The Commercial Appeal Article on Beale Street but not the 17 boxes of hidden Beale Street documents
January 28, 2009
There was an article yesterday morning in the Commercial Appeal concerning how the City of Memphis is getting tough on John Elkington and Performa Entertainment. However I reported on this in 2005 in two website article. In those article I reported that I received a tip that there was boxes of Beale Street documents and reports hidden in a locked storage room at 701 N. Main, the Offices of Housing and Community Development run by Robert Lipscomb. I called the then City Attorney, Sara Hall, and asked her to check and she stated that she could not go down there but sent Elbert Jefferson, the current City Attorney, to check. He did if fact find 17 boxes of Beale Street documents and Wil Gotten, a retired lawyer, and I did eventually get to see them but only after they were sent to Ricky Wilkins for his review.
The City of Memphis has done nothing to enforce their rights since 1992 even though they had all these documents and reports. There was an audit done in 1992 but the results were never allowed to be published. The City of Memphis cannot now claim that they have been in the dark all these years. They have simply failed in their fiscal responsibility and oversight to the taxpayers of the City of Memphis. This failure needs an independent audit and investigation by the City Council. Following are the two website article published in 2005.
MORE INFORMATION ON BEALE STREET SCAM
November 30, 2005
Will Gotten and Joe Saino have been involved in trying to find out why Beale Street Development/Performa Entertainment have not paid one cent to the City of Memphis since 1982. Previously we have published the leases to Beale Street Development Corporation and to Performa Entertainment in this website section in an article dated September 19, 2005. We asked the City of Memphis and Performa to furnish the quarterly and annual financial reports required under the lease agreements. The City of Memphis initially said that they did not have the reports that showed how much the City had been paid but then they revised that answer to say that they in fact had some reports but that there were no reports showing money that had been paid since they have not received any money from Beale Street since 1982.
The story gets more interesting because Joe Saino received information from a source that there were a number of boxes of reports and files that were in a locked closet at the Offices of Housing and Community Development at 701 N. Main. This information was given to the City Attorney and she said that she never knew that the reports were sent to HCD. She sent someone from her office down to HCD and in fact there were seven boxes of documents about Beale Street there in a locked closet.
She sent the boxes to Ricky Wilkins (the attorney representing the City in the Beale Street case) for his review and then she contacted Will Gotten and Joe Saino to allow a review and inspection of the contents of the boxes. She also provided copies of some of the quarterly and annual reports from John Elkington and upon inspection of these reports she admitted that she did not understand the reports and could not determine what monies, if any, were owed by Elkington to the City of Memphis.
The conclusion of all this effort and investigation is the following.
• No one from the City Administration has been doing any oversight on Beale Street and no one knows or seems to care if the reports are accurate.
• The City Administration has abdicated its fiscal responsibility in this matter and has allowed John Elkington to do as he wants.
• The City of Memphis, the State of Tennessee and the Federal Government have spent millions of dollars on Beale Street and no one can show whether the money has been spent wisely or whether it was worth the cost.
• There have been no independent audits or verification of the Beale Street reports.
• Hundreds of thousands of dollars have been spent in useless litigation by the City of Memphis concerning Beale Street Development Corporation and Performa Entertainment.
This is yet another example of the incompetence of the Herenton Administration.
Check below some of the missing annual reports from John Elkington to the City of Memphis.
Click here to see some of the Beale Street Reports sent to the City of Memphis about which they are doing nothing.
Click here to see the Beale Street Budget for 2005 sent to the City of Memphis.
MR. MAYOR AND MR. ELKINGTON, WHERE ARE THOSE REPORTS?
September 19, 2005
Recently an outstanding Memphis citizen sent an open records request to Ms. Sara Hall, the City Attorney, asking for information about Beale Street Development Corporation. His name is Will Gotten and he is a retired lawyer. Here is his request.
From: William Gotten
>To:
>Subject: Beale Street Development Corp.
