Paul Simon released that anthem for Elvis Presley’s historic home in Memphis in 1986, about a decade after the famous singer’s death. Much has changed.
Covid-19 has hurt Graceland so much that bonds issued by the state of Tennessee tied to tourism revenue have defaulted. The city of Memphis, the state and Elvis Presley’s ventures are squabbling over how this happened and how to fix a tranche that turned $20 million of Graceland project bonds into “junk”.
Now, in the King’s house, there’s a lot of finger pointing.
“We have not defaulted,” he insists. “The state agency has defaulted,” said Joel Weinshanker, who has been managing partner of Elvis Presley Enterprises for a decade, referring to the economic development agency, EDGE, in Memphis and Shelby counties.
Not so fast, Stephanie Barrett, the agency’s director of marketing and communications, replied in an email. EDGE acts as a conduit…Graceland bonds must be repaid [taxes] All created in Graceland. Her email states: “Neither EDGE, city, county, state, nor any taxpayer shall be liable… for payment. ”
“Covid-19 has been the largest crisis to hit the leisure and hospitality industry in history,” a spokesperson for the Tennessee Department of Tourism Development said. Tennessee saw just 75 million visitors in 2020, down from 128 million the previous year, according to the department.
Graceland’s default could have repercussions for other tourist attractions and cultural sites across the country that have pledged revenue to raise funding.
Matt Fabian, partner at Municipal Analysis Management, said this bond offering was “unusually complex,” which is often an indication that there may be problems later.
EDGE originally issued $104.3 million in Graceland project bonds in 2017, some of which were not rated or identified as high-risk. Various revenue streams have been pledged from Graceland, linked to a slew of new taxes – sales, tourism, property – for different series of bonds. About $20 million of those are now in default.
As for the bond attorneys who agreed to issue the complex bond, an email from Bass, Perry Sims, said, “We’re out of the loop.”
Bond proceeds went to fund a massive, perhaps too ambitious expansion, say critics, beginning in 2015 and eventually adding new buildings and a 450-room hotel.
The Elvis Car Museum has also been added, A collection of over 100 of his sequin-embellished suits, other clothing, memorabilia, and more about music history, including black artists who have influenced or worked with Elvis. “That’s what Elvis wanted,” the singer’s ex-wife, Priscilla Presley, noted at the 2017 opening.
It worked. The hotel got the coveted Mobil Quadruple Diamond Award and twice hosted General Hospital’s annual fan conference. The cheapest adult ticket to the property, including a tour of the palace, is $77. VIP pass, all inclusive New attractions, private tour, lunch, and access to the singer’s private jets, is $190.
“Years ago, a visit was a car ride, and now he’s got them to stay for a few days,” Weinshanker said.
But as Graceland grew, the expansion pitted Elvis Presley’s companies against the city of Memphis. In 2018, Graceland sued the mayor’s office over delayed plans to build a The concert venue that may have violated the city’s lack of competition with the FedEx Forum and the Memphis Grizzlies. (The mayor’s office did not respond to several emails.)
With that project banned, Weinshanker began talking in interviews about a possible solution that was a fad: moving Graceland out of Memphis.
The image rights to the singer and much of his music are owned by Elvis Presley Enterprises and are still owned in part by his daughter, Lisa Marie Presley. (Weinshanker declined to give the percentage, but it was reported in court documents as 15%.) Emails are not returned to their representatives.
During the height of Covid, the property was closed or operating under reduced capacity, and revenue fell sharply.
But these financial challenges may be temporary. Attendance has been boosted in recent weeks by Baz Luhrmann’s “Elvis.” Crossed the $100 million mark in Variety reported that the July 15 US box office “has become one of the rare films where superheroes or dinosaurs don’t get that far”.
Weinshanker said Graceland’s attendance in the second quarter of this year was 200,000, more than all of 2020 and just 10,000 less than the same quarter of 2019. “And people are spending more.”
Also helping is the rise in tourism in August, as the city celebrates Elvis Week (the singer died August 16, 1977, at the age of 42).
There is a series of events over the course of a week, concerts, and a huge candlelight vigil closing in on the streets around Graceland. Thousands of fans flock there annually, in what some visitors call a “pilgrimage.”
In the meantime, what happens to investors in distressed bonds? They’ll just have to be patient.
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