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VOL. 126 | NO. 216 | Friday, November 4, 2011

Site Selectors Hear City’s Red Carpet Pitch

By Bill Dries

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A year ago this month, Tennessee Gov. Bill Haslam won the governor’s race and suddenly found himself in the same room with 26 other newly elected governors.

Shipping containers are loaded onto rail cars at the CN-CSX Intermodal Gateway-Memphis yard at Frank C. Pidgeon Industrial Park.
(Photo: Lance Murphey)

The event was a nonpartisan orientation for the new governors to help get their bearings on the nuts and bolts of running a state government.

When the discussion got around to what each governor wanted to be known for, Haslam noted that each and every one wanted to be defined as “the jobs governor.”

Haslam told the story to a group of a dozen or so site selection consultants in Memphis this week to hear from him and FedEx founder Fred Smith at a set of Greater Memphis Chamber events billed as a Red Carpet Tour.

The tour gave site selectors a chance to view the city’s assets including the FedEx Super Hub, Frank C. Pidgeon Industrial Park, Memphis Bioworks, the CN-CSX Intermodal Gateway-Memphis and other spots around town.

Attendees heard Smith tout Memphis International Airport as the best of the 240 airports FedEx works with.

And they heard Haslam tout his experience selecting sites as the head of Pilot Oil, the multistate, family-owned chain of service stations and stores before he became mayor of Knoxville and then governor.

Haslam and Memphis Mayor A C Wharton Jr. used the same phrase in talking with the consultants who have a large say in where new jobs are created – “we get it.”

“The issue is it’s a competitive world out there and a lot of states have become more and more generous with the incentive packages they offer out there,” Haslam said. “That’s where we have to decide, ‘Are we going to compete at that level or say no?’ We can’t afford to incentivize the company that much to come here. I think we can overcome that by being very personally aggressive in reaching out to businesses. At the end of the day it’s all about building personal relationships.”

Robert M. Ady, president of the Chicago site selection firm Ady International Co., also said the relationships help a company choose among finalist cities that typically offer the same package of land, access requirements and incentives.

“Companies don’t locate in specific places because they are concerned about the fact that maybe they are really not ready for it,” Ady said. “Maybe the site isn’t properly certified in terms of being shovel ready. Maybe the training programs are a little nebulous in terms of what we can do and what we can’t do. Each of those things help to make the final decision of whether we’re going to go here or whether we’re not.”

And the dollar incentives are going up as the number of jobs produced is going down, he said.

“Five or 10 years ago, a typical project might have been 100 or 200 people maybe more with an investment of $10 million,” Ady estimated. “Now a typical project might be $50 million and maybe 100 people. I think for a lot of reasons the new companies are going to be smaller … and more in terms of the type of investment they are going to have.”

Meanwhile, Wharton acknowledged that the nature of incentive-driven economic development was a factor – a vocal but ultimately minor one – in his recent re-election.

Wharton beat nine challengers last month with 66 percent of the vote. He joked that he wouldn’t be using the same campaign team again because he didn’t get 70 percent, which would have been near a record for a margin of victory in a Memphis mayor’s race.

“The whole mantra is that this administration is doing too much for business and not enough for people,” Wharton said, referring to critics including most notably Shelby County Commissioner James Harvey, who finished third in the mayor’s race, and the municipal labor unions who backed second-place candidate and former City Council member Edmund Ford Sr. “The reason I refer to the election and the results is that it communicated that people do get it. They know that it is about jobs – good paying jobs – jobs of tomorrow, not the jobs of yesterday.”

Haslam also acknowledged there is a balance that has changed in recent years from the economic development plums of the 1980s that employed more people.

PROPERTY SALES 85 305 21,577
MORTGAGES 62 223 16,417
BANKRUPTCIES 34 138 6,717