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- Memphis Mayor Paul Young on hotels, MATA, budgets, and more, tonight on Behind the Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

I am joined tonight by Paul Young, Memphis Mayor.

Thanks for being here again.

- Thank you for having me.

- Along with Bill Dries, reporter with The Daily Memphian.

We'll talk about a lot today.

I mentioned some at the top, we'll also talk about crime.

We'll talk about whatever else we can get to, but I will start with this past week, and we recorded this Thursday morning.

The city's buying a hotel, which was, I think for people who don't follow this very closely, was very surprising, confusing, and maybe a little frustrating in the sense that MATA, we're shutting down bus lines, there's other challenges, and the city is spending what, $20 to $30 million to buy the Sheraton next to the Convention Center.

Why did that come about, and what's the plan?

- Yeah, so as you know, the Convention Center saw a $200 million upgrade over the past couple of years.

It's been doing pretty well, but one of the biggest challenges that we've had has been the quality of the hotel that is literally attached to it.

The owners pretty much wrote off, not pretty much, but they did write off the property, literally, off their books, and they put it up for sale earlier this year for about $43 million in February.

They had some buyers that were looking to purchase it.

The deal fell through, and their next step was to auction the property off, and in order for us to protect our $200 million investment, it's really, really important to have a clear understanding of what's going to happen with the Sheraton Hotel, and we had the opportunity to acquire it by piggybacking off the previous buyers, the person that was going to buy it, off their contract, and so we stepped into their shoes to acquire that property and move forward with a development plan that will allow us to not only recoup the investment that we're making to purchase it, but also get a little bit extra revenue on the back end, and so it's a good deal for us, and I can go into the depths of how the deal works, but at the end of the day, this was a protection move, a move to protect our city and our economy.

- Do you intend for the city to own and manage it for the long term?

- So we'll contract out management.

Obviously, we know we can't manage a hotel.

We aren't managers of hotels, so we'll have a contracted group that will manage the hotel and operations during the short term.

Our goal is to sell the property to a nonprofit.

This is a structure that has been used in other convention hotel deals and projects in Knoxville, like the dorms around Neyland Stadium, where you establish this nonprofit entity that serves as the ownership.

The nonprofit purchases the property back from the city at fair market value.

That's how we get a little bit extra than what we paid for, and then they redevelop it using the traditional suite of tools that are used to backstop the bonds that they'll issue.

- One more question, I'll go to Bill.

It's $22 million, is that the purchase price?

- So the purchase price is $22 million.

The bond issuance is $8 million to take care of soft costs and A&E.

- Okay, so that's where we get to the thirty.

- Correct.

- Okay, but that's to buy it.

There's a tremendous amount of money, I would assume.

Tens of millions of dollars need to go in.

I mean, last time I was in there a year ago for something, it's in pretty rough shape, and I wasn't in the rooms, I was just in the lobby area.

Where will the money to renovate, upgrade the hotel come from?

- That's what I was talking about.

When the nonprofit purchases the hotel from the city, they are going to be issuing bonds that will be secured by the traditional suite of sales tax, TDZ surcharges, all these different things that will secure the bonds that they issue, and they'll issue in the amount of $150 million or so to do the purchase of the property back from the city and the renovations.

- Bill?

- Mayor, when the Council made the decision and approved, it was a set of three resolutions.

The day at City Hall this past Tuesday started with a lot of questions in committees, and even some Council members voicing their doubts.

But when the vote came that afternoon, there was no discussion.

The Council really voted on it.

And then, between the morning committee session and the afternoon vote, the Council members went over and looked at the hotel.

Did that play a role in- - Yeah, I certainly think it did, because I think when you actually go in and you see the conditions and you understand what that hotel means to our economic development, as we look to recruit conventions like COGIC and other big events that even some of our local companies like AutoZone and St. Jude host, that hotel is deeply important.

And when you see the conditions, it's abundantly clear that we have to do something.

And the reality is that that hotel had to be off the books for the Sheraton Group, the ownership group, by the end of this year, by December 31st.

