Great Performances
Memphis, Tennessee-based Performa Entertainment Real Estate, Inc. has perfected its model for entertainment-based mixed-use projects in urban areas.
Katie Foxworth Lee

Twenty-five years ago, a young developer was approached by the City of Memphis to revive its legendary Beale Street, which had been boarded up and fallen into disrepair since the April 1968 assassination of Dr. Martin Luther King, Jr. and the race riots that followed.

“Would you be willing to redevelop it?” the mayor asked. Three or four other developers had already tried, to no avail. The crime-ridden, high-vacancy street was becoming a serious problem.

John A. Elkington is chairman/CEO of Performa Entertainment Real Estate.

“Sure,” said the 32-year-old newcomer, a homebuilder turned commercial real estate developer who didn’t exactly understand the complexities of creating a downtown development without sufficient population to support it. But he would soon learn how to draw people in.

That newcomer was John A. Elkington, chairman and CEO of the Memphis-based company he helped found, Performa Entertainment Real Estate, Inc. Today, 25 years later, Performa is celebrating the rebirth of Beale Street, now one of the top tourist attractions in the state of Tennessee with over 6 million annual visitors. Performa has also carried its urban entertainment mixed-use formula to other cities, including Trenton, New Jersey; Jackson, Mississippi; Birmingham, Alabama; and Fredericksburg, Virginia. With several new downtown developments underway, Performa continues to celebrate each community’s music, culture and history — which makes for a truly unique experience at any Performa project.

BEALE STREET
Memphis, Tennessee

B.B. King’s, which started on Beale Street in Memphis, is a tenant in several Performa projects.

Starting in 1983, newly formed Performa Entertainment Real Estate, Inc. was able to help transform downtown Memphis from an urban wasteland into an entertainment epicenter, pulsing once again with the blues, rock and rockabilly that made Memphis famous, lined with unique restaurants, and thronged with crowds enjoying good food and drink. Other tourist draws included the FedEx Forum, home of the NBA Memphis Grizzlies, which opened in 2002; the world-famous Peabody Hotel and adjacent Peabody Place; and AutoZone Park, home of the minor league baseball Memphis Redbirds. Along the way, Performa has added 100,000 square feet of restaurants, nightclubs and retail shops, including Hard Rock Café, B.B. King’s Blues Club, Pat O’Brien’s and Coyote Ugly. Beale Street now hosts over 70 events a year. An outdoor amphitheater, W.C. Handy Park, accommodates 3,000 music fans. Beale Street was revived once more.

With the rousing success of Beale Street, Performa was able to provide a template for urban entertainment districts throughout the country. The company continues to hone in on cities that can attract additional visitors, conventioneers, business travelers and group, leisure and recreational tourists. The area must have a distinctive history, unique culture and local flavor, as well as a vibrant music scene. Performa focuses on attracting local and regional tenants as opposed to national tenants. If national tenants, such as Hard Rock Café, are used in a project, they must connect to the local community. At the Hard Rock on Beale Street, for example, 90 percent of the memorabilia inside is from Memphis and the surrounding areas, celebrating the 18 members of the Rock & Roll Hall Fame that hail from the Memphis area.

Beale Street bustling with activity and visitors. Performa Entertainment Real Estate developed 100,000 square feet of entertainment retail and restaurant space on the legendary Memphis thoroughfare.

“If we were trying to put Applebee’s, Chili’s and Macaroni Grill [in a project], I doubt very seriously people would come to it,” Elkington says. “There are things that are unique to the downtown area that are not found in the suburbs.”

It’s this unique flavor that gives people a reason to visit, Elkington says. “On Beale Street, our tenants average from the lowest who does $386 per square foot to the highest who does $986 per square foot, which are enormous numbers,” he says. “The reason they do is we have a product that’s not found in the suburbs; it’s really not found in the region.”

LEE’S LANDING
Memphis, Tennessee

Lee’s Landing will be a hotel and restaurant project adjacent to Beale Street in Memphis. Fifty percent of the ownership in the development is African-American.