>Date: Wed, 22 Jun 2005 10:52:28 -0500
>
>Dear Mr. Jefferson: In November, 1982, the City of Memphis entered into a
>lease of Beale Street property to Beale Street Development Corp. (BSDC), a
>non-profit corporation, which then, with the approval and knowledge of the
>City, subleased to Elkington & Keltner and its successor in interest,
>Performa, Inc. The lease and sublease provide that rental payments are to
>be made to the city based on rental income received from the demised
>property during its term.
>
>As a taxpayer and citizen of Memphis, I would like to inspect the municipal
>documents, records, letters and communications, both written and in
>electronic form, that contain information relevant to the following
>subjects:
>
>
>1. The amount of money that the City of Memphis has received each year as
>rent of the demised property directly from BSDC since 1982 to the present
>date.
>
>2. Any written agreements that provide for payment of rent for the demised
>premises to be made directly to the City of Memphis by an entity or person
>other than BSDC.
>
>3. The amount of money that the City of Memphis has received or is receiving
>currently by an entity or person other than BSDC, since the inception of
>such payments to the present date.
>
>4. All annual, semi-annual or quarterly accountings of gross funds received
>and/or expenses deducted, which is determinative of the rent the city has
>received or is currently receiving for the rental of the demised property.
>
>
>Please provide promptly a date, time and place for the inspection of
>documents and personnel for making copies if desired. The reasonable cost
>of such copies will be paid at that time in accordance with City of Memphis
>policy concerning furnishing copies of city documents.
>
>Thanking you for your cooperation, I remain
>
>Sincerely yours,
>
>
>
>William M. Gotten
After almost three months and repeated requests for an answer he finally sent a communication saying that he was filing suit to obtain the information. The next day he got a call and an answer. Here is the answer from Ms. Hall.
VIA E-MAIL AND
U.S. MAIL
September 14, 2005
Mr. William Gotten
6426 Kirby Oaks Drive
Memphis, TN 38119
Re: Open Records Request
Dear Mr. Gotten:
I am writing in response to your August 31, 2005 letter to me and as a follow-up to our telephone conversation this morning. As I stated at the outset of my call, I called you this morning to personally apologize for the amount of time it has taken to answer your open records request. Also, during that telephone conversation, I gave you the answers to the questions you asked in your open records request and stated that I would follow-up with a letter to you, which I am doing now. Your inquiries and the City's preliminary responses are as follows:
1. The amount of money that the City of Memphis has received each year as rent of the demised property directly from BSDC since 1982 to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent from BSDC since 1982 to the present date.
2. Any written agreements that provide for payment of rent for the demised premises to be made directly to the City of Memphis by an entity or person other than BSDC.
Answer: I have checked with the General Services and Finance Divisions and have been advised that there are no written agreements that provide for the payment of rent to be made directly to the City of Memphis by an entity or person other than BSDC -- that is, other than the documents that we have already produced to you which include the lease between the City and BSDC and the sublease between BSDC and Elkington and Keltner Properties. In as much as you indicated that you already had these documents in your possession, I have requested a check in the amount of $8.25 be made payable to you as reimbursement for those copy costs.
3. The amount of money that the City of Memphis has received or is receiving currently by an entity or person other than BSDC, since the inception of such payments to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent or other money related to these agreements or premises from any entity or person other than BSDC.
4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.
Mr. William Gotten
September 14, 2005
Page 2
Again, I apologize for the delay in responding to your request. As you are probably aware, the City has been involved in lengthy litigation with a number of parties over the operation of Beale Street for a number of years. Also, there have been various City officials assigned the responsibility of overseeing activities on Beale Street over the years, many of whom are no longer employed by the City. I appreciate your understanding.
Sincerely,
Sara L. Hall
City Attorney
xc: Keith McGee, Chief Administrative Officer
A little history is necessary here. We have attached below the two leases in question, the lease between the City of Memphis and Beale Street Development Corporation (BSDC) and the lease between Beale Street Development Corporation and Elkington and Keltner Properties, Inc. (lessee) and its successor in interest, Performa, Inc. Both leases are dated November 29th, 1982.
