Editor’s note: This story has been corrected to more accurately describe a bill previously passed by the state legislature.
FedExForum will soon receive $80 million from the City of Memphis to begin renovations.
The money transfer was passed by the Memphis City Council Tuesday evening in a unanimous vote. It will now be in the hands of the Memphis Sports Authority to spend on minor fixes to the arena.
Memphis Mayor Paul Young previously said the initial funds would go toward deferred maintenance at the arena. Some, he added, would be used to start design work for the renovations as a whole, which are expected to cost $550 million.
City councilmembers also affirmed the 0.5% increase to the city’s hotel-motel tax, another funding avenue, during a vote on the consent agenda. Unlike the resolution to transfer the $80 million, the tax increase is an ordinance that requires three separate votes to pass.
The tax increase, should it pass after two more votes, would set the city’s hotel-motel tax rate at 4%, the maximum allowed by the state.
Both the funding transfer and tax increase were introduced by Young during a Feb. 4 committee meeting. In that meeting, he said that renovations would now happen in phases which could take years to complete.
“When we started this process, we initially thought that it would be one big bond issuance to combine with the case that we have when we have a big $550 million project,” Young said during the Feb. 4 meeting. “What we realized would be more prudent in order for us to reduce interest costs was to break it into phases.”
In addition to lowering costs, Young said dividing the renovations should allow the arena to be used during the season. It would also allow the FedExForum to keep up with the NBA’s changing arena standards.
The road to renovating the FedExForum
Funding renovations for the FedExForum has been a yearslong undertaking by officials. The state set aside $350 million to the city in 2023 for various stadium funding projects.
Conversations about how to spend that money stalled until FedEx founder Fred Smith and his family agreed to donate $50 million to fund renovations at the Simmons Bank Liberty Stadium, where the University of Memphis football team plays its home games.
The city allocated $120 million to that project, leaving $230 million for FedExForum renovations.
Soccer team Memphis 901 FC had initially hoped for some of that money to build a new stadium, but the city declined to fund that project and it ultimately led to the demise of 901 FC, which folded last year. The Memphis Redbirds, the Triple-A affiliate of the St. Louis Cardinals, have said they need money to renovate AutoZone Park as well.
Another part of the $550 million figure floated to update the FedExForum could come from a change to how Shelby County’s hotel-motel tax can be spent. The state legislature passed a bill last year that allows the county to use the money for the renovations.
The Grizzlies have not publicly said how much money they need or what their exact plans are for FedExForum renovations.
Lucas Finton covers crime, policing, jails, the courts and criminal justice policy for The Commercial Appeal. He can be reached by phone or email: (901)208-3922 and [email protected], and followed on X @LucasFinton.
