MEMPHIS, Tenn. — State-issued bonds for Graceland, Elvis Presley’s historic home in Memphis, have gone into default.
The bonds were issued by the Economic Development Growth Engine board of Memphis, the City of Memphis and the state of Tennessee to fund a 450-room hotel and other Graceland attractions.
CNN reports $20 million worth of the $104.3 million in bonds issued for Graceland’s expansion in 2017 are now in default.
President and CEO of Memphis Tourism Kevin Kane blames it on the pandemic.
“I will tell you, like so many tourism amenities, it suffered so greatly with mandatory closures, et cetera, during COVID,” he said.
City councilmen Frank Colvett and Martavius Jones told WREG Graceland was not able to make payments on Tourism Development Zone bonds because COVID meant no tourists.
“COVID, obviously, has been brutal to the tourism industry,” Colvett said. “And that reflected in Graceland’s attendance and by extension that’s reflected in their tax revenue.”
“The revenues to pay these bonds solely were to come from the revenues that are generated on that Graceland property or the Graceland campus,” Jones said.
Or, as the EDGE board explained in a statement:
“The Graceland bonds must be repaid from incremental sales and property tax revenues and a tourism surcharge that are all generated at Graceland. The City, the County, and the State have set aside these tax revenues for the repayment of the bonds but the amount of these revenues has been negatively impacted by the decrease in tourism caused by the COVID-19 pandemic.”
However, will taxpayers have to foot the bill?
“The good news is for the Memphis taxpayers is they’re not on the hook for anything,” Jones said. “What’s happening is as tax revenues come up, people get back out and people visit Graceland and the hotel. Then the bonds are paid off.”
EDGE confirmed that neither they, the city, the county, the state nor any taxpayer is liable for the shortfall.
Graceland, the nation’s second most-visited home after the White House, is now preparing for more tourists because of Elvis Week and a new hit movie about the late singer.
“Other than that hiccup called COVID that lasted a lot longer than any of us wanted to, but I’ll tell you Graceland’s back,” Kane said.
Graceland management had no comment on the issue.