CKX Puts Brakes On Graceland Plan

The lousy economy forced CKX to scale back plans to develop Graceland and the surrounding area, the company said in a Securities and Exchange Commission filing.

Expanding visitorship and adding new attractions, shops, and hotel adjacent to The King’s former Memphis home would take several years and substantial financial investment. The company, which owns Elvis Presley Enterprises, reported a $16 million loss in 2010 in a March 9 earnings call.

The filing also said expenses for operating the Memphis tourist attraction rose last year because of higher professional and legal fees that were primarily related to a 2010 master plan that has been postponed.

While the company is exploring opportunities to build a new Heartbreak Hotel with a business partner, other previously studied parts of the redevelopment would happen only in “incremental steps,” depending on the economy, CKX CEO Michael Ferrel said.

“We ran straight into a headwind for what this project was supposed to be,” Ferrel said. “It’s going to be done on a different timetable than we first anticipated for reasons beyond our control.”

CKX has been studying ways to redevelop Graceland and the surrounding area for years, with the possibility of breaking ground in 2011 or 2012. Ferrel said in August that tough economic conditions over the past two years, including a dearth of financing for construction and a drop in consumer spending, had delayed the study looking at improvements.

Elvis Presley Enterprises President/CEO Jack Soden said the visitors complex development is on a slower track, but the company is still committed to investing in the long-term growth of Graceland.

“It’s designing and developing with a sharper pencil, and that’s the new economy,” Soden said.

CKX, which also owns the “American Idol” TV show, said in October that it was no longer discussing a potential sale of the company. CKX had received interest but did not get any acquisition proposals it felt were in the best interests of shareholders.