Adjacent to Beale Street and the FedEx Forum is a new $52 million development underway called Lee’s Landing. Included in the project are a 220-room Westin hotel, a 571-car parking garage and 17,000 square feet of restaurant and entertainment space.

“The interesting thing about this project is we made sure that 50 percent of all of the owners of this development would be African-American,” says Elkington.

In November 2006, the parking garage opened with 73 percent minority ownership, and the Westin hotel, also minority-owned, opened last month. The four restaurants rounding out the project include Ground Zero Blues Club, which is owned by African-American actor Morgan Freeman; King Biscuit Café; Crescent City; and The Daily Grill. All are conveniently located opposite the FedEx Forum.

THE FOUNDRY ON 129
Trenton, New Jersey

The Foundry on 129 in Trenton, New Jersey, brings some of the first retail to be developed in 30 years to the city. It will consist of 100,000 square feet of retail and entertainment space.

Another hallmark of Performa’s approach to development is its willingness to take on tough projects, such as turning a dilapidated Beale Street into a top tourist attraction. The company took a similar approach when it reached the city limits of Trenton, New Jersey, a tough town with an infamous reputation. No developer wanted to touch Trenton with a 10-foot pole. It had been 25 years, Elkington estimates, since any new apartment buildings or retail was developed in Trenton.

Next to the Sovereign Bank Arena and near a minor league baseball park, Performa plans to redevelop the downtown area into 100,000 square feet of retail, entertainment and restaurant space that includes B.B. King’s Blues Club, Funny Bone, Wet Willie’s Daiquiri Bar, and Toad’s Place, a music venue. The Foundry will also include a 702-car parking deck and a 30,000-square-foot plaza, which will be utilized for live entertainment.

Live entertainment is another consistent theme throughout Performa’s projects. “In every one of our developments, we have a park that works as an amphitheater,” Elkington says. “In Memphis, it’s W.C. Handy Performing Arts Park; in Trenton, we have this 2-acre plaza for music performances, food festivals, and arts & crafts shows.”

The Foundry on 129, located on Route 1 and 129, will open in 2009. The development is also situated near the new Riverline light rail system, which connects to regional transportation.

FARISH STREET
Jackson, Mississippi

Farish Street in Jackson, Mississippi, is another entertainment retail project under development by Performa. Phase I is scheduled to open in February 2008.

In Jackson, Mississippi, Performa is developing 100,000 square feet of retail, entertainment and restaurant space anchored by B.B. King’s on historic Farish Street just 1 block away from the state Capitol. Phase I, which will include 80 apartments over first-floor retail, will open in February 2008. These mark the first new apartment buildings constructed in downtown Jackson in 30 years.

“They’re also building a new convention center just 2 blocks away,” Elkington says. “Parkway Properties, a major office REIT, is building a new office complex directly across the street from the entrance to Farish Street. It’s a pretty exciting redevelopment of the whole area.”

Like many of Performa’s urban developments, Farish Street uses tax credits and subsidies to offset the cost of developing in a difficult historic district, which often imposes rigorous building codes, etc. Because Farish Street is part of what is known as the “GO Zone” (the Gulf of Opportunity Zone), Performa is able to take advantage of a 26 percent historical tax credit, the cost of which can be depreciated over 10 years instead of 39 years.

Birmingham, Alabama

Last month, Performa was selected by the Birmingham-Jefferson Civic Center board to redevelop an area adjacent to an arena and convention center next door to the Southeastern Conference (SEC) headquarters building. Before the end of the year, Performa plans to break ground on 160,000 square feet of entertainment retail, a Starwood brand hotel, 108 units of housing over the retail space and a parking garage.

“It’s a public-private partnership with the Birmingham-Jefferson Civic Center board, who secured a 99-year ground lease on the property,” says Elkington. “But no public money is going into this project; it’s all private money. We’re not subsidizing anything, which is unique.”

