,” Lamm said.
Rum Boogie investors over the years have included tennis hall of famer Ivan Lendl and former Shelby County commissioner Clair Vander Schaaf. Elkington was the founding president, but left soon after the club was established. Lamm declined to disclose current investors, except to say they are friends and family.