VOL. 128 | NO. 28 | Monday, February 11, 2013
EMPHASIS: Economic Development
By Andy Meek
With its own tax incentives, a narrowly focused group of development boards, a variety of neighborhood demographics and development clusters that run the gamut from commercial to residential, Downtown Memphis is a veritable petri dish of economic development.
Perhaps more than any other section of Memphis, Downtown is where the champions and ripple effects of economic development in Memphis are most clearly visible.
(Photos: Lance Murphey)
Perhaps more than any other slice of the city, it’s a section of Memphis where the champions and the ripple effects of economic development are most clearly visible. That’s partly because, while it’s no longer the geographic center of the city, Downtown nevertheless encompasses the city’s waterfront, political epicenter, entertainment and cultural landmarks and a multitude of business and corporate tenants.
In fact, regarding that latter point, two of the best places to work in Tennessee, according to Forbes, are found Downtown – St. Jude Children’s Research Hospital and the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz PC.
News that Downtown is losing a major corporate tenant – Pinnacle Airlines Corp., the headquarters of which will be shifting to Minneapolis in a matter of months, taking hundreds of Downtown workers with it – brings the high stakes of the economic development game Downtown into stark focus.
Political and civic leaders mounted an all-out push to convince Pinnacle to move into One Commerce Square a few years ago, and a package of incentives was put together especially for the regional air carrier.
On Friday, Feb. 8, a group of women gathered at One Commerce Square for the inaugural “Modern Day Woman’s Conference.” The gathering involved connecting young professional women with more experienced women who can serve as mentors.
If that event would have been held later this summer, because of Pinnacle’s move, it would have taken place in an office tower that’s only 38 percent occupied (down from One Commerce’s 77 percent occupancy now, with Pinnacle and its several hundred employees still there).
“Even though all those workers didn’t go out to lunch every day, it affects all of us, all the restaurants,” said Seamus Loftus, managing partner of the Downtown Irish pub The Brass Door.
Pinnacle executives plan to be out of One Commerce by May, about two and half years after the corporation became the anchor tenant in a key part of the city’s skyline.
“This is a high-stakes game,” Memphis Mayor A C Wharton Jr. lamented at a press conference in recent weeks upon word of Pinnacle’s decision to move. “And you’ve got to be prepared to win some and lose some.”
Downtown stakeholders are on the move to keep economic development going in the core.
Economic development officials caution, though, that it’s more complicated than stacking up the money spent on one side and business closings and departures on another side. There’s an additional halo effect, they say, from investments such as the one that came as a result of improvements made to One Commerce in advance of Pinnacle’s arrival.
The investment into One Commerce that brought Pinnacle also encouraged companies like Great American Steamboat Co. and Independent Bank to set up shop inside the tower when they otherwise might not have – when the space was still sorely in need of redevelopment.
Now that Pinnacle is on the way out, Downtown stakeholders are not sitting still.
“We’re in discussions with several different groups,” about what to do with the office tower post-Pinnacle, said Leslie Gower, vice president of marketing and communications for the Downtown Memphis Commission. “We’re being proactive about that. There are plans afoot to address that, and we’re working with the chamber to let people know what kind of office space is available.
“There’s still a lot going on, and you can’t let one setback slow you down. Downtown is still the community’s brand.”
She also made a larger point – that some of the best projects Downtown are ones that don’t need incentives at all. To that end, there’s been a whirlwind of activity Downtown over the past 12 months.
Madison Line Records, a nonprofit record label, opened in March.
It was private investment that helped the tech blog startup Nibletz.com relocate its headquarters to Memphis.
Beale Street Landing had its first official boat docking in April. Some 350 apartment units are open or in the works Downtown, and the Memphis Redbirds recently installed the largest video screen in minor league baseball.
Incentives did help a number of projects in the past year, with a small sample including the National Civil Rights Museum, which got a $25 million grant to expand and make improvements. North Star Destination Strategies began initiatives to help create more awareness of the South Main Historic Arts District.
The Downtown Memphis Commission also announced a new storefront grant to help Downtown businesses fund improvements.
“We always have several wheels going,” Gower said. “It’s not just about office recruitment. It’s not just about development projects, either. It’s also the public realm. It’s how do people feel when they come Downtown. Things like, whether it’s a safe place and whether there’s enough living space. Those are important, too.”