Texas-based Cinergy Entertainment, a theater and recreation brand, announced in December it was scouting locations for expansion outside of its current footprint in Texas and Oklahoma.

Memphis, and the Mid-South Fairgrounds, could be one of those expansion locations.

Just a few weeks after Cinergy announced its expansion plans, three City of Memphis officials journeyed south to meet with Cinergy and discuss a potential venue at the Mid-South Fairgrounds.

They returned with no deal inked, but conversations remain ongoing between Memphis and Cinergy as well as other, similar firms, Housing and Community Development Director Paul Young said Thursday in an interview with The Commercial Appeal.

"They are a destination entertainment venue that would bring a new amenity to the city and we've had some discussions with them on the fairgrounds as well as other destination entertainment providers. We are continuing those discussions to figure out what's going to be the right fit for bringing that type of active amenity to the fairgrounds space," Young said.

Cinergy Entertainment venues typically run about 90,000 square feet, according to a news release. That's roughly what the city is seeking for a fairgrounds anchor tenant. At its Tulsa, Oklahoma location, Cinergy has an arcade, bowling alley, a movie theater with multiple screens, ax-throwing and a restaurant with a bar. Other locations feature escape rooms.

Last week, Young and the city revealed that it wanted to bring a destination retailer to part of 18 acres on the south side of Central Avenue as it shifted gears on the retail portion of what could eventually be a $180 million redevelopment of the entire Mid-South Fairgrounds.

That redevelopment includes a youth sports facility that is also intended to be a regional draw, like any retailer the city potentially signs. In total, the project is intended to turn a piece of Memphis' central city into something that is active year-round, not just for a few weekends during the University of Memphis football season.

A tenant such as Cinergy, or a similar brand, could tie the entire fairgrounds project together, Young said. It would bring an amenity to a vacant piece of land that is not part of a traditional retail corridor.

"It's definitely not a proven retail market yet. That's why we believe this is a perfect site for this type of destination retail because the traffic is not necessarily contingent on traffic counts. It's an attraction in and of itself," Young said.

It also fits with the tradition of the fairgrounds, a piece of land that once hosted the Mid-South Fair and Liberty Land Amusement Park.

"The fairgrounds have always been a place for fun and recreation. It would continue that theme and opportunities for family-oriented activities on the site," Young said. "It's a natural draw that can bring people and excitement beyond the days the fairgrounds is activated with sports... It could serve as an anchor to the hotel and the [other] retail amenities that we've explored."

Young said he hopes to have a signed letter of intent with a retailer by this summer. However, he noted that economics will likely dictate whether a deal with Cinergy, or any company, gets done.

"Each company will do their own due diligence to determine whether Memphis is the right market for them. And our goal is to ensure that all of the terms of the deal... make sense to maintain a high-quality site," Young said.

The housing and community development director said that Memphis' traditional economic development tools such as payments-in-lieu-of-taxes and others are available to make a deal work.

Retailer could help pay for fairgrounds project

Part of the desire for an anchor retail tenant at the fairgrounds is because such a tenant could help pay for the rest of the fairgrounds' redevelopment. In late 2018, the City of Memphis received state of Tennessee approval to turn the fairgrounds into a Tourism Development Zone.

The Tourism Development Zone allows for any increase in sales tax within it to be captured and used to pay down the project's debt. The trick is getting an increase in sales tax. A anchor retail tenant like a Cinergy, or something similar, would generate a significant amount of new, additional sales tax.

"It certainly contributes to the Tourism Development Zone bonds. We want to have an amenity on the site... This is the type of facility that would help to do that," Young said.

Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He welcomes tips from the public. He can be reached by email at samuel.hardiman@commercialappeal.com.