Beale Street Operations Plan

Transcription

1 Beale Street Operations Plan April North Main Street, Memphis TN (901)

2 Table of Contents Executive Summary... 2 Legal Overview... 2 Managing Entities... 3 Management... 4 Management Team... 4 Merchant Leases... 7 Reporting Requirements... 9 Procedures Insurance Tenant Relations Emergency Procedures Finance Budget Auditing Marketing and Events Marketing Events Appendices (A) Operating Budget (A.1) Actuals (B) Events Listing (C) Vending Rules and Regulations (D) Special Performance Forms

3 Executive Summary The Downtown Memphis Commission (DMC) has agreed to coordinate and provide executive leadership for the interim management of the Beale Street Historic District (BSHD) on behalf of the City of Memphis until permanent management is put in place. In addition, DMC has agreed that it will prepare an interim operations plan for the City that will describe the functions to be performed and the responsible parties to perform such functions. This report contains essential information for the proper management and operation of the BSHD. The report is organized into three sections: Management o Merchants and Leases o Reporting Requirements o Procedures o Insurance o Tenant Relations o Emergency Procedures Finance Marketing and Events Legal Overview For over thirty years Performa Entertainment managed and developed BSHD. In a Bankruptcy Court approved settlement agreement Performa Entertainment agreed to assign its sublease on Beale Street to the City of Memphis. The City owns BSHD and Beale Street Development Corporation (BSDC) holds the master lease. BSDC had sublet the properties to Performa Entertainment. The City has entered into an agreement with the Downtown Memphis Commission to manage BSDC on an interim basis. DMC has agreed that it will coordinate and provide executive leadership for the interim management of BSHD on behalf of the City of Memphis during the interim period until permanent management is identified and put in place by the City. DMC will report to the Mayor on the operation of BSHD and the progress of the transition on a regular basis. The City and its operating divisions will provide support to DMC in managing BSHD as requested. 2

4 Managing Entities City of Memphis The City of Memphis retains ownership of the Beale Street Historic District (BSHD). In addition, through the Bankruptcy court approved settlement agreement the City has been assigned the Beale Street sublease. Downtown Memphis Commission The Downtown Memphis Commission (DMC) is the administrative representative for the City of Memphis. The DMC provides all direct management of BSHD activities including staffing, fiscal oversight and coordination with the City of Memphis and key partners. Beale Street Management Beale Street Management (BSM) is the operating arm for the DMC. BSM staffs the daily management of the street including event coordination, security oversight, maintenance and merchant/retailer coordination and communication. 3

5 Management The DMC is providing management and oversight of the Beale Street Historic District utilizing pre-existing DMC staff and experienced Beale Street staff hired by DMC effective January 1, Overall responsibility for management will rest with the President of DMC, Paul Morris. He will be assisted by other DMC staff to provide overall guidance and oversight to the operations of Beale Street marketing and events, finance and administration, and lease management. Beale Street Management Team Paul Morris, President DMC Leslie Gower, Vice Presidentof Marketing and Events DMC Jerome Rubin, Vice President of Operations Jim Street, Chief Financial Officer, DMC Jaske Goff, Vice President of Planning and Development, DMC Jon Shivers, Events Coordinator, BSM Al James, Manager, BSM Lew Winston, Night Manager, BSM Diane Glasper, Office Manager, BSM Cochae Powell, Property Maintenance, BSM Maxie Hardy, Property Maintenance BSM 4

6 Beale Street Management Team Responsibilities Al James, Manager Mr. James is responsible for all aspects of day-to-day operations of the Beale Street Historic District common area. The Manager interacts with the District s merchants, local government agencies, local businesses and customers. Lew Winston, Assistant Manager aka Night Manager Mr. Winston is responsible for operation of Beale Street Historic District common area during evening hours with special emphasis on safety and security. The Night Manager deals with complaints, problem solving, disturbances, special requests, and other issues that may arise. Jon Shivers, Events Coordinator Mr. Shivers is responsible for marketing efforts for the District, including advertising, public relations, merchant communication, special events, and customer service. The Events Coordinator coordinates all access and events (public & private) on the street and acts as the main customer service point of contact for merchants and event planners. L. Diane Glasper, Office Manager/Leasing Permits Ms. Glasper is responsible for administrative matters and acts as support staff for the remainder of the staff. In addition, she directs the leasing of temporary space, vendor permitting and is the custodian of lease files and other important contracts and records. Cochae Powell, Property Maintenance Mr. Powell is responsible for completing grounds work as directed by Manager which may include picking up trash, sweeping curb and dumpster areas and vacuum street with commercial litter vacuum. Property Maintenance staff are also responsible for alerting the Manager of any unusual occurrence and/or damage that have taken place or that may occur. 5

7 Maxie Hardy, Property Maintenance Mr. Hardy is responsible for completing grounds work as directed by Manager which may include picking up trash, sweeping curb and dumpster areas and vacuum street with commercial litter vacuum. Property Maintenance staff are also responsible for alerting the Manager of any unusual occurrence and/or damage that have taken place or that may occur. Office Location(s) Beale Street Management Offices 203 Beale Street, Suite 300 Memphis, TN Downtown Memphis Commission Offices 114 North Main Street Memphis, TN Hours of Office Operation Beale Street Management offices follow the Downtown Memphis Commission operations hours unless otherwise specified by job obligations and/or special events. The BSM staff regularly works nights, weekends and holidays when BSHD is the most active. 6

