Department of Bad Lease Deals, Tennessee Division: When the city of Memphis agreed to build the $250 million FedEx Forum to lure the Grizzlies from Vancouver, one of the lease enticements was a “non-compete clause” with the Pyramid, built by Memphis in 1991. While the city scrambles to find concerts and other events to fill the Pyramid, this clause guarantees the Grizzlies the right to veto any events there – a right, explains the Memphis Commercial Appeal in an editorial, “the organization possesses whether there is an event the same night at the Forum or not.” The editorial says it hopes the Grizzlies will use the clause “judiciously,” but admits that there’s nothing stopping the team from doing otherwise, except for the risk of bad publicity.
That Commercial Appeal editorial also contains one of the more comical misunderstandings of municipal economics to come down Google News of late:
All of which creates a strict test of when it would be wise for the Grizzlies to exercise the no-compete clause: when the staging of an event at The Pyramid or the Coliseum would divert entertainment dollars from the Forum.
If that’s the case, exercising the right not only benefits the Grizzlies but the taxpayers as well. Sales taxes and other revenue generated at the FedExForum will help pay off bonds used to finance construction of the $250 million arena.
So let’s get this straight: If the Dixie Chicks play at FedExForum and the state collects sales tax money and uses it to pay off arena bonds, that’s a good thing; if they play at the Pyramid and the state collects sales tax money and uses it to, oh, keep public schools open, that’s a bad thing?