The lease between the City and BSDC is signed by interim Mayor Wallace Madewell who succeeded Mayor Wyatt Chandler when he resigned. In that year the FBI and the IRS investigated BSDC records and BSDC signed a 32 year lease with the City and contracted with Elkington and Keltner Properties to co-develop and manage the properties. (Later Elkington and Keltner renamed Beale Street Management as Performa Entertainment Real Estate Inc.) In 1994 an option was signed to extend the contract to 2034. In March of 1992 Mayor Herenton ordered an investigation of BSDC and Elkington’s Company. In October of 1994 Herenton said that he had no audit to share after the City spent $276,123.00 dollars and 2-1/2 years on audits.
In a Commercial Appeal article dated October 25, 2001 there was the following quote by Elkington.[Elkington said he wrote city officials in May, and again in the months since, about his readiness to transfer funds. "I've been repaid now. I'm happy," Elkington said.
Elkington, chief executive officer of Performa Entertainment Real Estate, the district's management company, said he was finished repaying Performa for money loaned to the district's operation during lean, early years.]
The real point here is shown in item #4 of Sara Hall’s answer to Mr. Gotten.
4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.
In the BSDC/Elkington and Keltner Properties, Inc. lease, Section 5 it says “Lessee shall furnish Lessor and the City quarterly reports in writing, not later than the 15th day of each following quarter, showing the amount of Gross Rental, as hereinafter defined, from the premises during the preceding quarter. Lessee further agrees that it will submit to the Lessor and the City within one hundred and twenty (120) days after the expiration of each full lease year a complete statement certified by Lessee or an independent CPA if the Mayor so requires in writing, showing in reasonable detail the amount of Gross Rental Income from the premises during said period.
Therefore there should be 92 quarterly reports and 23 annual reports. But Ms. Hall says that there are no reports and zero funds received by the City. As a citizen of the City of Memphis and a taxpayer, I demand an investigation of this situation and call on the Mayor, the City Council and the FBI and the IRS (as was done in 1982)to immediately investigate this situation and audit the books and determine how much money is owed to the City from Beale Street. Federal, State and City money has been invested in Beale Street and taxpayers need an explanation.
Click here to see the City of Memphis/Beale Street Development Corporation lease.
Click here to see the Beale Street Development Corporation/Elkington lease.
January 28, 2009
There was an article yesterday morning in the Commercial Appeal concerning how the City of Memphis is getting tough on John Elkington and Performa Entertainment. However I reported on this in 2005 in two website article. In those article I reported that I received a tip that there was boxes of Beale Street documents and reports hidden in a locked storage room at 701 N. Main, the Offices of Housing and Community Development run by Robert Lipscomb. I called the then City Attorney, Sara Hall, and asked her to check and she stated that she could not go down there but sent Elbert Jefferson, the current City Attorney, to check. He did if fact find 17 boxes of Beale Street documents and Wil Gotten, a retired lawyer, and I did eventually get to see them but only after they were sent to Ricky Wilkins for his review.
The City of Memphis has done nothing to enforce their rights since 1992 even though they had all these documents and reports. There was an audit done in 1992 but the results were never allowed to be published. The City of Memphis cannot now claim that they have been in the dark all these years. They have simply failed in their fiscal responsibility and oversight to the taxpayers of the City of Memphis. This failure needs an independent audit and investigation by the City Council. Following are the two website article published in 2005.
MORE INFORMATION ON BEALE STREET SCAM
November 30, 2005
Will Gotten and Joe Saino have been involved in trying to find out why Beale Street Development/Performa Entertainment have not paid one cent to the City of Memphis since 1982. Previously we have published the leases to Beale Street Development Corporation and to Performa Entertainment in this website section in an article dated September 19, 2005. We asked the City of Memphis and Performa to furnish the quarterly and annual financial reports required under the lease agreements. The City of Memphis initially said that they did not have the reports that showed how much the City had been paid but then they revised that answer to say that they in fact had some reports but that there were no reports showing money that had been paid since they have not received any money from Beale Street since 1982.
The story gets more interesting because Joe Saino received information from a source that there were a number of boxes of reports and files that were in a locked closet at the Offices of Housing and Community Development at 701 N. Main. This information was given to the City Attorney and she said that she never knew that the reports were sent to HCD. She sent someone from her office down to HCD and in fact there were seven boxes of documents about Beale Street there in a locked closet.