And it was gonna go up for fire sale, and we cannot afford to have a one-star hotel or see that hotel go dark.

- Does the hotel have bookings currently going out from where it is now?

- Yeah, so the hotel is still operating, and it's expected to continue operating in this interim period as we get all of the deal structure in place to ultimately make the sale to the nonprofit.

- As the head of the Downtown Memphis Commission, you were involved in some negotiations with the current owners.

And that was around not only upgrading the rooms, but starting with an upgrade of the room and building on another tower to get the hotel to something approaching 900 rooms.

It's 600 now, but you've got several hundred of those that are offline.

Are there long-range plans now to see more rooms added on to that?

- I think in the short term, we're thinking about how we ensure that all 600 hotel rooms are back online.

We certainly know that there's a deficit of hotel rooms needed for our convention business.

The estimates show that we need roughly 1,500 to 1,700 rooms in our community to support the convention center at its maximum capacity.

And so we're certainly gonna continue to be looking for other opportunities to support additional hotel rooms in Downtown Memphis.

- The city's biggest annual meeting is the Church of God in Christ Convocation, which moved back here a few years ago after being away in other cities.

Even before you became mayor, what had you heard as a city official, as the head of housing and community development?

What had you heard from COGIC church leaders?

- Well, I'll tell you what I heard as recently as last year, right after I won the election, COGIC came in town and they had some negative experiences at the hotel room.

And earlier this year when the bishop was here and other members of their leadership team from COGIC, they expressed deep concern about the condition of the hotel and concern about extending any long-term agreement with the city unless they know that that hotel has a path for improvement.

- Two quick last hotel questions.

There was talk of another convention center hotel, there was a Loews conversation that fell through, I think you were part of that, either at DMC or at HUD when Strickland was mayor, and then there's been talk about the Grand Hyatt down where the Hyatt Centric and the Carlisle Group has a hotel.

Do you foresee the city supporting other convention center type hotels?

- Yeah, definitely in the future.

I mean, obviously we want the economy to move in a direction where those are possible and feasible.

- Let's shift to crime and a couple things.

One, generally crime stats are trending down, they are nationally, and Memphis is catching up to that.

It's still elevated, it's down from some pretty high levels.

We do have Interim Police Chief C.J.

Davis coming on next week to talk more in depth about a lot of these things.

But one thing that came out in recent, I don't know, in the last few months was, and it's kind of shocking, really, we've talked a lot over the years about the hiring challenges, that's actually a national problem in terms of the number of police.

The City wants somewhere between 2,300 and 2,500 police, it's got about 1,900 and it's been that way for quite some time.

But squad cars, literally squad cars not operating, that police not, I think C.J.

Davis presented to the police chief to Council that many officers couldn't get out and patrol because squad cars are out.

And I think that's a disconnect when people say, all right, we found $20 to $30 million in financing for this hotel, but crime is one of the biggest, if not the biggest issues in the city, and we have squad cars that don't operate.

Even for the reduced number of police officers that we have.

What's your response to that?

- Yeah, I mean, we certainly have been taking a deep focus on our squad cars.

I wanna acknowledge Councilwoman Jerry Green.

I know she's been pushing this a lot, as well as Councilman Ford Canale.

And it's become abundantly clear that we're going to have to do a much better job with maintaining our fleet, with getting squad cars repaired in a timely manner, finding more opportunities to get mechanics on our staff, and even finding external groups that can help us repair our cars.

But it's really just a matter of fleet management.

And we have been taking some deep looks at how we can upgrade the quality of our squad cars, the durability of those cars, and working with our officers to do all that they can to take care of 'em.

- More spending around crime, $3 million, I think, was recently approved by the Council for cameras, with some AI capacity, at what, 550 intersections in the city, connected by fiber.

Talk about the purpose of those cameras and what they enable you and MPD to do in terms of crime prevention.

- Yeah, a deep part of our crime-fighting strategy has to be using technology.