8 Merchant Leases DMC working though BSM maintains responsibility for the fiscal and property maintenance of 34 properties on Beale Street. Beale Street Merchants Association Beale Street Merchants Association is the tenants organization of Beale Street. It promotes and protects the interests of Beale Street businesses and sponsors Beale street events. Currently, the association is composed of about thirty businesses located in the Beale Street Historic District. The Association was formed to best utilize the joint resources of the businesses in the district and work as a whole to develop the Beale Street Historic District to its fullest potential. It is the Association's mission to promote Beale Street in its capacity as the number one tourist attraction in Tennessee as well as educate residents in the surrounding region of the importance of the Beale Street Historic District Heritage. The association can be reached at the following location: 154 Beale Street (Upstairs) Memphis, TN Phone: Fax: Leases It is the responsibility of DMC acting as the agent for the City to manage the Subleases that have been executed with the subtenant merchants in the BSHD. Currently there are 34 executed subleases, and they include the following: See Table on Page 8 7

9 Beale Street Active Tenants Tenant Address Tenant Address Blue s City Café and Grocery Store Beale Kingdom Kreations 203 Beale 3 rd floor B.B.. King s Beale BSM 203 Beale 2 nd floor Club Beale Tri State 203 Beale 2 nd floor Memphis Music 149 Beale Dyers 205 Beale Black Diamond/Tater Red s Beale Wet Willies Beale Beale Street Merchants Association 154 Beale Upstairs Ground Zero 310 Beale Ms. Polly s 154 Beale Downstairs Hard Rock 315 Beale Beale & Second 156 Beale Upstairs People s Billiard Club 323 Beale Jimmy G s 156 Beale Downstairs Beale Street Development Corporation 323 Beale Flynns 159 Beale Withers Collection LLC 333 Beale King s Palace Beale Eel Etc. 333 Beale Pig on Beale Beale CUS Coyote Ugly Saloon 326 Beale River City Management Beale Upstairs Old Daisy BSDC 329 Beale King s Palace Beale Downstairs New Daisy 330 Beale Strange Cargo Beale MPD 340 Beale Rum Boogie/Blues Hall Beale Blue Note Bar & Grill Beale George Hunt/T.B.A. 174 Beale Central Foods Beale Silky O Sullivan s Alfred s 183 Beale 197 & 201 Beale 8

10 Reporting Requirements City of Memphis DMC will provide the City of Memphis with regular reports including financial reports for Beale Street including a balance sheet, aging report on accounts receivable, and statement of revenues and expenditures for each month and year-to-date in accordance with generally accepted accounting principles. Beale Street Development Corporation Pursuant to the Master Sublease, quarterly financial reports will be provided to BSDC. Elkington Real Estate Group Pursuant to the Settlement Agreement, a written report will be provided to Elkington Real Estate Group or its Commissions Designee by the 15 th of each month, which sets out in detail the total amount of rental income received from each sublease from the prior month. In addition, written notice will be provided to Elkington Real Estate Group within 30 days of any extension, assignment, and/or assumption of an existing Merchant sublease, or any change in existing Merchant sublease status such as expiration or termination of such sublease without extension, assignment, and/or assumption of sublease. 9

11 Procedures Records Management DMC will keep and maintain, at its office, separate and independent records, in accordance with generally accepted accounting principles, devoted exclusively to its operation of Beale Street. Such records shall contain all entries reflecting the business operations of DMC under its interim management agreement. Inspections Daily/Weekly This section outlines the requirements for the conduct of regular inspections of the Beale Street Historic District common areas. Regular inspections are performed to ensure a clean and safe environment is maintained. These inspections aim to identify any systematically occurring hazards and to minimize risks to health, safety or the environment. ü ü ü ü ü Annual Inspect Beale Street sidewalks and street for any debris. Determine cause of any broken glass. Ensure trash cans are emptied Report any damage to tenant structures to responsible party. Ensure elevator at 203 Beale is in good working order. Conduct annual scheduled physical inspection by professional structural inspector to assess the exterior and interior condition of each City owned building, and to determine what repairs need to be made in order of urgency. Maintenance DMC shall keep the Beale Street Historic District (BSHD) in a clean, sanitary, and safe condition. The following outlines the maintenance requirements of BSHD common areas. ü Maintain cleanliness of office area. ü Sweep sidewalks and vacuum street with commercial litter vacuum -- Elephant Vac (daily/seasonal). ü ü Empty waste receptacles (private company Monday and Friday) Mow grass (seasonal) 10

12 ü ü Contract with outside cleaning service for special events and holiday weekends (seasonal) Procure port-a-johns for holiday weekends and special events (i.e. Memphis in May) Security The Memphis Police Department is responsible for the security and safety of BSHD. Each merchant is responsible for the security and safety of their interior leased space. DMC provides private security service at special events and on certain weekends. It is the responsibility of these security personnel to identify hazardous situations that may cause injury to our customers, merchants or to the property itself. The security service is selected through a RFQ process in partnership with the Merchant s Association and a DMC coordinated review committee. Private security duties are to include the following: Greeters, positioned at the entrances to Beale Street (Second Street, Third Street, and Fourth Street) will meet the patrons coming onto and leaving Beale Street. ü ü ü Private security will perform ID checks on minors who are not accompanied by their parent(s) and those that a reasonable person believes to be underage of 21. Private security will perform weapon screenings to patrons coming onto Beale Street by the use of metal detecting wands. Private security will ensure that alcohol is not brought onto or is removed from the Beale Street Historic District when on duty. Will prohibit illegal panhandling on Beale Street and will provide general information about the activities within the district. Officers, unarmed security personnel to patrol Beale Street, the alleyway and other areas where individuals may try to bypass entry points to Beale Street. ü Private Security will assist the Memphis Police Department with loitering, panhandling, and crowds. Supervisor will coordinate with DMC s security manager to ensure proper staffing per approved budget schedule, and that personnel are trained and are performing duties as assigned. 11

