» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 11 | NO. 1 | Saturday, January 6, 2018

Memphis Experts See Economic Growth Building Off 2017 Into 2018

By Andy Meek

Print | Front Page | Email this story | Email reporter | Comments ()

With resolutions made and the new year now, another annual exercise rises to the forefront – predictions on what Memphis and its economy can expect in 2018.

If 2017 taught us anything, it’s that there’s so much we won’t be able to even remotely see coming, from Memphis bidding to become the potential home for Amazon’s second headquarters to action finally being taken on the Confederate monuments in city parks and so much more.

Given the news we covered in 2017, it is inevitable that much of what transpired last year will play a role in what happens over the next 12 months.

With that foundation and a bevy of sources across all beats providing their expertise on what they know and see in each sector, our editorial team will take a shot at giving you an idea of what this year holds, from politics to real estate and health care to sports and a whole lot more.

Politics/Government

At the outset of a busy 2018 election year locally, a six-candidate field for the Republican nomination for governor has already made its presence known in Shelby County as have the two Democratic contenders. The race for the U.S. Senate increasingly looks to be a set of pass-through primaries in August to a November showdown between former Tennessee Gov. Phil Bredesen on the Democratic side and U.S. Rep. Marsha Blackburn on the Republican side. Bredesen has no primary opposition in the early going. Blackburn faces former U.S. Rep. Stephen Fincher in her primary.

Big elections are coming in 2018, with voters electing a new Tennessee governor and filling the seat of outgoing U.S. Sen. Bob Corker. (Memphis News File/Andrew J. Breig)

In the 2018 county elections, six of the 13 seats on the Shelby County Commission are open with no incumbent seeking re-election – five because of term limits. Republican incumbent David Reaves is opting not to seek re-election.

Of the officials holding positions that are term-limited – no more than two consecutive terms – some are seeking other countywide offices in the May primaries and August county general election.

In May, Donald Trump’s new U.S. Attorney General Jeff Sessions visited Memphis and drew protests outside the federal building as Sessions met inside with federal and state prosecutors and law enforcement.

Protests like that characterized Trump’s first year as president in a county that was carried by his Democratic opponent in the presidential race.

A Memphis version of the Women’s March Downtown drew thousands of people the day after Trump took the oath of office in Washington. Other marches and protests followed the new administration’s first version of a travel ban and its immigration policies.

Another issue that drew protests was President Donald Trump wanting to end DACA, which gives deportation protection to children of illegal immigrants. (Memphis News/Houston Cofield)

Six people were arrested in August during one in a series of protests around the Nathan Bedford Forrest statue in Health Sciences Park after some began trying to cover the statue with a sheet.

Leaders of the reformed Shelby County Democratic Party as well as the new leadership of the city’s oldest civil rights organization, the Memphis Branch of the NAACP, sought to channel the energy of the uptick in protests.

Protesters and activists giving both organizations a try kept their protest calendars busy during the year as they pursued the NAACP’s long-game on issues and prepared for the 2018 local, state and federal elections.

Meanwhile, during a set of private meetings with local leaders, Shelby County Mayor Mark Luttrell pushed for an end to U.S. Department of Justice oversight of Memphis-Shelby County Juvenile Court that was mandated in a settlement agreement signed by county government, the court and federal officials in 2012.

Luttrell later followed up with a formal letter to Sessions signed by Sheriff Bill Oldham and Juvenile Court Judge Dan Michael. The letter set off a political firestorm, with the county commission and city council passing resolutions opposing an end to the oversight.

Ultimately, the DOJ lifted its oversight of due process areas where independent monitors had reported substantial compliance by the court and the county. But it left in place the more politically sensitive oversight of disproportionate minority contact in the way the court deals with African-American children.

At about the same time, with much less fanfare, the DOJ changed the terms of its collaborative review of the Memphis Police Department. The review agreed to by the Strickland administration and police director Michael Rallings was to review the department’s use of deadly force and practices as well as train officers in de-escalation techniques.