We know, you talked about the number of officers that we have, and as we have been working to get that complement up, we wanna make sure that we are using technology to help offset our efforts.

And we are looking to put 550 high-quality cameras at intersections all throughout this city, and they'll be attached to our fiber network.

So these are 4K cameras that will have the ability to use AI, so if someone commits a crime in a gray Mazda with a dent on the hood and no license plate, once we flag that car, anytime it passes any of those intersections, we're gonna be able to be alerted and apprehend those individuals quicker.

I mean, that's the ultimate goal.

- Two more questions from me.

One thing people get real frustrated about, and we've talked about a lot here, we've talked about a lot in the Daily Memphian, is issues that actually you as mayor and MPD have no control over, which is the way sentencing works, the way bail works, the way people are released on their own recognizance, people very critical sometimes of, hey, this person had a long history of violent crime and they were released, I mean, on a minor bond or no bond.

Where are you in that debate, and again, you don't have authority to change sentencing, but you have relationships with the DA, with others in the criminal justice sort of apparatus.

What's your take on that?

- Well, I mean, I'm similar to other residents in our community, I've certainly seen instances where it seems to me, as the lay citizen, that this person was too much of a threat to be let out on the low bonds that they've received.

I will say that I think we have seen movement in that space, I mean, as I look at some of the sentences that are coming down for bail and things of that nature, they seem to be in line from what I've seen in recent months.

Certainly there's still those instances that come across, but as I look at it across the board, I think the DA has been pushing harder in that perspective, which we greatly appreciate and wanna continue to see.

- Do you, you've known Steve Mulroy forever, I mean, do you talk to DA Mulroy about that, do you put pressure on him, or is it inappropriate for you to do so?

- Oh no, we definitely have conversations and very direct dialogue, we have good relationship, and for me, it's really making sure that I understand how the decisions are being made.

- Two quick questions, then I'll go back to Bill.

One is, C.J.

Davis was not appointed into the permanent position, she is the interim, again, I mentioned, the police director will be on the show next week, do you support C.J.

Davis for long-term?

- Oh yeah, absolutely, absolutely, I definitely support her, and as soon as the Council's ready, we'll be ready to bring her forward.

- Last thing, we're recording this on Thursday morning, we don't have a verdict on the Tyre Nichols trial, there's also an outstanding trial for the family of Tyre Nichols, a lawsuit against the City, there may be state charges, I think, as well, Bill's nodding, but is there any part of what you've seen or read of the trial that you can comment on and your reaction to, I mean, I think for most Memphis, sort of reliving the horror, I mean, it's not editorializing, we all saw the video, it was a horrific murder of a man, you know, on the street.

Any thoughts on that, again, we're Thursday morning, there's no conviction, and there's other outstanding issues, so I know you're maybe somewhat limited.

- Yeah, it was a tragic incident, and a heart certainly goes out to the family, and we look forward to seeing justice served.

- Changes in MPD as a result of that, and since you took over?

- I think that MPD was already working on things internally to strengthen their processes, and we're gonna continue to do that.

- Bill.

- Let's talk about the Memphis Area Transit Authority.

Are you satisfied that the current leadership at MATA is cooperating with the auditor that you've hired, and with the city attorney, in terms of providing information about how they got in this financial mess, and what the way forward is on that?

- I think for me, it's really about figuring out, I mean, certainly we wanna figure out what happened to get us here, but the biggest concern for me is what is the path moving forward, and that is what I spend most of my time talking to Bacarra and her team about.

- The CEO of MATA.

- Sorry, Bacarra Mauldin, the interim CEO, I spend a lot of my time talking to them about what is the path forward, and that's where we're trying to put all of our effort, because even as we figure out what happened to get us here, the question still remains, how are people going to get to and from their daily needs each day?

We have some cuts that have been proposed that are coming up soon, so we're having discussions around those cuts, and how are they going to impact, how many people are actually impacted, how are they going to get to work when those cuts take place, that's how we spend our time in our discussions with the MATA leadership team, because I think that is really the most important thing.