She sent the boxes to Ricky Wilkins (the attorney representing the City in the Beale Street case) for his review and then she contacted Will Gotten and Joe Saino to allow a review and inspection of the contents of the boxes. She also provided copies of some of the quarterly and annual reports from John Elkington and upon inspection of these reports she admitted that she did not understand the reports and could not determine what monies, if any, were owed by Elkington to the City of Memphis.
The conclusion of all this effort and investigation is the following.
• No one from the City Administration has been doing any oversight on Beale Street and no one knows or seems to care if the reports are accurate.
• The City Administration has abdicated its fiscal responsibility in this matter and has allowed John Elkington to do as he wants.
• The City of Memphis, the State of Tennessee and the Federal Government have spent millions of dollars on Beale Street and no one can show whether the money has been spent wisely or whether it was worth the cost.
• There have been no independent audits or verification of the Beale Street reports.
• Hundreds of thousands of dollars have been spent in useless litigation by the City of Memphis concerning Beale Street Development Corporation and Performa Entertainment.
This is yet another example of the incompetence of the Herenton Administration.
Check below some of the missing annual reports from John Elkington to the City of Memphis.
Click here to see some of the Beale Street Reports sent to the City of Memphis about which they are doing nothing.
Click here to see the Beale Street Budget for 2005 sent to the City of Memphis.
MR. MAYOR AND MR. ELKINGTON, WHERE ARE THOSE REPORTS?
September 19, 2005
Recently an outstanding Memphis citizen sent an open records request to Ms. Sara Hall, the City Attorney, asking for information about Beale Street Development Corporation. His name is Will Gotten and he is a retired lawyer. Here is his request.
From: William Gotten
>To:
>Subject: Beale Street Development Corp.
>Date: Wed, 22 Jun 2005 10:52:28 -0500
>
>Dear Mr. Jefferson: In November, 1982, the City of Memphis entered into a
>lease of Beale Street property to Beale Street Development Corp. (BSDC), a
>non-profit corporation, which then, with the approval and knowledge of the
>City, subleased to Elkington & Keltner and its successor in interest,
>Performa, Inc. The lease and sublease provide that rental payments are to
>be made to the city based on rental income received from the demised
>property during its term.
>
>As a taxpayer and citizen of Memphis, I would like to inspect the municipal
>documents, records, letters and communications, both written and in
>electronic form, that contain information relevant to the following
>subjects:
>
>
>1. The amount of money that the City of Memphis has received each year as
>rent of the demised property directly from BSDC since 1982 to the present
>date.
>
>2. Any written agreements that provide for payment of rent for the demised
>premises to be made directly to the City of Memphis by an entity or person
>other than BSDC.
>
>3. The amount of money that the City of Memphis has received or is receiving
>currently by an entity or person other than BSDC, since the inception of
>such payments to the present date.
>
>4. All annual, semi-annual or quarterly accountings of gross funds received
>and/or expenses deducted, which is determinative of the rent the city has
>received or is currently receiving for the rental of the demised property.
>
>
>Please provide promptly a date, time and place for the inspection of
>documents and personnel for making copies if desired. The reasonable cost
>of such copies will be paid at that time in accordance with City of Memphis
>policy concerning furnishing copies of city documents.
>
>Thanking you for your cooperation, I remain
>
>Sincerely yours,
>
>
>
>William M. Gotten
After almost three months and repeated requests for an answer he finally sent a communication saying that he was filing suit to obtain the information. The next day he got a call and an answer. Here is the answer from Ms. Hall.
VIA E-MAIL AND
U.S. MAIL
September 14, 2005
Mr. William Gotten
6426 Kirby Oaks Drive
Memphis, TN 38119
Re: Open Records Request
Dear Mr. Gotten:
I am writing in response to your August 31, 2005 letter to me and as a follow-up to our telephone conversation this morning. As I stated at the outset of my call, I called you this morning to personally apologize for the amount of time it has taken to answer your open records request. Also, during that telephone conversation, I gave you the answers to the questions you asked in your open records request and stated that I would follow-up with a letter to you, which I am doing now. Your inquiries and the City's preliminary responses are as follows:
1. The amount of money that the City of Memphis has received each year as rent of the demised property directly from BSDC since 1982 to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent from BSDC since 1982 to the present date.
