Is Memphis Making (Another) Massive Mistake With Its Pyramid?

"Quite frankly, what revenue-producing, tax-producing activities would be well suited to be located in a pyramid?"

Such a churlish question from Memphis Mayor A.C. Wharton, Jr.! Pyramids make excellent seats of administrative power, long-term storage solutions for environmentally hazardous sarcophagi, and transit terminals to other metaphysical dimensions. A pyramid's potential for producing sustainable dark energy alone should never be discounted. Surely, Mayor Wharton and The New York Times know this much.

Granted, in Memphis, Tennessee, where the Great American Pyramid has sat empty for a decade, the revenue question has been a vexing one. Built in 1991 as a multi-use entertainment venue, it has served as the home of the University of Memphis men's basketball team and the Memphis Grizzlies, both of which decamped to the prism-shaped FedExForum in 2004.  

Now, the city is gearing up to re-open the Pyramid as a different kind of entertainment venue, one anchored by a 220,000-square-foot Bass Pro Shop retail outlet. The plan will create 600 jobs for Memphis and pledges to fulfill the Pyramid's potential as a tourist destination, complete with a long-promised observation deck.  

Yet what The New York Times fails to mention in its writeup about the development—which it describes as "a blessing that brings closure to one of the nation’s weirdest urban-development misfires"—is that the deal will cost taxpayers tens of millions of dollars. And if it's anything like other downtown dealings with Bass Pro Shops, it could spell trouble for Memphis. In fact, the Bass Pro Shops plan could be a curse worthy of the Tomb of Doom.

According to the Franklin Center for Government and Public Integrity, Bass Pro Shops has cost American taxpayers $1.3 billion in public deals since the late 1990s. (Its corporate twin and leading rival, Cabela's, has garnered another $551 million in state and local assistance and $400 million from the federal government over the same period.) Government subsidies have enabled Bass Pro Shops to build an empire to rival any pharaoh's.

Many of these deals have failed to materialize, leaving taxpayers stuck with the ticket. The St. Louis Business Journal reports that officials in Independence, Missouri, were left in the lurch for a $3.5 million payment on tax-increment financing bonds after a hotel to be built by Bass Pro Shops never materialized and Bass Pro Shops defaulted on its obligations. The deal, which promised some 50 different retail tenants, included an 18-acre lake and waterfall, all built with more than $70 million in taxpayer subsidies.

In a 2012 article for CityLab, Scott Reeder detailed how Buda, Texas, taxpayers financed a Cabela's outlet—to the tune of $60 million—complete with "a 30-foot artificial mountain, with taxidermied mountain goats and other wildlife, a 60,000-gallon freshwater aquarium and an exhibit of life-size African game animals." Buda went so far as to establish an economic development corporation that owns 20 percent of the Cabela's store and one-third of the land on which the property stands, rendering much of it null for the purposes of generating taxes.

I bet ancient Egyptians never imagined a pyramid would house a @Bass_Pro_Shops http://t.co/FK7JWy2PIg pic.twitter.com/k8Jn1ebrg8

— tannercurtis (@tannercurtis) December 3, 2014

The Bass Pro Shops deal could give these past morasses a run for their money, in terms of scope and significance. Memphis is a much bigger deal than Buda, Independence, or many of the other towns that have financed the retailer's expansions to their regret. Their number includes Leeds, Alabama, whose former mayor, Eric Patterson, warned Memphis against making a deal with Bass Pro Shops last year.  

The libertarian Beacon Center of Tennessee identified the Bass Pro Shops deal in Memphis as one of the state's biggest boondoggles of 2014. City taxpayers are on the hook (so to speak) for $30 million in renovations to convert the Pyramid into a retail store, upscale hotel, underwater-themed bowling alley, and replica Delta cypress swamp. According to that report and a similar one from the Tennessee Watchdog, the public subsidy for Bass Pro Shops amounts to throwing good money after bad: The city has reportedly spent $100 million in various efforts to lure a tenant to the Pyramid.

In fact, the efforts to bring Bass Pro Shops to the Pyramid date back to 2005, just a year after the facility went dark. In a 2007 article, Memphis magazine detailed how the city was pursuing negotiations with Bass Pro Shops to the exclusion of other interested developers, including one offer from the Memphis-based Ericson Group. On paper, the Ericson Group deal would have secured not just the financing for renovations—for a plan to turn the Pyramid into an indoor theme park with mixed retail—but also funding to pay off the city's outstanding $12 million public debt for the facility.

But in the years it took to secure the Bass Pro Shops plan, the Ericson Group proposal was never given final consideration from the city, according to reports. From the start, the Ericson Group intended to take the building off Memphis's hands, whereas Bass Pro Shops is only leasing the Pyramid. While the Ericson Group plan might never have materialized (especially given the credit crunch of 2008), Bass Pro Shops has a proven track record of sticking cities with the tabs for failed launches. Now that the opening has been pushed back from this month to May 2015, restaurants in the Pinch are feeling the pinch, with conflicting accounts arising for who's responsible the rent over the interim.

In his CityLab article, Reeder speaks with Ball State University economist Michael Hicks, who performed a study of seven Cabela's outlets that opened (with public incentives) between 1998 and 2003 and found no discernible gain in jobs in those communities. Another economist told Reeder that big-box hunting and fishing retailers had the same intoxicating effect on small towns that sports franchises sometimes have on big cities—convincing them to spend millions in public funds for prestige over sound economic interest.  

Memphis, a city of just more than 650,000 people, may be unique as a city hit by a development double-whammy. First, Memphis built the Pyramid, which the Division I Tigers occupied for less than 13 years and the Grizzlies called home for all of 3 years: a big-city mistake. A little more than 20 years later, Memphis is paying into a dream of outdoor-sports-retail tourism that has never manifested anywhere: a small-town bumble.   

All of this might have been avoided had Memphis officials never removed themysterious crystal skull that was discovered in the apex of the Pyramid soon after its construction. Perhaps the venture was doomed from the start. But Memphis is only doubling down on the bad juju by investing heavily in the notion that a downtown hunting-and-fishing outlet will bring people from far and wide to the Pyramid.

(Image via Flickr user seandavis)