And then lastly, I will say, for me, I wanna figure out what is the sustainable path for MATA.

We know that right now, it's operating at a level that it cannot sustain, we have fixed-route buses, some of which don't have high populations on them, high users, high number of users, and we have to figure out how we right-size the organization, about six or seven of the routes have about 80% of the traffic, and so we wanna get higher frequency on those, and figure out a way to ensure that those are living in less densely populated areas, or less dense users of the system, how do we serve those communities?

And that is what we're spending most of our time talking about.

- The trolley operators are already off of the job, the trolley system's down, the other layoffs, I think, take effect on November 1st, and the tendency, I think, the comment I hear most often is, well, we need to blow up the system, but the last time I looked, 90% of the people who ride those buses don't have any other way to get where they need to go, so you really can't do that.

When November 1st hits, is that really, let's find a way to stitch this together to do the most it can do, or is November 1st kind of where the rubber meets the road, not to mix metaphors or anything, but is that where the rubber meets the road in terms of really changing what the system is now into what it's going to become?

- Well, I wanna make sure that when we make changes, they are sustainable changes that are going to really move us in the direction that creates a system that's gonna have better service for the long term.

And I think what we have planned, I think it's November 3rd, is actually the date.

What's planned for November 3rd is about a month away from now, and so we're gonna be working over the next couple of weeks with MATA to figure out if there's anything we can do to pause, or whether it has to move forward at that point in time.

- A lot of what MATA gets is federal funding.

Have you talked to MATA's federal partners, and where are they at in terms of what they've seen?

- I've had at least two conversations with FTA, which is the Federal Transit Authority, and certainly they're paying attention, and they're watching and monitoring.

And they know about the actions we're taking with the consultants that we're bringing in, and I think they appreciate that, and they wanna watch and see how things go.

- Just a quick follow-up from me, you mentioned wanting to look ahead, and what's the plan in this November 3rd, that's the deadline where big cuts could happen.

But will we, I mean the taxpayers, you, your office, get an accounting, a public accounting, both financial and a kind of narrative of what went wrong?

- Yeah, we definitely will, we will.

So I wanted to start the financial audit sooner, but we had some contracting issues.

So TransPro, which is doing more of the operational consulting, has been in for the last couple weeks.

- And is that a forensic auditor, or is it a different type of auditor?

People talk about- - I don't wanna use the wrong word, I think I said forensic the first time, that may not be the appropriate term.

- This is the auditor, this is the person who's digging in and is gonna- - TransPro is doing operational consulting.

The audit was intended to be done by PricewaterhouseCoopers.

- Let's go to the referendum on guns that's on the ballot for November 5th, and early voting starts here pretty soon.

I think we were talking before the show that mail-in ballots actually gone out to military, and that referendum was very controversial.

The referendum, it was put forward by the City Council and put on the ballot by City Council, requires handgun carry permit in the city, banning possession of assault rifle without a handgun permit, and then only on your own property or a shooting range, and allows the seizure of guns under extreme risk protection, or sometimes called red flag laws.

J.B. Smiley, the Council chair who really pushed this, was on the show I think two weeks ago, people can go back to wkno.org and watch that.

But he advocated for that, look, this won't go into effect, we can't overturn state law, but it sits there waiting if there ever is a change at state law or federal law, these things can then go into effect.

You really didn't want it to go forward.

I think you said, you're for more gun restrictions, but it has turned into a big fight with the state.

Cameron Sexton, Speaker of the House coming forward, first saying the state might hold back sales tax revenue, I think that's been pretty determined that that can't happen, but the state has huge purse strings.

There are big asks going to the state around Grizzlies, around other economic development issues, businesses.

Do you think this is going to really hurt some of the initiatives you and others wanna put forward where we need state help?

- Yeah, I'm not sure.

I mean, we're gonna see, it's going to move forward, and I'm not sure what impact it will have.

I made my statement about it, and it's moving forward, so we'll just hope for the best.

