Stuck at Broad and Hamilton with the Memphis blues again

Elkington/Performa sued over Beale Street money; two years behind in Jackson MS

Summer is here and things have been quiet over at the “Foundry” site opposite the Sovereign Bank Arena.

There is no residential/entertainment development to attract that hip, partying crowd of young folks with expendable incomes.

There is not even a construction trailer on the site. The old American Wire Rope plant Building 4 still sits alone, a brick island in a sea of asphalt.

Where is the highly anticipated Performa development that was going to turn that corner of Trenton into the region’s premier entertainment complex?

Nowhere.

And why is that?

Ask Mr. Elkington or one of his partners and they would undoubtedly tell us that it has to do with the economy and the mortgage crisis. And they are not unreasonable excuses.

The thinking here on the stoop is a little different. Based upon Mr. Elkington and Company’s track record in Jackson, Mississippi (read the Clarion Ledger’s article from last week), we think they are spread too thin and can’t get any financing to move any of their projects forward.

Of course, Mr. Elkington thinks it is the Mayor of Jackson's fault for all the negative comments that have been made about Performa's lack of performance!

Couple with that, the fact that the Beale Street Development Corporation went to court earlier this week to sue Elkington for $10,000,000 and you have the makings of the collapse of the Performa house of cards.

Performa has managed Memphis' Beale Street district since 1982, but somehow the Development Corporation and ultimately, the city of Memphis, have not seen one penny in revenues. Elkington has been trying to get copy-cat developments off the ground in cities like Jackson, Trenton and most recently Birmingham, Alabama. More and more questions about Elkington's ability to bring any of these projects to fruition are being asked.

It has been six years that the Mercer County Improvement Authority (MCIA), with the approval of the City of Trenton, has been dancing with this project. It is time to put it to rest.

Some say it is the only thing out there; Elkington is the only one to come forward with a plan, so we must continue on. The location is too valuable to let sit fallow.

We say it was an ill-conceived, faulty plan from the start that has only gotten worse as time goes on. It is obvious that Mr. Elkington is in no position to proceed with this (and may not be for quite some time). He should be relieved of his claims on the property immediately so that, when the economy does turn, we can find a developer with a common sense, workable and self-funded plan for the parcel.

We have said it before and we will say it again, Trenton does not need and obviously cannot support this kind of concentration of chain and franchise bars, clubs and restaurants. Even if it was built and opened tomorrow, can you imagine trying to keep the patrons under control at peak times with the limited police resources the city currently has. This entertainment complex is doomed fail.

Let’s grow up and get over our frat boy dreams of living in New Orleans North and seek out more rationale and fitting developments for our capital city.

Let’s bid adieu to Mr. Elkington and company. Now.

Another bad deal for Trenton

This morning's Times carried an article by staff writer Andrew Kitchenman about the continued delays in getting Performa Trenton's "Foundry" project off the ground. This time, it's the lack of closing on the loan from Citibank to finance the project.

To catch everyone up, Performa is a management/development entity headed by one John Elkington. Mr. Elkington and company's sole claim to fame is/was the management of the city-owned Beale Street entertainment district in Memphis, Tennessee. Several years ago, Mr. Elkington decided to leverage his "success" in Memphis by taking on the development of similar projects...mostly around the south. During the later years of the Bob Prunetti led County Administration, Performa proposed a development in Trenton. Originally set for the former Apex Lumber site and adjoining properties along S. Broad Street, the project was shifted up to the area opposite the Sovereign Bank Arena and encompassing the sole surviving building of the old American Steel and Wire Company plant, "Building Four" (this was to be the location of yet another failed development scheme earlier on in the site's history).

The project has been subject to numerous make overs as the developer has sought $10 million in public money along with a $21.8 million dollar loan from Citibank. While we are continually assured that this is a go and ground breaking will occur in this month or that month, nothing has happened.

Well, nothing that is except the failure of Performa Trenton LLC to make a tax payment of $16,800 on part of the property. "An oversight," Performa Trenton LLC partner and spokesman Lindsay Burbage said at the time.

And now we learn that the major financing for the estimated $50 million dollar project has been delayed as the lender seeks more equity from Performa. Perhaps not an unwise move on the part of CitiBank considering Performa's track record elsewhere.

Performa has had little, if any, success outside of Memphis. The Winston-Salem, North Carolina project was dropped because the developer couldn't get as much control of the properties as he desired. Performa was literally kicked out of Shreveport, Louisiana's "Red River District" for failure to perform as promised. The Farish Street project in Jackson, Mississippi has run aground time and again and the Mayor there is reportedly unhappy. And in Birmingham, Alabama Performa is also running into delays in securing loans for a proposed project.

Meanwhile, back in Memphis, the City Council has gone to court again to force Performa to turn over monies owed the City from the management fees collected. Coincidentally, this violates a court order issued in 2002, the same year Performa announced it's Trenton project. It seems as though there are allegations that Mr. Elkington has neither paid the City of Memphis it's share of the money collected for managing the Beale Street district nor placed said monies in a court mandated escrow account. Some estimations place the amount owed Memphis in "the millions."

Further, it has been reported that over a quarter of a million dollars is owed to a contractor for labor and materials used to construct a club in downtown Memphis, near Beale Street, that Mr. Elkington is a partner in. Horizon Construction has filed a lien in the amount of $229,562.39 against the owners of Ground Zero Memphis. The owner of the club is listed as Lee's Landing Commercial LLC with an address at Elkington's Beale Street office.

Taken altogether, it is hard to ignore the fact that Mr. Elkington's Performa Empire is built on shaky ground. It may just be time for the Mercer County Improvement Authority (of which Mayor Palmer's wife, Chris Foglio is a member) to take a step back and start looking at ways to extricate itself from this bad idea.