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Mayor seeks $80M of state FedExForum funds and a 0.5% hotel‑tax increase to finance arena overhaul
Summary
Mayor Paul Young asked the City Council Feb. 4 to allocate $80 million of state‑designated FedExForum funds and signaled support for a city hotel‑motel tax increase to help finance a phased, roughly $550 million renovation of the arena.
Mayor Paul Young and FedExForum officials presented Feb. 4 on a proposed multi‑phase overhaul of the arena aimed at modernizing the building, upgrading systems and keeping Memphis competitive for major events.
The city holds $230 million in state‑allocated funds for forum improvements; the administration asked the council to release $80 million of that cash to the Memphis & Shelby County Sports Authority to begin essential capital projects (critical life‑safety and infrastructure work, design and other near‑term capital needs). Mayor Young framed the work as part of a larger $550 million renovation to be performed in phases over seven to ten years.
Officials said the plan also contemplates increasing the city’s portion of the hotel‑motel tax from 3.5% to 4.0% (a 0.5 percentage‑point increase) that would help finance the project as part of the capital stack. Young’s presentation emphasized phasing to reduce the amount borrowed at any single moment and so to limit interest costs and to allow the venue to operate during the sports season.
Councilmembers asked for details on the sports authority’s board composition, MWBE participation, and how arena event costs affect city public safety staffing. Council members also asked the administration about sequencing bond issuances and how changing interest rates could affect the overall cost of renovation. The mayor’s office said the Sports Authority would manage the $80 million as a gated funding line: each specific project would be bid, budgeted and brought to the authority (and council) for approval.
Councilmembers also discussed community benefits, including MWBE participation floors and local hiring expectations for construction work. The mayor said the city expects a baseline of 25% MWBE participation for projects under these funds and pledged community representation in design and contracting discussions.
No final appropriation was made; the administration said it will bring formal ordinance language for the hotel‑tax change and an appropriation request for the $80 million to the council in the near term and noted the need for three readings for a tax ordinance.
