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VOL. 133 | NO. 165 | Tuesday, August 21, 2018

Strickland Open to Talks About Idea of City-Only Industrial Development Board

By Bill Dries

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Memphis Mayor Jim Strickland says he is open to discussing the idea of a city-only Industrial Development Board along with other ideas to be explored by a study group approved by the Memphis City Council last week.

“I’m always open to trying to do things better,” Strickland said. “I do believe that we could make improvements in economic development.

“We could accelerate what EDGE is doing but I also don’t want lost in the discussion what successes we have had.”

Strickland is referring to the joint city-county Economic Development Growth Engine – or EDGE – organization that functions as an industrial development board, issuing tax abatements as incentives for economic development projects.

Last week, the Memphis City Council and the Shelby County Commission took the recent discussions about changing the local approach to economic development to a new level. One possibility is the city withdrawing from EDGE and forming a city-only Industrial Development Board.

The council approved forming an Industrial Development Board Evaluation Committee devoted “to issues related to development, growth and meaningful collaboration between stakeholders.”

The committee is to make its recommendations to the council within 90 days once appointed. From there, council attorney Allan Wade is authorized by the same resolution to “draft legislation to ensure the needs and concerns of the Memphis City Council are addressed. And the council’s attorney is authorized to explore changes to the existing Industrial Development Board structure,” it reads.

That specifically includes the city pulling out of EDGE to create a separate Memphis Industrial Development Board, said council chairman Berlin Boyd, who co-sponsored the resolution with council member Reid Hedgepeth.

Boyd said the city has been “outpaced.” He pointed to the Electrolux and Mitsubishi plants as the last significant economic development projects within the city – both before EDGE was up and running in 2011.

But Strickland points to keeping the ServiceMaster headquarters in Memphis and its relocation Downtown, the Amazon fulfillment center on the Memphis side of the state line and the move to a second convention center hotel complex since he took office in 2016.

“The challenges that we face in economic development are not because of EDGE. Our challenges are workforce development, land and aggressive sales,” he said. “I do think we could see better recruitment in sales. Until now that’s been the chamber’s No. 1 role in economic development.”

EDGE president and CEO Reid Dulberger has repeatedly said that at the outset of EDGE’s creation the agreement was that the Greater Memphis Chamber would sell site consultants and their corporate clients on relocating or expanding to Memphis, with EDGE being the agency that managed incentives and specific tasks to get those businesses opening or expanding in Memphis and Shelby County.

“It’s time for the administration, the City Council, County Commission and the new county administration to somewhat be on the same page – grab the bull by the horns and make sure we can have new economic growth opportunities,” Boyd said.

The use of the word “somewhat” is significant.

The day before council approval of the evaluation committee, County Commission chairwoman Heidi Shafer introduced a resolution meant to be a joint city-county resolution, dependent on council approval, to give the council, commission and the chairman of the EDGE board the power to select new board members and leave the hiring and firing of the EDGE president and CEO to both legislative bodies. The EDGE president and CEO would also report directly to the EDGE board instead of the two mayors who now appoint him.

The commission delayed any vote on the resolution for two weeks. More discussion will come Wednesday, Aug. 22, in committee sessions.

But Boyd indicated later there may not be any joint resolution on that front because both governments couldn’t agree on exact terms of such a change.

“Everyone was all over the place as far as not knowing what direction they wanted us to go in,” Boyd told council members last week.

Some county commissioners are reviewing a legal opinion from the county attorney’s office on what the commission’s legal powers are related to EDGE. That legal opinion hasn’t been made public because the commission has taken the position that such opinions are protected by attorney-client privilege.

While commissioners are concerned about EDGE’s CEO reporting to both mayors and not the board, council members say their concern is results.

“What we are doing right now is not working. We need to either change EDGE or we need to have our own IDB,” Boyd said. “Germantown has their own IDB. Collierville has their own IDB. Germantown and Collierville, they can come to Memphis and maybe can get somebody to move to Germantown or Collierville. Yet EDGE cannot go and compete with their IDB.”

Boyd says a city IDB could also abate county property taxes through a memorandum of understanding with county government similar to agreements IDBs in the suburban towns and cities have.

Hedgepeth ties the success of economic development within the city to growth in the city’s population and thereby its tax base to provide services.

“We’re going to have to raise our taxes or we are going to have to grow our economy. And what we are doing now isn’t working. We can do things a lot of things better to get more tax base in this city than what we are doing now,” Hedgepeth said. “I don’t think there are many who would raise their hands and say we are knocking it out of the park.”

Boyd agreed as he talked about “streamlining our process.”

“We just want even ground,” he said of the economic development pursuits in the six suburban towns and cities in Shelby County.

PROPERTY SALES 56 56 9,658
MORTGAGES 49 49 10,665
BUILDING PERMITS 212 212 21,170
BANKRUPTCIES 49 49 6,157