| Hannes Breustedt |
New York (dpa) – Elvis Presley may have died in 1977, but his absence has never stopped hundreds of thousands of his fans from visiting Graceland, his home in Memphis, Tennessee each year.
Now a museum, Graceland is a major tourism attraction for the city on the bluffs overlooking the Mississippi River. But, after all these years, it is showing its age and could stand a bit of renovation work.
With the support of city authorities, Graceland’s operators are tapping the capital market and are planning to issue bonds to raise money to give Graceland a thorough facelift. At the same time, they want to greatly expand the overall Elvis tourism infrastructure.
“We want to solidify the Elvis brand, give it a new sheen and polish,” said Reid Dulberger, president and chief executive of the Memphis city economic development company EDGE (Economic Development Growth Engine), explaining plans for the bond issue to the Bloomberg news agency and Memphis’ newspaper, The Commercial Appeal.
He noted that there had been “no significant investment in Graceland for many, many years” and, without improvements, “we wouldn’t continue to see the kind of return visits that we see year after year from the faithful.”
In early January, visits to the home of the King of Rock and Roll surged as thousands of fans joined the Presley family in marking what would have been Elvis’ 80th birthday.
The city as well as the Graceland operators hope that Elvis will continue to be a drawing card for many years to come, as fans converge to see his home while also purchasing a broad range of souvenirs, ranging from branded guitars to copies of Elvis’ signature jumpsuits.
All told, the bond issue with a 30-year maturity is to raise 125 million dollars, which will be used to boost the tourism infrastructure. Plans include a 450-room hotel with conference rooms and a concert hall, as well as two restaurants, a theatre, showrooms and exhibition space.
Graceland itself, which Elvis Presley purchased in 1957 and was his home until his untimely death at the age of 42 in 1977, belongs to his daughter, Lisa Marie.
The company that manages the marketing rights and licences to the Elvis name is called Elvis Presley Enterprises. Lisa Marie Presley owns a 15-per-cent stake. The remaining 85 per cent belongs to the marketing firm Authentic Brands Group ABG, which has the licensing rights to, among others, boxing legend Muhammed Ali and late film star Marilyn Monroe.
Elvis Presley Enterprises partnered with the city administration in the bond deal and was awarded tax and other incentives for its investment. Financial consultants Younger & Associates predicts that the project will be a commercial success for the greater Memphis area.
“The city and the county will benefit greatly, because the project will help one of the main drivers of the tourism industry to grow,” noted the company in a document seen by dpa. The city could expect to see 500 new jobs and additional tax revenues of 50 million dollars.
Through its business development company EDGE, Memphis is the issuer of the bond issue and will use tax revenues to meet the interest payments. But city councilman Jim Strickland also made it clear that the public sector would not shoulder the costs if Elvis Presley Enterprises failed. Market analysts say that as a result the issue is a risk for investors. Private small-time investors won’t be in the bidding. So far, EDGE has not revealed what interest yield the bond issue would provide. Much will depend on future tourism revenues. Each year some 600,000 people visit Graceland, but these are mostly the “boomers” – the generation born right after World War II.
That’s where the gamble comes in. The King of Rock and Roll is becoming less and less known to younger generations. Investments to try to combat this declining interest could be a risky business.