13 In addition, the following security policy and procedures are to be followed: ü ü ü ü ü ü ü ü ü Minors are allowed admittance on Beale Street in the company of an adult up until 11:00 p.m. Minors cannot be on Beale Street after 9:00 p.m. without adult supervision. No bottled beverages are allowed outside the clubs on Beale Street at any time. No loitering or panhandling is allowed on Beale Street There will be absolutely no selling of candy, flowers, or souvenirs without a vendor permit from DMC. No outside containers or coolers of any kind can be brought onto Beale Street. There will be no illegal parking in the alleys. There will be no illegal roll-away bars or portable bars on Beale Street. Patrons are not allowed to leave BSHD with any cups, bottles, cans or other containers. 12

14 Insurance The lease agreement assumed by the City requires specific insurance coverage. DMC is required to maintain the appropriate level of insurance coverage at all times. In addition, all merchants, vendors and special events hosted on the street are required to have insurance documentation detailed in their lease agreements. The following is information on the insurance coverage DMC has secured for BSHD: Insurance Agent George Felts. CIC, AAI, CRM, CWCA Vice President/Member of the LLC Lipscomb & Pitts Insurance, LLC 2670 Union Avenue Extended, Suite 100 Memphis, TN General Liability Insurance Indian Harbor Insurance Company Premium: $118,944 ($110,000 Premium + $250 Fees + $5, Surplus Lines Taxes + $2,750 Terrorism + $ (Terrorism Taxes) Limits of Insurance: General Aggregate Limit - $2MM Products Completed Operations Aggregate Limit - $2MM Personal & Advertising Injury - $1MM Each Occurrence Limit - $1MM Damage to Premises Rented to You - $50K Medical Expense Limit: Bodily injury and property damage per claim deductible - $5K Personal and advertising injury liability per offence deductible - $5K 13

15 Excess Liability Indian Harbor Insurance Company Limit: In Excess of: $5MM General Liability - $1MM Occurrence Limit; $2MM General Aggregate Limit; $2MM Completed Ops/Products Aggregate Limit; $1MM Personal & Advertising Injury Limit. Premium: $52, ($49,000 Premium + $250 Fees + $2, Surplus Lines Taxes + $1,133 TRIA (Terrorism Premium)+ $56.65 (Terrorism Taxes)). 25% Minimum Earned Premium Property Insurance Lloyd s Premium: $96,379 ($90,000 Premium + $4,500 TRIA (Terrorism) + $1,379 Inspection Fee + $500 Service Fee). Minimum Earned Premium: 35% Total Insured Value: $23,848,560. Buildings only, Includes Earthquake and Equipment Breakdown coverage, does NOT include Business Personal Property, Rental Income, etc. Deductible: $25,000. Valuation: Co-insurance: 90%. Replacement Cost. For any buildings that are vacant the valuation is Actual Cash Value. Tenant Insurance Certificates DMC has insurance requirements for all merchants as outlined in the individual property leases. 14

16 Tenant Relations Complaints The following steps will be taken to resolve any complaints: ü Acknowledge Complaint in writing ü Log in the complaint and any relevant data ü Categorize it for resolution and record-keeping ü Investigate the complaint ü Resolve the complaint in a manner consistent with DMC policy Signage and Display Guidelines Review and approval of signage and displays within the Historic District is the responsibility of the Downtown Design Review Board (DRB). Beale Street Management will coordinate requests for signage or displays with the DRB. For signage and displays approvals must include Michael Sicuro at Division of Housing and Community Development (HCD) Compliance Department. Once approved by HCD the approval will be sent to E. Patrick McIntyre, Jr. at Tennessee Historical Commission, per Section 106 of the National Historic Preservation Act. Loading and Unloading Before 5 PM on non-event days loading and unloading can take place on Beale Street. After 5 PM and on event days loading and unloading can take place in one of the alleys behind Beale Street. In addition, there is a loading zone on Rufus Thomas. In addition, Beale Street is open to traffic from 6 AM until 10 AM every day. Trash and Waste Disposal DMC contracts with a private company to pick up and dispose of trash in trash bins along Beale Street. Tenants are responsible for their own trash collection. There are two trash compactors located in the alley. These trash compactors are for the use of DMC and for tenants that provide funding for their maintenance. 15

17 Emergency Procedures Emergency Contacts During normal business hours contact the Beale Street Office (901) After Business Hours After business hours contact the Night Manager, Lew Winston at (901) or the Manager, Al James at (901) Theft or Vandalism Tenants should call the Memphis Police Department to report any theft or vandalism to their premises, in addition to reporting the incident to BSM. Injury or Illness With any medical emergency tenants are to contact 911 for emergency assistance. Lost and Found All lost and found items discovered in merchant s store should be kept there. If an item is found in the common area, it should be taken to the BSM office on Beale Street. 16

