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VOL. 129 | NO. 173 | Friday, September 5, 2014

Competition Calls

New county leaders express economic development concerns

By Bill Dries

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Economic development and the quality of jobs coming to Shelby County are the dominant issues as county elected leaders begin a new four-year term of office this month.

Shelby County Mayor Mark Luttrell at the start of his second term says local economic development efforts need more than payments-in-lieu-of-taxes as an incentive. 

(Daily News/Andrew J. Breig)

And there are plenty of indications the local strategy is about to change, or at least shift, in response to the resurgence in manufacturing and distribution in North Mississippi.

At their first committee sessions of the term, Shelby County Mayor Mark Luttrell told county commissioners Wednesday, Sept. 3, that local economic development efforts need more than payments-in-lieu-of-taxes as incentives.

“Tennessee traditionally is a very, very conservative state when it comes to incentives. … I agree with you, we need more than just PILOTs,” Luttrell said. “We are working … to come up with a proposal to take to the General Assembly that hopefully addresses this issue.”

Luttrell and Memphis Mayor A C Wharton Jr. have already been to Nashville in recent weeks seeking help from the state, specifically Gov. Bill Haslam, in the attempt to keep Cummins Inc. from taking an expansion of its Memphis presence as well as most or all of its existing Memphis jobs south of the state line to DeSoto County or Marshall County.

Greater Memphis Chamber senior vice president Dexter Muller briefed the new commission on the chamber’s economic development efforts as well, touting a set of recommendations to come this fall from the Economic Development Growth Engine of Memphis and Shelby County.

“We’re not knocking it out of the park,” Muller said of current efforts, which rely heavily on PILOTs. He defended the tax abatements as necessary and worth the return in terms of property taxes paid, even with the abatements factored in, that are more than the city and county were getting from the property before development.

“You can’t neglect the importance of PILOTs,” he added.

Muller also told the commission that the post-recession economic recovery has been slower in coming to Memphis, with local jobs created in the wake of the recession going unfilled as Memphians are out of work.

He made the point the same day that Haslam and other state leaders announced a $16 million expansion of Magna International, assembling car seats, near Spring Hill, Tenn., that will create 357 new jobs there.

The week before, the state announced General Motors will make small gas engines for five GM brands and 27 models, as well as the production of a new midsize Cadillac, at its Spring Hill plant.

Haslam and the state announced Tuesday AIG will expand its Nashville operations with a new headquarters, creating 200 jobs there over three years.

It’s an issue of job training and pointing job searches for the new employers toward not only those looking for work who are trainable but also pointing the job searches to those already employed in similar jobs to create a competition for workers that will raise wages.

Commissioner David Reaves questioned whether training programs in Memphis that moved into high gear with the coming of the Electrolux and Blues City Brewing Co. plant have created workers who are now being drawn to North Mississippi by the boom in manufacturing jobs there.

“How much of our workforce is driving that growth in DeSoto County?” Reaves asked.

The chamber is gathering the migration numbers.

The effort at Southwest Tennessee Community College in workforce training geared to specific employers was at first a reaction to the difficulties both companies encountered as they began hiring after setting up shop in Memphis.

From there, it became more of a continuous program designed to serve the changing needs of existing companies and tout to economic development prospects.

“Our competition is slipping up on us,” commissioner Terry Roland commented as he called for something beyond payments-in-lieu-of-taxes for incentives.

Meanwhile, commissioners Willie Brooks and Walter Bailey had questions for Memphis Convention & Visitors Bureau President Kevin Kane about the quality of jobs in the city’s tourism industry.

“It’s not just entry-level jobs,” Kane replied, saying those in the industry can begin with such jobs and work from there to owning their own businesses.

Commissioner Melvin Burgess asked if there might be room to locate some small businesses at the Memphis Cook Convention Center, which the bureau operates.

Kane says the center is occupied 85 percent of the time with meetings and events.

Kane also pointed to hotel occupancy being up in the city 11 percent over last year, the biggest increase in the Southeast U.S., including Nashville.

PROPERTY SALES 41 308 2,265
MORTGAGES 47 379 2,607
BUILDING PERMITS 128 1,018 6,068
BANKRUPTCIES 53 255 1,787