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VOL. 133 | NO. 158 | Friday, August 10, 2018

As Expected, Study Shows Memphis Lags Behind Peer Cities in Economic Development

Special to the Daily News

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Greater Memphis Chamber leaders say they’re moving aggressively to improve economic development efforts after a new study confirmed what they already suspected: that Memphis and Shelby County are at a serious competitive disadvantage to a number of peer communities.

An analysis by Boyette Strategic Advisors found that high tax, crime and poverty rates, coupled with lack of easy access to industrial properties and a disjointed approach to new business recruitment, are hindering economic growth.

Positives identified by the chamber-commissioned study included a relatively low cost of living; a younger labor force, especially millennials and Generation Z residents; and a more educated population, measured by the percentage of residents holding at least associate degrees, compared to some peers.

Memphis and Shelby County were compared to seven communities that are most often rivals for new projects: Nashville-Davidson County, Clarksville-Montgomery County, Tennessee and Olive Branch-DeSoto County regionally; and Dallas, Indianapolis, Louisville and Birmingham nationally.

The study found Memphis’ cost and incentive structure lined up most favorably for distribution projects, was least competitive for advanced manufacturing projects, and fell in the middle of the pack for back office, information technology and corporate headquarters.

The chamber booked the Boyette study against a backdrop of increasing frustration over the city’s loss of population and tepid growth in jobs and the economy.

Chamber chairman Richard W. Smith has called for overhauling the community’s approach to economic development, and the Boyette study was intended to identify what’s working and what isn’t.

Smith rankled some community residents last spring when he suggested minority participation requirements were holding back economic development efforts. He later backed off a proposal to soften the requirements.

“Much of the information we found from the Boyette Study was not surprising. The findings…reinforce many of the issues we have believed or suspected for years,” Smith and chamber president Phil Trenary wrote in a cover letter accompanying Boyette’s executive summary.

“We are not as competitive as we need to be to attract the robust growth needed to reverse some of our city’s biggest challenges,” the letter continued.

Chamber takeaways included the importance of maintaining the only incentive currently available, property tax abatement, as well as needs for fewer restrictions on the incentives; better coordination among cities and agencies; and for “an inventory and easy-to-use system for sites and buildings for large-scale projects.”

Boyette said, “Lack of collaboration between the incentive-granting body (Economic Development Growth Engine) and the marketing body (Greater Memphis Chamber) of economic development in Memphis/Shelby County, as well as confusion of their roles, was a point of frustration for study respondents. Under the current model, study participants suggested that processes were not customer-friendly or well-coordinated.”

The study also found that Memphis had the highest crime and poverty rates, “factors that participants cited as reasons to skip over Memphis/Shelby County when evaluating potential expansion or relocation projects.”

The chamber said it’s already taking steps based on the study’s results, including adding talent in key positions and moving toward a “more data driven and targeted approach to recruitment…”

“Our vision is to turn Memphis and Shelby County into an Economic Development juggernaut that creates prosperity for all,” Smith and Trenary wrote.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 139 346 19,792
MORTGAGES 141 337 22,770
FORECLOSURE NOTICES 0 13 2,935
BUILDING PERMITS 290 657 40,661
BANKRUPTCIES 53 155 12,641
BUSINESS LICENSES 23 56 6,430
UTILITY CONNECTIONS 31 112 7,507
MARRIAGE LICENSES 13 60 4,513