On short notice, the Council learned about a "relocation opportunity" and approved a resolution to loan the Great American Steamboat Co. $9M to relocate and operate the American Queen out of Memphis. Tied to the resolution, but described as not crucial to the deal, was the addition of $9.75M to the City budget for the pods and walkways at Beale Street Landing.
(Click to enlarge photo of American Queen docked at Mud Island in 2005.)
The City's role in the deal? The Council was asked to approve a $9M loan of federal money going from the City to the boat company in hopes that it will create jobs and be able to repay the loan from docking fees and sales taxes.
Yes, it would be wonderful to once again have an overnight steamboat on the MS River and a new company bringing new jobs to Memphis. Is it a good business venture for the City? Here are some pros and cons.
Back in February when the idea 1st surfaced, the Great American Steamboat Co. had no employees, no web site, operated out of a turn-key bed & breakfast in New Orleans, and had an option to buy the American Queen from the U.S. Maritime Administration. The boat company says it will generate up to 587 new jobs and repay the loan by charging an additional $89.95 per person docking fee. Is it realistic?
On the other hand, the Council was told there's no City money involved - no risk - and guaranteed that 35% of the jobs created will go to minority employees. With all other overnight riverboat companies forced out of business by strapped finances, there may be a residual demand for boat trips on the Mississippi, and business leaders like John Pontius at Pittco and other businessmen at Morgan Keegan have committed to spearhead an effort to raise $16M to buy and refurbish the boat.
Before the resolution authorizing the loan to Great American Steamboat Co. hit the full Council for a vote, it was amended. Without any public discussion, the amendment added $9.75M to the City budget for the Riverfront Development Corporation to pay for the "pods" and zigzagged sidewalks at Beale Street Landing. The City will raise this additional $9.75M by issuing general obligation bonds. The debt service on the bonds will add about $880,000 each year to the City's operating budget. The allocation, which will need to go back before the Council before being appropriated, brings the total public cost of Beale Landing to around $41.5M.
Click HERE for the powerpoint presentation to the Council. (The last 2 pages are the original resolution.)
Click HERE for the video of the Council's Executive Committee meeting.
Click HERE for the amended resolution that added $9.75M to the budget.