The new review stuck to technical assistance requested by the department and ended in August.

Speaking of oversight, there could be some changes coming to Shelby County Schools in 2018 in the wake of independent investigations that found grades were changed at some schools and that many schools have grade floors.

The investigation came about when former Trezevant High School principal Ronnie Mackin, who resigned before being forced out after a year in that position, revealed a grade-changing scandal at the school involving student-athletes. Former Trezevant High football coach Teli White was fired.

The grading fraud was found to exist at other SCS schools as well, but the system’s school board has yet to consider any sweeping policy changes, although board members have talked about changing the culture within the system.

On a more positive note, meanwhile, a new SCS charter school, Crosstown High School, is slated to open in the renovated Crosstown Concourse for classes in fall 2018.

Real Estate/Economic Development

Big River Crossing, a pedestrian and bicycle boardwalk along the Harahan Bridge that links Memphis and West Memphis, Arkansas, opened in 2017. (Memphis News/Houston Cofield)

On the real estate front, the biggest news looming over the Memphis market in 2018 is where Amazon will choose to place its second U.S. headquarters. For much of the last quarter of 2017, it seemed to be all anyone talked about. And rightly so, with 50,000 jobs and $5 billion in capital expenditures at stake. Cities hoping to land the online retail giant’s second headquarters appeared willing to do whatever it takes to close the once-in-a-lifetime deal.

Though many national experts and analysts don’t give the Bluff City much of a chance to land the bid, there is still a lot that can still be gleaned from the results, win or lose.

One of the most fascinating immediate results was that for a brief moment, representatives and officials from the entire county put aside their differences to make a unified pitch to Amazon. Whether this cooperative spirit was a flash in the pan or a sign of things to come remains to be seen.

Greater Memphis Chamber president and CEO Phil Trenary said at The Daily News’ annual Commercial Real Estate Review & Forecast Seminar on Nov. 2, “Mississippi is kicking our rear.” Trenary was referring to the 36 companies, 22,000 jobs and almost $1 billion in investment that Memphis has lost to its neighbors to the south, thanks in part to Shelby County’s inability to compete with Mississippi’s tax incentive package.

While local officials outlined a 30-year payment-in-lieu-of-taxes (PILOT) abatement for Amazon’s HQ2, $50 million in labor reimbursement and a $10 million investment to immediately upgrade the city’s transit and workforce infrastructure package to lure Amazon, many of the details – such as specific site proposals – have not been released.

Another large, publicly traded company will be occupying its new headquarters in Downtown Memphis in

ServiceMaster Global Holdings brought Nik Varty in as CEO and let Rob Gillette go, and Varty has begun a divide-and-conquer strategy to emphasize ServiceMaster business units as individual operating units to maximize their growth. American Home Shield was spun off in 2017.

The company will move about 1,200 employees into its new corporate headquarters in the former Peabody Place Mall in early 2018. The 360,000-square-foot mall was transformed into modern office space in the $35 million project.

Throughout 2017, a prevailing theme in real estate was a renaissance of multifamily and mixed-use residential projects, especially within core areas such as Midtown and Downtown. Memphis Mayor Jim Strickland made a case for these types of infill projects in May when he petitioned the Economic Development Growth Engine of Memphis and Shelby County to adopt a new Residential PILOT.

Real estate in 2017 was characterized by multifamily developments coming to Midtown, including Madison @ McLean, large mixed-use projects and the relocation of corporate headquarters. (Submitted)

Notable projects to come out of this push were Makowsky Ringel Greenberg’s Overton Gateway and “Madison @ McLean” multifamily projects, Focal Point Investments LLC’s apartments at 999 S. Cooper St., and 1544 Madison Partners’ eponymous $24 million mixed-use project.

There was a glitch, however, as under state law EDGE is not allowed to offer PILOTs for multifamily projects outside of the central business district.

City and county officials are expected to take this issue to state legislators in 2018, with the hopes of advancing a backlog of apartment projects waiting in the wings. If they are able to get the ball rolling on this, expect 2018 to spur even more multifamily projects than its predecessor.