2. Any written agreements that provide for payment of rent for the demised premises to be made directly to the City of Memphis by an entity or person other than BSDC.
Answer: I have checked with the General Services and Finance Divisions and have been advised that there are no written agreements that provide for the payment of rent to be made directly to the City of Memphis by an entity or person other than BSDC -- that is, other than the documents that we have already produced to you which include the lease between the City and BSDC and the sublease between BSDC and Elkington and Keltner Properties. In as much as you indicated that you already had these documents in your possession, I have requested a check in the amount of $8.25 be made payable to you as reimbursement for those copy costs.
3. The amount of money that the City of Memphis has received or is receiving currently by an entity or person other than BSDC, since the inception of such payments to the present date.
Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent or other money related to these agreements or premises from any entity or person other than BSDC.
4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.
Mr. William Gotten
September 14, 2005
Page 2
Again, I apologize for the delay in responding to your request. As you are probably aware, the City has been involved in lengthy litigation with a number of parties over the operation of Beale Street for a number of years. Also, there have been various City officials assigned the responsibility of overseeing activities on Beale Street over the years, many of whom are no longer employed by the City. I appreciate your understanding.
Sincerely,
Sara L. Hall
City Attorney
xc: Keith McGee, Chief Administrative Officer
A little history is necessary here. We have attached below the two leases in question, the lease between the City of Memphis and Beale Street Development Corporation (BSDC) and the lease between Beale Street Development Corporation and Elkington and Keltner Properties, Inc. (lessee) and its successor in interest, Performa, Inc. Both leases are dated November 29th, 1982.
The lease between the City and BSDC is signed by interim Mayor Wallace Madewell who succeeded Mayor Wyatt Chandler when he resigned. In that year the FBI and the IRS investigated BSDC records and BSDC signed a 32 year lease with the City and contracted with Elkington and Keltner Properties to co-develop and manage the properties. (Later Elkington and Keltner renamed Beale Street Management as Performa Entertainment Real Estate Inc.) In 1994 an option was signed to extend the contract to 2034. In March of 1992 Mayor Herenton ordered an investigation of BSDC and Elkington’s Company. In October of 1994 Herenton said that he had no audit to share after the City spent $276,123.00 dollars and 2-1/2 years on audits.
In a Commercial Appeal article dated October 25, 2001 there was the following quote by Elkington.[Elkington said he wrote city officials in May, and again in the months since, about his readiness to transfer funds. "I've been repaid now. I'm happy," Elkington said.
Elkington, chief executive officer of Performa Entertainment Real Estate, the district's management company, said he was finished repaying Performa for money loaned to the district's operation during lean, early years.]
The real point here is shown in item #4 of Sara Hall’s answer to Mr. Gotten.
4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property.
Answer: Since the City has not received any funds, there are no accountings of funds received.
In the BSDC/Elkington and Keltner Properties, Inc. lease, Section 5 it says “Lessee shall furnish Lessor and the City quarterly reports in writing, not later than the 15th day of each following quarter, showing the amount of Gross Rental, as hereinafter defined, from the premises during the preceding quarter. Lessee further agrees that it will submit to the Lessor and the City within one hundred and twenty (120) days after the expiration of each full lease year a complete statement certified by Lessee or an independent CPA if the Mayor so requires in writing, showing in reasonable detail the amount of Gross Rental Income from the premises during said period.
Therefore there should be 92 quarterly reports and 23 annual reports. But Ms. Hall says that there are no reports and zero funds received by the City. As a citizen of the City of Memphis and a taxpayer, I demand an investigation of this situation and call on the Mayor, the City Council and the FBI and the IRS (as was done in 1982)to immediately investigate this situation and audit the books and determine how much money is owed to the City from Beale Street. Federal, State and City money has been invested in Beale Street and taxpayers need an explanation.
Click here to see the City of Memphis/Beale Street Development Corporation lease.
Click here to see the Beale Street Development Corporation/Elkington lease.
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