18 Finance The Chief Financial Officer of DMC will manage financial operations for BSM. These operations include all accounts payable, accounts receivable, financial reporting, budgeting and auditing. Accounts Payable The purpose of Accounts Payable is to ensure that all Beale Street Historic District funds are disbursed and recorded in accordance with generally accepted accounting principles. This area includes all payments for services, leases, and any legal requirements under the Settlement Agreement. The following is intended to reflect certain terms of the Settlement Agreement, but the Settlement Agreement itself should be consulted and nothing herein is intended to modify or interpret the Settle Agreement. Payments of Attorney Fees (Settlement Agreement) Pursuant to the Settle Agreement, Beale Street Merchants Association (BSMA), Merchant sub-lease subtenants will pay and receive rent credits up to a total of $420,000 in payments of attorney fees to BSMA s counsel and Performa Entertainment s counsel. BSMA Merchant sublease subtenants will make such payments and receive credits as follows: 1. $360,000 Payment The Merchant sublease subtenants who contribute to such payment of attorney fees shall be entitled to rent credit up to the amount by such Merchant sublease subtenant but limited by the following: The Merchant sublease subtenant which contribute to such payment of the described attorney fees shall be entitled up to $360,000 rent credit over five years at $6,000 per month. 2. Additional Payment In addition, if Beale Street Historic District has a net profit including any payment to BSDC, the Merchant sublease subtenants who make an additional payment of attorney fees up to $60,000 shall be entitled to an additional aggregate of $60,000 in rent credits upon such payment. However, no more than $1,000 of such additional payment shall be taken 17

19 in aggregate by Merchant sublease subtenants who make such additional payments in any given month. 5% Leasing Commission (Settlement Agreement) The City of Memphis/DMC is required to pay to Elkington Real Estate Group or its Commissions Designee on the 15 th day of each month a five percent (5%) leasing commission of all rental income received from BSHD merchant subleases, effective January 1, 2014, and any current billboard or sign leases within the District until November 29, The 5% leasing commission will apply to all future subleases by the current Merchant Sublease subtenants and all extensions of the Merchant subleases, provided, however, that no leasing commissions shall be paid to Elkington Real Estate Group on rent for which payment becomes due and payable after November 29, These 5% leasing commissions will be paid on the 15 th day of each month for all rental income received during the preceding month. In calculating the 5% leasing commissions, rent credits granted as described in the Settlement Agreement and taken by the subleases for the payment of attorney s fees (see section III.B) will not be included in such calculation Lease Section 4.1 Fee Based on 10.5% Gross Rental Income DMC is required to accrue and retain for the City of Memphis a 10.5% Gross Rental Fee that is due the City as the Lessee successor per section 4.1 of the sublease agreement. Pursuant to the Master Lease, any income earned by the City from BSHD shall be used in connection with the redevelopment of downtown Memphis as determined by the Mayor. Vendors Vendors are required to provide their taxpayer identification number (TIN) to DMC finance using IRS Form W9. Vendors must provide an invoice or written confirmation of total cost including taxes for the full amount of payment. Payment Processing All supporting documentation including but not limited to invoices, statements, vouchers, contractual agreements, and receiving reports will be reviewed by the DMC Chief Financial Officer. Expenses will also be reviewed for assurance that they are being paid from the proper account. Payment processing involves proper supporting documentation, proper invoice, proper obligating document, 18

20 or any other supporting documentation. Once the payments are approved by the Chief Financial Officer checks will be issued by DMC for payment. Accounts Receivable The purpose of Accounts Receivable is to ensure that all moneys due BSHD are paid and recorded in accordance with generally accepted accounting principles. This area includes rental income, fees, and collection procedures. DMC Reimbursement DMC shall be reimbursed for its reasonable costs incurred in the management and operation of Beale Street Historic District out of the rents, receivables, revenue, payments and proceeds collected and received by DMC on behalf of the City. Such costs will include DMC s out-of-pocket expenses as well as pro rata employment costs attributable to managing BSHD on behalf of the City. Gross Rental Income 1. Base Rent Base Rent refers to the minimum rent due per the lease agreement with subtenants. It is invoiced on the first of each month. 2. Percentage Rent Percentage Rent is calculated based on the subtenants' monthly Gross Sales, less Base Rent. Percentage Rent is also received from those subtenants that have no Base Rent. 3. Signs Sign & Billboards income is derived from the agreement with Clear Channel Outdoors, the current agreement calls for the payment of base rent of $1, versus 50% of Gross Revenue produced by the various billboards that are not included in the Beale Street Historic District but under the control of DMC and the amounts are transferred to the DMC when received. 4. Vendor Permits A fee charged for the use of the leased area by persons selling miscellaneous merchandise, such as photos, flowers and art. These are short-term vendors and the number will vary by week depending on the time of year and events scheduled 19

21 Non-Gross Rental Income 1. Special Events- Sponsorships Reimbursement received for Promotional events held within the leased area. Also includes any fixed annual income per sponsorship agreements and contributions raised to offset the cost of various events for promotion and marketing of the leased area. 2. Common Area Maintenance Fee (CAM) Reimbursements for expenses associated with the common area maintenance of BSHD are reflected in the CAM Fees and are realized through CAM charges to the subtenants per the lease agreements. This amount is detailed in the CAM Budget (Appendix A) which includes the nature of the expenses and the individual tenants CAM amount. The CAM charges include a 15% CAM Administrative Fee, which is invoiced to the subtenants per the lease and is used to offset the indirect cost of administering and servicing the operations and collection shortfalls. Commissions & Fees 1. Tenants Sub Lease - CAM ADM Fee DMC collects the - 15% fee added to the CAM expenses to cover the cost of administrating and servicing CAM. This fee helps offset CAM expenses not recovered by the CAM fees collected and is not retained by the DMC. Collections It is the purpose of the DMC s collection procedure to collect the proper amount of lease income. The goal is to encourage and ensure the merchants resolve debts as quickly as possible through the methods best suited to their situation, help merchants achieve long-term compliance, and deter noncompliance. 1. Lease Provisions The lease reflects the merchant s obligation and commitment. 2. Payment Due Dates Any due date for payment shall mean the end of the business day (5:00 p.m.) on the given due date. If the due date falls on a Saturday or Sunday, the payment is due in DMC office no later than 5:00 p.m. the following Monday. 20

