VOL. 126 | NO. 17 | Wednesday, January 26, 2011
Decision Places Elected Officials on EDGE Board
By Bill Dries
A new Memphis-Shelby County economic development entity will have elected officials on its board. The decision by county commissioners sends the resolution back to the Memphis City Council next month for final approval.
The commission’s decision this week to give one of its own and one of the council’s own a non-voting position on the board of EDGE – Economic Development Growth Engine – also signals the political discussion about attracting new jobs to the area is likely to continue.
Memphis Mayor A C Wharton Jr. and Shelby County Mayor Mark Luttrell originally didn’t want any elected officials on the EDGE board as they sought to streamline the local government approach to drawing new industry to the area and expanding existing businesses.
They put several of the boards that have the power to grant financial incentives and tax breaks under EDGE and created a director’s position that reports directly to both mayors.
Commissioners were firm this week that they should have “a seat at the table” as commission chairman Sidney Chism put it.
The commission amended EDGE and then approved it after approving the incentive package and $22 million in county bond financing for the Electrolux Home Appliances plant to be built at Pidgeon Industrial Park.
Commissioner Chris Thomas said the commission’s discussion of the Electrolux incentives and terms made the case for not including politicians on the EDGE board.
Commissioners questioned $150 million in government incentives including more than $90 million in state funding for a plant projected to cost $190 million.
“How come you need a subsidy from government?” Commissioner Walter Bailey asked Electrolux vice president Tom Vining.
“It’s an opportunity to help companies come into communities and create jobs,” Vining replied.
“But why is your product in need of a subsidy?” Bailey continued.
“I think that’s part of the competitive marketplace,” Vining answered adding Electrolux will spend $30 million a year on its product lines at the Memphis plant.
Luttrell and Greater Memphis Chamber senior vice president Mark Herbison said the incentives were necessary because of competition from other cities.
“I consider it more of an investment,” Luttrell said in response to the term subsidy. “The economic spin off is significant.”
“They’re being courted by states all over the country,” Herbison added.
Commissioner Wyatt Bunker, however, said that didn’t justify the incentives.
“It only points to the problem. This is not competition, it’s government intervention,” he said. “Is there a price tag on principles? … I don’t know how I can vote for this today and maintain my belief in free market principles.”
Thomas said subsidies for other government pursuits and goals are nothing new.
“This is capitalism, not Calvinism,” he said of the Electrolux deal. “You have to spend money to make money.”
Bunker was the only no vote. Bailey was out of the room during the vote.
After the vote, Vining said he understood the larger philosophical debate and didn’t take it as a sign the commission didn’t want Electrolux in the city.
“I think it’s the kind of open debate you should expect to have. … I think it’s appropriate debate,” he said. “From our end we’re thrilled to be here in Memphis and setting up operations.”
The question-and-answer session with commissioners Monday was the fourth for Vining in two weeks – two with council members and two with commissioners.
Other parts of this week’s economic development discussion were more about politics than representation or oversight.
When some commissioners wanted to make the commission chairman or his designee the nonvoting member of the EDGE board, commissioner James Harvey immediately objected.
Harvey thought the board seat should go to the chairman of the commission’s economic development committee. The chairman of the committee happens to be Harvey.