MEMPHIS, TN (abc24.com) - The Memphis City Council is looking into options to recover revenue to pay for the FedexForum if the NBA lockout continues. That could include filing a lawsuit against the NBA, or its players.
“We are letting the world know we are serious," Memphis City Councilman Myron Lowery tells abc24.com. "We don’t want to raise taxes. I want citizens to know that if we have to raise taxes, we tried every other option first."
To pay for the $250 million FedexForum, the city and county took out a loan. Bonds were sold to agencies. When someone buys a ticket at the arena, just over a dollar of the ticket price helps pay back the loan. Money from sales tax at the arena also pays back the loan.
But here is the kicker. When the city and county put together the deal in 2001, no one ever anticipated a strike or lockout. The agreement with the Grizzlies details everything, from who buys a new scoreboard to the number of people who need to attend Grizzlies games to keep the team in town. The agreement fills a binder. Apparently none of the people negotiating the deal considered a provision about what happens if the team doesn’t play ball.
“Hindsight is 20/20," says Lowery. "It’s always better on the front end than the back end. A lockout was never contemplated.”
“I believe there was a lot of pressure to rush through the process," says Shelby County Commissioner Heidi Shafer, "and people did not read the contracts and protect the community in the best way."
A decade ago, Shafer led the charge to stop the construction of the FedexForum unless there was a vote of the people.
“It is nothing against the Grizzlies," she tells abc24.com. "They are here and we love them, but now we are in a bind that could have been avoided. We didn’t put enough safeguards in to protect the community.”
The financial group that oversees the loan repayment says there is no reason for people to panic. There is money in reserves, but the group admits there could be trouble down the road. That trouble could result in a tax hike.
“If the fees are not paid," says Lowery, "there will be no other recourse but to go back to the taxpayers."