22 3. Fixed Rent and CAM Typically billed on the first day of each month and must be received in DMC office by 5 p.m. on the 10 th day of each month. 4. Percentage Rent Copy of tenant State Gross Sales Report delivered to DMC by the end of business day, 5 p.m., on the 20 th of each month for the immediate preceding month. (Some tenants calculate their Percentage Rent and submit payment along with Gross Sales Report). 5. Collections Follow-Up Accounts Receivables are reviewed each week. Delinquencies are reviewed and follow-up assignments are made. Follow-up is conducted by a DMC staff member. Such follow-up may occur in the form of a telephone call, reminder , or visit. Records are kept on each follow-up attempt. 6. Late Charges A late charge as prescribed in tenant lease for Fixed Rent, CAM, Percentage Rent, and Utilities shall be automatically applied to the balance due on any account not paid by 5:00 p.m. on the due date. 7. Month Old Balances Due Such charges plus late charges will be included with the following month s new billing. At this point, two months billings are due. 8. Attorney Meeting If after the 10 th of the second month with no payment, the account will be reviewed with DMC attorney for the purposes of probable legal action. 9. Legal Action The tenant s lease requires the tenant to pay any DMC legal action necessary in the collection process. Financial Reporting The lease agreement assumed by the City and managed by DMC requires that DMC shall keep full, true, and accurate accounting of all transactions regarding BSHD. The following are financial reports required as part of their lessee responsibilities: 1. Quarterly Reporting DMC will furnish BSDC and the City of Memphis quarterly reports no later than the 15 th day of each following quarter, showing the amount of Gross Rental from BSHD during the preceding quarter. 21

23 2. Annual Reports DMC will furnish to BSDC and the City of Memphis within 120 days after the calendar year a completed financial statement showing in reasonable detail the amount of Gross Rental Income from BSHD during the previous year. Financial statements are to include any amount in escrow for 5% capital reserve. Budget DMC will prepare and furnish to BSDC and the City of Memphis a budget of its projected annual costs of operating BSHD on or before April 1, Such budget will consist of all revenues and expenditures attributed to the management and operation of BSHD. The 2014 budget, which is found in Appendix A, represents the total revenues and expenditures for the operation of BSHD for the fiscal year beginning January 1, 2014 and ending December 31, It is based on revenue and expenditure figures provided by the previous manager of BSHD as well as other due diligence completed by DMC to date. Revenues are primarily made up of base rents ($662,000), percentage rents ($640,000), CAM billings ($539,906), Signs ($15,756) and Vendor Permits ($20,000). There is a reduction of $72,000 in legal fee credits, which are explained in Section III.B. The primary expenditure categories are Total Personnel ($576,685), Insurance ($279,543), Street Expense ($154,223), Professional Fees ($326,004 including City s $117,531 for Leasing Commissions as described in Sec.III.D.3.a), and Capital Maintenance ($147,125). The remaining expenditure categories are described as follows: 1. Salaries and Wages Ops The salaries and wages paid to the BSM employees of DMC responsible for the direct management and operation of BSHD. 2. Salaries and Wages CAM The salaries paid to the BSM employees of DMC responsible for the Common Area Maintenance activities of BSHD. 3. Benefits Ops These are funds paid for the benefits of the BSM employees responsible for the direct management and operation of BSHD. These benefits include: deferred, Medicare, social security, pension, health insurance, and life insurance. 22

24 4. Benefits CAM These funds are paid for the benefits of the BSM employees responsible for the Common Area Maintenance of BSHD. These benefits include: Medicare, social security, pension, health insurance, and life insurance. 5. Security This account is for the payment of a private security firm to aid in the safety of the patrons to the leased property. This is the cost of the Weekend ID checks and street patrols used during the period of high activities in and around the leased property. 6. Outside Labor Temporary or seasonal labor associated with CAM activities within the BSHD. 7. Insurance: Property and Liability Payment for all insurance as required under the 1982 Sub-lease and general business insurance to cover the leased area including the Buildings and equipment. The Beale Street Development Corporation and the City of Memphis are named as additional insured. 8. License & Permits Cost of licenses and permits as required by Local, State and Federal governments. 9. Material & Supplies Cost of items used in the maintenance of the leased area. 10. Office Supplies Cost of supplies used in the general business activity of any office. 11. Maintenance and Repairs The cost of maintenance and repairs to assets, including HVAC, that do not extend the useful life of asset. The account also includes grounds maintenance. 12. Pest Control Cost of service for rodent, termites and general insect control in the BSHD common area. 13. Postage Cost of U S postage and expressiovernight service. 14. Equipment Rental Rental of seasonally used equipment and speaker system where it is more cost effective to rent than to purchase 15. Elevator Maintenance Contract service for the elevator located at 203 Beale. 23

25 16. Telephone The cost of management s office telephone and other forms of communications including internet, and telephone as required by code for elevator and fire monitoring system 17. Utilities Monthly electrical, gas and water billing relating to Common Areas, and multi-tenant locations and to un-leased space. A portion of this cost is off-set by charges to tenants in multi-tenant locations. The amount is reported net of the off-set. 18. Waste Removal The contracted service for the removal of trash generated by the activities in the BSHD. This includes the twice weekly street can pick up and the two 30 yard trash compactors. A portion of this cost is offset by charges to tenants in multi-tenant locations. 19. Professional Fees The cost of professional services including accounting and legal. It includes architectural, consultant, and engineering 20. Bank Fees Monthly bank service fees and any other fees associated with maintaining a bank account. 21. DMC Reimbursement Reimbursements to DMC for costs incurred on Beale Street activities (see Sec. III. A.) 22. Lessee Sec. 4.1 Commissions DMC will account for a 10.5% fee of Gross Rental Income that is due the City of Memphis as Lessee successor per lease agreement 23. Leasing Commissions This account represents the 5% leasing commissions that will be paid to Elkington Real Estate Group per settlement agreement. 24. Advertising Costs associated with the advertising and general marketing of the leased property on a national and international level. 25. Event Production Promotional activities held on BSHD and events held to market BSHD. 26. Tenant Rent Credit Specific lease provisions which allow permanent improvements or other standard building components made by and financed by the tenant and which remains with the property as a permanent improvement should the tenant vacate the premises for any reason. 24