In principle, I certainly agree and align with Council.

We need less guns in our community.

They are ripping our community apart, and we need to find a path towards sensible gun laws in our community.

The reservation, for me, is just at what cost for this specific referendum, and we'll see how it all plays out.

- I mentioned in that the Grizzlies and the FedExForum deal.

The deal was approved with, I think, city money and a lot of state money, $550 million, but the lease extension has not been signed.

We've written about it.

It's out there.

The Grizzlies have asked for more of what, $100 million investment, not just in the forum.

We're not talking about new facilities and new jumbotrons.

We're also talking about a real remaking of downtown, more cameras around crime, addressing crime, addressing blight.

Do you support that initiative to put more money into downtown as part of the whole Grizzlies stadium deal, and where will that money come from?

- Yeah, so where it comes from is still to be determined.

I think we're certainly gonna keep having discussions around how to fund all of the things that are needed.

Public safety in downtown is really important.

We know that downtown is really the living room and billboard, not just for the city of Memphis, but our whole region.

As downtown goes, the Mid-South goes.

We wanna make sure that we are creating a safe space around it, and it's not surprising that it's something that the Grizzlies would wanna see happening around the FedExForum.

- Are we at risk of losing the Grizzlies?

- I mean, until we sign the deal, we're always at risk.

We wanna do everything we can to move that deal forward and get the safety that we all deserve within downtown Memphis.

- Bill.

- In the past week, you were at the White House with the President as he signed an executive order on gun switches.

Those are devices that people can buy and put on semi-automatic guns and make them fire like automatic weapons, like machine guns, in effect.

Talk about that a little bit.

It's a big deal going to the White House, and on this particular issue, I believe the administration wanted you there.

You were there for another reason.

- Yeah, yeah, so I was there, headed there to meet with Everytown, which does a lot of work around gun safety, and they had mayors from across the country convening, and it just so happened that the White House was hosting this event, and they wanted us to come over, and it was great to be there for such a pertinent discussion.

I talked to Chief Davis about how prevalent switches are in our community, and she says that while she didn't have data and numbers in front of her, she said that at least every week, we have some incident where we find somebody that has a switch or someone has used a switch in some encounter, and so we know that it's a timely issue, and it was great to be there at the White House to see the President and Vice President there addressing this issue, as well as Mayor Woodfin from Birmingham, who just recently experienced a mass shooting in which switches were used.

- Would this be something that the police in making a case would turn over to federal prosecutors for action?

Is that how- - Absolutely, and we already have a good relationship with our federal partners, and so it just gives our federal partners more tools to use when we encounter those incidents.

- Is there more coming from the feds?

- We sure hope so, I mean, we're continuing to have conversations with the White House Office of Gun Violence Prevention, and we're talking to them around different pots of money that we can tap into as a community, because we know that those federal resources are needed right here in Memphis.

- Briefly, with 30, 40 seconds left here, xAI has announced that they're gonna be part of building this Greywater facility, which takes sewage water, turns it into water that's usable in their big supercomputer data center.

It'll also be used, I think, at the power plant, if I have that right, that's the idea.

Also, Nucor Steel, does the city have a role in that, supportive of that?

- Well, we're deeply supportive.

It's something that we've wanted for a while, knowing that we have TVA that has needed one for a while.

It's gonna be able to be used by our wastewater treatment facility, and so it's gonna be a great thing for our community, and so we're glad to see it moving forward.

- All right, that's all the time we have.

Thank you very much, thanks for being here.

We'll see you here soon, thank you, Bill.

I will say, we recently talked to Doug McGowen and folks from Protect Our Aquifer about issues around the Greywater facility, other MLGW things, you can get that at wkno.org.

Also had a great conversation with Marie Feagins, the superintendent of Memphis-Shelby County Schools.

All that's at wkno.org, or you can get video of the show on YouTube, the Daily Memphian site, or download the show as a podcast wherever you get your podcasts.

Thank you very much, we'll see you next week.

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