RAPPAHANNOCK RIDGE AT CELEBRATE VIRGINIA
Fredericksburg, VA

Rappahannock Ridge in Fredericksburg, Virginia, will be part of Celebrate Virginia, a 2,400-acre master-planned development. The project will include 140,000 square feet of retail, dining and entertainment, a bed-and-breakfast hotel, and the new Virginia Music Hall of Fame.

In Fredericksburg, Virginia, there is a master-planned development called Celebrate Virginia, a 2,400-acre mixed-use “retail resort” along the Rappahannock River, located along the Interstate 95 corridor between Washington, D.C. and Richmond. Celebrate Virginia includes a mall, live theater, water park hotel, convention center and the National Slavery Museum. To this already bustling activity Performa plans to add 140,000 square feet of entertainment retail and a bed-and-breakfast hotel component, the 60-room Rappahannock Ridge Inn Bed & Breakfast.

“We’re also building the Virginia Music Hall of Fame,” Elkington says. “Virginia has such a great bluegrass, jazz and country music history — country music started in Bristol, Virginia.”

Continuing to celebrate Virginia’s rich musical heritage, Performa has secured an operator to open an Ella Fitzgerald jazz club to honor the late jazz great, who hailed from the Cogwater, Virginia, area. Ralph Stanley, the father of bluegrass, is also a Virginia native and has inspired another Performa-developed music facility at Rappahannock Ridge.

“The whole project is about music, history and culture,” Elkington says. “All of our developments are involved in that. In Jackson, all of the clubs will have live entertainment and there will be two Mississippi juke joints that will showcase local talent to go along with the restaurants and retail.”

The Performa Approach

In the future, Performa plans to develop three projects per year and has several different cities on its radar screen, including Atlanta and northwest Florida, in 2007. It is also beginning the leasing stages of its new project in Birmingham.

“We’re going into cities that potentially have the ability to attract leisure tourists and group tourists,” says Elkington. “That’s a big thing for us because the population itself may not be enough to generate the dollars that you need to make it work.”

Elkington says Performa generally targets five groups of people to attract to its projects: local residents who live in the MSA, group tourists, leisure tourists, conventioneers and business travelers. In Birmingham and Trenton, though, a sixth group has been added: recreational tourists. These include people who attend sporting and concert events. According to Elkington, the Birmingham-Jefferson Civic Center receives 2.5 million visitors annually, and Sovereign Bank Arena in Trenton, New Jersey, is the seventh largest concert venue in the United States.

Over the years, Performa has perfected its approach to developing entertainment-based projects that attract tourists. “We’ve been very successful, but it was very tough initially,” Elkington admits. “We’ve gone into very tough cities. But you’ve got to have something that people cannot find other places. You’ve got to be careful with national tenants. But you’ve also got to have a very aggressive marketing program and a very aggressive effort to draw group tourists and leisure tourists in.”

Another key component of Performa’s projects is security. Lack of security has been the downfall of some similar urban mixed-use projects in cities nationwide. “People know they can come [to Beale Street] and they’ll have a great time, and it’ll be secure,” Elkington says. “That’s traditionally what’s killed these entertainment districts around the country. They’ve been destroyed by lack of security and the lack of really great tenants.”

To that end, Performa focuses on installing on-street cameras, employing 24-hour security personnel, securing its parking garages, etc. The company also gets the local government involved. In Memphis, the city government is crucial to the safety and security of both Beale Street and Lee’s Landing. “The city is a really active partner,” Elkington says. “That’s part of the business — if you don’t, you’re out of business.”

Performa also spends a lot of time looking for distinctive tenants. “We’re moving more into retail,” Elkington says,  “and finding unique regional retailers, because the numbers justify that.”

Learning what kind of project can be justified by the numbers is exactly what John Elkington and Performa had to discover for 25 years while working on Beale Street in Memphis. Judging by the results in Memphis and subsequent success in other cities, Performa’s got the numbers to justify just about anything.


©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.