26 27. Capital Maintenance Cost of repairs and improvements to the assets of BSHD that extends the useful life of the asset. See Appendix A for Operating Budget Auditing DMC will furnish to BSDC and the City of Memphis within 120 days after the calendar year a complete financial statement showing in reasonable detail the amount of Gross Rental Income from BSHD during the previous year. 25

27 Marketing and Events Marketing Multiple parties including the DMC/BSM and the Beale Street Merchants Association (BSMA) share marketing for BSHD. BSMA is the lead in securing event sponsorships for many of the large-scale happenings on the street and the promotion associated with them. Budgets for event and street marketing are limited by the sponsorships garnered by the BSMA and the DMC/BSM. Where available DMC will provide support via website management, collateral development and press promotion. Media Relations All media relations should be coordinated through Jon Shivers, Events Director and approved by Leslie Gower, VP of Marketing and Events. Contacts for interviews should be vetted through the DMC staff and agreed upon prior to any communication with the press. Photography/Video Location Release Photography by tourists and news organizations is welcome however all other requests must be reviewed by the DMC/BSM team including those from companies and organizations who wish to shoot still or video footage for films, TV segments, B-Roll, commercials or music videos. Those wishing to collect footage of BSHD will be required to complete and sign a Location Release Form. The City of Memphis requires a film permit and proof of insurance from the Film Commission, and since Beale Street Management (BSM) is now acting on behalf of the City of Memphis, BSM will not require production companies to sign a separate permit. To be consistent with the city, BSM will not require a fee to film on Beale, either. Jon Shivers will remain the contact to approve what is allowed to be filmed on Beale Street, making sure that whatever is being filmed is consistent with the brand of BSHD. The Film Commission will notify any Beale Street business directly about filming in their business. If, for some reason, production is prohibiting tourists and guests from accessing BSHD and its businesses for an extended amount of time, on rare occasions we may have to issue a Beale Street closure permit. Cost for that permit is $200/hour. This will be an exception, not the norm, and BSM will be notified in advance of that decision. 26

28 The DMC reserves the right to refuse any application that potentially will reflect BSHD in a negative light. Website and Social Media The DMC will maintain the website All content will be managed by the DMC and fed by the BSM staff. DMC will have final oversight on all social media content. DMC, BSM and an appointed BSMA representative will have access to all social media accounts including Facebook, Twitter and Flickr. Events DMC/BSM, the Beale Street Merchant s Association (BSMA) or public organizations/parties are the primary drivers of events in and on the BSHD. Whether in a lead or supporting role DMC should be involved and informed of all activities on the street. BSHD plays host to over 25 annual events. These events include public concerts, parades, car/motorcycle shows, community events such as 5K s and organized events like the International Blues Festival. See Appendix B Special Events Listing Brass Note Walk of Fame The Beale Street Brass Note Walk of Fame was created in 1986 as a means of connecting the musical history of the street with the present day entertainment district. Varying degrees of formality have been used over the years to manage this process, currently it is managed in partnership with the BSM staff and a volunteer coordinator Ken Hall and the Brass Notes Committee. Placement of the note is based on BSM approval. Notes are ordered and require special sidewalk placement. Jon Shivers will act as the primary contact for this process. 27

29 Weekend and Special Event Vending To improve and enhance the Beale Street experience BSM selects vendors for Handy Park and on Beale Street that offer quality merchandise, maintain excellent and professional displays, are courteous and friendly to visitors, act as ambassadors for Beale Street retail and restaurant establishments, and offer merchandise that does not compete with existing merchandise in Beale Street establishments. Selected vendors will ideally offer unique and handcrafted items that reflect the spirit and artistic integrity of the region. Beale Street Management reserves the right to refuse vendor requests for any reason. Vending will be closely regulated to ensure no direct competition with Beale Street Merchants. All vendors must have a valid Memphis and Shelby County business license and/or other appropriate permits and licenses from local agencies necessary to conduct vending prior to receiving a vendor permit from Beale Street Management. See Appendix C for Vending Rules and Regulations Special Performers Street performers will not be allowed on BSHD unless directly approved by DMC/BSM. All performers, such as but not limited to flippers must follow strict guidelines outlined by the DMC and have signed liability waivers and hold harmless agreement on file at the BSM offices. Age restrictions will apply to any approved performer. Beale Street Management staff reserves the right to inform the approved performers that they cannot perform when the Beale Street Management staff deems fit, i.e., car shows, bike night and extremely busy nights. See Appendix D for Special Performer Forms 28

