Shelby County Commission looks to use hotel-motel tax to fund FedExForum renovations

The Shelby County Commission passed a resolution Monday that would change the hotel-motel tax to allow for funding allocation to the FedExForum. The resolution would be implemented if the Tennessee General Assembly also passes legislation that would allow the county to do so.

The add-on resolution, which was heard at the heal of the over 6-hour-long meeting, amended the tax on hotel and motel occupancies in Shelby County to divide the funds the Convention and Visitors Bureau, also known as Memphis Tourism, receives from the tax.

It also requires Memphis Tourism to add two individuals nominated by the Shelby County Mayor and approved by the commission to the Convention and Visitors Bureau.

The first half of funds would be available immediately, but the second half will only be given once the county "satisfies its commitment to provide funding for an indoor sports facility in which a National Basketball Association franchise is a tenant," according to the resolution.

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The Daily Memphian reported that State Sen. Brent Taylor, a Republican representing Cordova and several Shelby County suburbs, was working on a bill that allow the tax to fund renovations to FedExForum.

The bill was scheduled for a committee hearing Tuesday morning, something Commissioner Edmund Ford Jr. pointed out multiple times during the discussion as to why he would not be voting in support of it.

"It would be premature (for me to) vote up or down on this on this item because I do not have other people (here) that can tell me what the consequences good or bad would be," Ford said.

A bill introduced at the state legislature by State Sen. Raumesh Akbari and State Rep. Antonio Parkinson, both Democrats from Memphis, would direct more revenue from the city and county hotel-motel tax to the Memphis Sports Authority if needed. It's not clear how much money the bill would generate for FedExForum if it ultimately gets amended and goes forward.

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This resolution passed Monday, according to Shelby County Attorney Marlinee Iverson, would only be enacted if the state were to pass the bill that would allow the amendment to the hotel-motel tax.

Memphis Tourism is funded in part by the hotel-motel tax and could be affected by the bill. Memphis Tourism currently receives about 61% of the revenue produced by the tax. This bill and the resolution passed by the commission would divide that into two unequal parts.

Memphis Tourism would receive 35.75% of the revenues produced by the tax until the debt from FedExForum is paid. The second cut of the tax, 25.5%, would then be given to Memphis Tourism.

Currently under the private act, Memphis Tourism receives a 5% increase on the tax yearly until the tax is almost entirely given to Memphis Tourism.

Local and state officials have been trying to come up with money for the FedExForum renovations, which are expected to cost at least $550 million. The Grizzlies have not publicly said how much money the renovations will cost. The arena is also home to the Tigers men's basketball team.

The city of Memphis owns FedExForum, but the county is responsible for funding a share of renovations.

The commissioners needed to pass this legislation in order to ensure that any action the state takes on the revision of the hotel-motel tax, the county would be able to act on those changes as well. Any changes to the hotel-motel tax have to be amended at both the local and state levels.

Iverson said that, to her knowledge, Memphis Tourism does not object to the fact the county has to pay for their share of the renovations to FedExForum. And that they are aware the county is planning to use the hotel-motel tax.

"We've never arrived at a conclusion of what that share should be on either side. But I know that the provisions of this amendment have been shared widely with city CVB," Iverson said.

Jonah Dylan contributed to this report.

Brooke Muckerman covers Shelby County Government for The Commercial Appeal. She can be reached at (901) 484-6225, [email protected] and followed on X, formerly known as Twitter @BrookeMuckerman.

This article originally appeared on Memphis Commercial Appeal: FedExForum renovations: Shelby County looks to use hotel-motel tax funds