Merchants Association Alleges City Is Trying to Undo Its Lease Agreements

The city of Memphis, working with Cordish Companies, Guggenheim Partners, and an accounting firm, are engaged in an ongoing effort to force Beale Street merchants to renegotiate valid and binding commercial lease agreements, according to a lawsuit filed by the Beale Street Merchants Association. In the lawsuit, the merchants association is also alleging that the defendants are using ongoing litigation on another matter to gain access to their confidential business documents.

The Beale Street Merchants Association includes more than two dozen entertainment, dining and retail establishments. Cordish, which is headquartered in Baltimore, is a real estate development company, and Guggenheim Partners is a diversified financial services firm with offices throughout the world.

Among the documents filed in Shelby County, Tenn., were a series of emails between the city, Cordish, Guggengheim, and others that provides a narrative record of this effort. According to the filing, the city’s “supposed ‘audit’” was “for the purposes of evaluating the city’s attempted renegotiation of commercial lease agreements, which are non-negotiable under the circumstances presently existing.”

Specific emails exchanged sought information, including: property manifest (who owns what property), terms of existing lease agreements, profit and loss statements, rent roll from existing tenants, and any other information that could be gotten from the city of Memphis. In a July 2008 email, Robert Lipscomb, who is director of Housing and Community Development and point person on Beale Street issues, described the “need to determine if current leases for certain businesses can be negotiated as they are not good for the city.”