30 Appendices (A-D) Budgets Events Listing Vending Rules and Regulations Special Performance Waiver 29

31 Appendix A 2014 Operating Budget Actuals from 2013 &

32 Beale Street Historic District 2014 Budget Category Operations CAM Total Revenue: Base Rents 662, ,000 Percentage Rents 640, ,000 Less: 0 BSMA Legal Fee Credits -72,000-72,000 Net Rents 0 CAM Billings 539, ,906 Unleased CAM -170, ,112 CAM Security 221, ,949 Signs 15,756 15,756 Vendor Permits 20,000 20,000 5% Capital Reserve -67,847-67,847 Total Revenue 1,197, ,743 1,789,652 Expense: Wages and Salaries Ops 167, ,400 Wages and Salaries CAM 117, ,132 Benefits Ops 42,583 42,583 Benefits CAM 40,574 40,574 Other Personnel: Security 192, ,996 Outside labor 16,000 16,000 Total Personnel 209, , ,685 Insurance 279, ,543 Street Expense: License & Permits Materials & Supplies 4,000 4,100 8,100 Office Supplies 2, ,350 Maintenance & Repairs 4,100 4,100 Pest Control 3,000 3,000 Postage Equipment Rental 29,004 29,004 Elevator Maintenance 3,952 3,952 Telephone 11,040 1,580 12,620 Utilities 56,000 3,500 59,500 Waste Removal 31,000 31,000 Fees: Professional Fees 59,000 59,000 Bank Fees DMC Reimbursement 72,000 72,000 Lessee s Sec , ,904 Leasing Commissions 61,500 61,500 Advertising 55,000 55,000 Event Production 112, ,500 Improvements: Tenants Rent Credit 15,300 15,300 Capital Maintenance 147, ,125 Total Expense 968, ,727 1,666,381 Net Revenue Over Expenses 229, , ,271 31

33 Beale Street Historic District 2013 Actual Category Operations CAM Total Revenue: Base Rents 638, ,090 Percentage Rents 788, ,713 Less: 0 BSMA Legal Fee Credits 0 0 Net Rents 0 CAM Billings 307, ,665 Unleased CAM 0 0 CAM Security 130, ,088 Signs 29,304 29,304 Vendor Permits 19,600 19,600 Misc. Revenue 3,221 3,221 Total Revenue 1,478, ,754 1,916,682 Cost of Sales: Section fees 142, ,670 Parking Commissions Section 4.2-5% leasing Comm. 67,938 67,938 CAM Administration Fee 125, ,582 Gross Profit 1,267, ,172 1,579,762 Expense: Wages and Salaries Ops 252, ,007 Wages and Salaries CAM 120, ,286 Payroll Taxes & insurance Ops 42,920 42,920 Payroll Taxes & insurance CAM 27,006 27,006 Workers Comp Ops 5,150 5,150 Workers Comp CAM 2,830 2,830 Other Personnel: 0 Security 140, ,353 Outside labor 8,166 20,144 28,310 Total Personnel 308, , ,863 Insurance 267, ,069 Street Expense: License & Permits Materials & Supplies 10,176 1,663 11,839 Office Supplies 1,609 1,609 Dues & subscriptions Maintenance & Repairs 7,230 10,664 17,894 Pest Control 2,563 2,563 Postage Equipment Rental 0 Elevator Maintenance 5,433 5,433 Telephone 12,856 2,505 15,361 Utilities 20,504 5,433 25,936 Waste Removal 32,823 32,823 Taxes Professional srv. 224, ,613 Professional Fees 1,122 1,122 Interest exp 1,102 1,102 Bank Fees Legal Srvs 72,941 72,941 Advertising 34,656 34,656 Event Production 136, ,393 Improvements: Tenants Rent Credit 21,323 21,323 Capital Maintenance 79,685 79,685 Total Expense 933, ,934 1,572,298 Net Income 334, ,762 7,465 32

34 33

35 Appendix B Special Events Listing 34

36 Special Events Listing Event Name Month Event Type New Years Eve on Beale January Celebration International Blues Challenge January Music Event Mardis Gras Parade February Parade St. Patrick's Day Parade March Parade Royal Irish Armada March Car Show Bad Dog 5k March RACE Africa in April Parade April Parade Beale Street Wine Race April Special Event International Council of Corvettes April Car Show Experience the Power Pentecostal Church Choir May Music Event Zombie Massacre Parade May Parade Reeds Jewelers Diamond Dash June Runners Event Corvettes on Beale September Car Show Pride Parade October Parade Halloween Fright Night on Beale October Celebration Tap N Run 4k October Runners Event Big Wheel Race on Beale November Community Event St. Jude Marathon December Runners Event Christmas Parade December Parade Liberty Bowl Parade & Pep Rally December Parade Wednesday Night Bike Night April-September Motorcycle Show Hot Rods on Beale April-September Car Show Friday/Saturday nights April-September TBD Estimated 60 TV/Movie/Magazine shoots Year Round Special Use 12 Beale Street Brass Note Ceremonies 1/month Music Event *This listing reflects events held in DMC/BSM may add additional BSM managed events as budget and sponsorships allow. 35

37 Appendix C Vending Rules & Regulations 36

38 203 Beale Street, #200 Memphis, TN (901) Contact: Dianne Glasper Handy Park and Beale Street Vending Rules and Regulations To improve and enhance the Beale Street experience for our guests, Beale Street Management selects vendors for Handy Park and on Beale Street that offer quality merchandise, maintain excellent and professional displays, are courteous and friendly to visitors, act as ambassadors for Beale Street retail and restaurant establishments, and offer merchandise that does not compete with existing merchandise in Beale Street establishments. Selected vendors will ideally offer unique and handcrafted items that reflect the spirit and artistic integrity of the region. Beale Street Management reserves the right to refuse vendor requests for any reason. ALL VENDORS MUST REVIEW AND INITIAL THE RULES AND REGULATIONS AND COMPLETE THE APPLICATION. RULES AND REGULATIONS 1. All Beale Street and Handy Park merchandise vendors must have a valid Memphis and Shelby County business license and/or other appropriate permits and licenses from local agencies necessary to conduct said vending prior to receiving a vendor permit from Beale Street Management. 2. All vendors at all times will conduct themselves in a professional and courteous manner towards patrons and other vendors or will be escorted from the premises, possibly having legal action taken against them and being banned from the premises permanently. If there is a problem with another vendor, this matter is to be discussed with Beale Street Management only. 37

39 3. No illegal items such as weapons, controlled substances, drug paraphernalia, or drugs of any kind will be allowed. Beale Street Management has the right to inspect and/or reject any item(s) vendor wishes to sell and all vending display areas. 4. No hawking (i.e., calling out to a passerby) is allowed. 5. Vendors are required to prominently display valid Beale Street and Handy Park vending permits. Any vendor without a permit will be required to pay the full permit fee amount plus $50 fine, and will be required to immediately leave the premises. 6. Vendors are responsible for supplying the necessary equipment for operation of their business. 7. Vendors must breakdown and remove all items brought with them at the end of every night. Any items left in the park after breakdown will become the property of Beale Street Management. 8. Vendors are responsible for maintaining their spaces in a clean and sanitary condition, and are responsible for keeping their immediate areas clean and safe. 9. Trash left behind by vendors will not be tolerated and will result in rejection of any future permits and a $50 fine. Vendors are responsible for any trash or debris generated by the operation of their business and is obligated to see that it is properly disposed of in authorized trash receptacles. 10. The selling of any item(s) not on the original application is forbidden. 11. The selling of merchandise that competes with existing retailers on Beale Street is forbidden. Vendors are allowed to sell licensed novelty/souvenir tee shirts and caps and accessories (i.e. ties, scarves, and sunglasses, etc.) but at no time shall a vendor sell other clothing, e.g. pants, dresses, hats, shirts, skirts, shoes, etc., unless it is handcrafted. 12. No food or drink vending will be permitted on Beale Street or Handy Park unless it is allowed as a part of a special event or sponsorship agreement with Beale Street Management. 13. Sample distribution or product promotion is permitted providing no hawking occurs. All consumable samples must be pre-packaged or have a Shelby County health permit. 14. Merchandise found to be stolen or illegal will be reported and turned over to the appropriate authorities and vendor will be banned from vending on the premises permanently. 15. Vendors must set up in the space assigned by Beale Street Management and shall not impede pedestrian traffic flow. 16. No public address systems, amplifiers, musical instruments, or play back devices are allowed. 38

40 17. No electrical equipment, including heaters, hot plates or other devices that are not on the application, will be allowed. 18. On days of inclement weather each vendor may decide whether or not to operate. No refunds will be made for days on which a vendor does not operate. 19. Vendor agrees to indemnify and hold harmless Beale Street Management, Downtown Memphis Commission, the City of Memphis, Shelby County, the State of Tennessee, officers, board members, directors, employees, and agents (collectively known as Indemnified Parties ) against any claims, damages, or losses which may be made against or incurred by the Indemnified Parties arising out of or connected with the condition of use of this permit. 20. Beale Street Management reserves the right to grant exclusive rights to any vendor in regards to this agreement or in any case, revoke an issued permit if legitimate complaints and/or disturbances arise. Vendor understands that failure to comply with ANY of the agreement or permit terms and conditions may be cause to revoke permit or terminate agreement with no refund of payment. VENDING HOURS: a) Vending is allowed on Beale Street and Handy Park from Wednesday through Sunday. Beale Street Management reserves the right to grant exceptions to vending hours in rare situations. b) Vending is not allowed before 11:30 am Wednesday Friday, and not allowed before 11 am Saturday and Sunday.. c) Breakdown time is no later than 2 am the next morning, unless specified in the monthly calendar. DISPLAY REQUIREMENTS: a) Tables must be skirted. [Exceptions to be approved for special events] b) Tents may be used only if they are clean and in good condition and only if proportionate to assigned area. Tents are not to take up space of another area at any time. Tents are by no means to be nailed, screwed, or in any shape, form, or fashion fastened to the ground. c) Tents and tables are not to be left set up on the street or park. Tents, tables, and any other equipment left the next day will become the property of Beale Street Management. 39

41 PERMITTING FEES AND SCHEDULES: a) All fees must be paid to Beale Street Management before a permit will be issued. b) The daily permit fee is $50 per day. The weekly permit fee is $250 and is valid Wednesday through Sunday. c) Weekly permits must be renewed each week. Please check the calendar for upcoming special events and plan accordingly. d) Vending space will be allotted on a first come, first served basis. No more than four vendors will be allowed to vend in Handy Park at any given time, with the exception of special events. e) Permit fee may be paid by check or in cash. Checks should be made payable to Beale Street Management. f) It is the vendor s responsibility to take the following into consideration before payment is made: i. Beale Street Management will not provide refunds due to inclement weather. ii. Beale Street Management will not provide refunds or discounts due to vendor s lack of sales profit. I have read, understand and agree to the above rules and agreement Vendor s Initials 40

42 Handy Park and Beale Street Vending Permit Application This application must be filled out completely and all requested information attached. All information will be verified before application is approved and a permit is issued. Failure to keep contact information updated and correct with Beale Street Management is cause to revoke permit and/or terminate agreement. [Please print all information] Name of Business: Contact Name/Vendor: Street Address: State: Zip Code: Telephone #: Cell/Alternate # Fax #: Address: Website, if applicable: Business License #: State: Drivers License #: State: List all equipment to be used in vending area (tables, tenting, lighting, etc): Merchandise to be sold [be specific]. Please attach photos if possible. 41