Health Care/Banking/Startups/Restaurants

Construction and the development and expansion of facilities will be one of the themes of Memphis’ health care industry in 2018. That’s been the case for a few years now.

From Methodist Le Bonheur Healthcare’s ongoing expansion of its flagship campus in the Medical District to St. Jude Children’s Research Hospital’s massive expansion of its footprint, we’ll see a flurry of new headlines this year related to milestones on these and other projects.

In Germantown, Campbell Clinic will be busy with a $30 million expansion of its space near Wolf River Boulevard and Germantown Road, and a few systems – Baptist Memorial Health Care Corp., Methodist and Saint Francis – have been wrangling with state officials over Baptist’s and Saint Francis’ efforts to build new emergency facilities in Arlington. That’s a fight that is already scheduled to continue in 2018.

And the industry will continue growing in myriad other ways in 2018. Expect the usual litany of new hires as institutions chase talent locally and from around the world. And many will roll out advancements in technology, new processes, discoveries, research and more.

Banking in 2017 was dominated by Memphis-based First Tennessee Bank’s parent company making the biggest acquisition in its history, and a relatively new financial services company making waves in the local market by growing so fast.

First Horizon National Corp. is finishing up its integration with North Carolina-based Capital Bank Financial Corp. in what was a $2.2 billion deal. Its staunchest local competition – Nashville-based Pinnacle Financial Corp. – is using its merger with Memphis’ Magna Bank in 2015 to ramp up growth of local deposits and offices in the Memphis MSA. Pinnacle and First Horizon circled each other so much that some First Tennessee hires by Pinnacle sparked a lawsuit that was finally settled this year. Will 2018 bring another big merger or acquisition? Time will tell.

Pretty much everybody else in banking here is continuing to fight for the “community bank feel” identity. They tout making decisions locally, knowing customers by name, and pride themselves on customer service. These are small, nimble community banks and plan to stay that way.

In other news, Memphis in 2018 will likely host another “Summer of Acceleration,” a season when several startup accelerators host joint programming for startup teams who relocate here from around the country, and the world. The focus is on building a business from the ground up and on the process. It gives startup community stakeholders here room to help others build ventures that make a difference and have a chance at being a real, sustainable business.

On the restaurant and food fronts, developments coming in 2018 include Downtown Dining Week and Memphis Black Restaurant Week. A number of openings have also been lined up for 2018, including Central BBQ’s fourth Memphis-area restaurant at 6201 Poplar Ave.; Dave & Buster’s, across from Wolfchase Galleria; Atomic Tiki in Midtown; Grecian Gourmet in the South Main Historic Arts District; new additions to be announced at the South Main Market; and a revamped Brookhaven Pub & Grill, to name just a few.

Sports

Coming into the 2017 college football season, the fear was that another successful campaign for the University of Memphis under head coach Mike Norvell was certain to result in his leaving for a job in a Power 5 conference.

Instead, after Norvell became the first coach to lead the Tigers to 10 regular season victories and the program’s first AutoZone Liberty Bowl berth, he signed a new five-year contract worth an estimated $13 million.

The University of Memphis Tigers clinch the AAC West Division title. (Memphis News/Houston Cofield)

Senior wide receiver Anthony Miller and sophomore kick returner Tony Pollard landed on various All-American teams, and the Tigers’ future on the gridiron looked as bright as ever.

As linebacker Tim Hart said after the Tigers had beaten a nationally ranked UCLA team on national TV, “We showed people around the country that Memphis football stands for something.”

In November, Memphis held the ribbon-cutting ceremony for the state-of-the-art Laurie-Walton Family Basketball Center on its south campus. The hope is that the new, almost $21 million practice facility for the men’s basketball program can help with recruiting and player development.

The Tigers have missed the NCAA Tournament three consecutive years and looked to be a real long shot for a return in Tubby Smith’s second season as head coach, given that he had a roster heavy on junior college transfers and freshmen. Attendance also was an issue as non-conference home games in December were drawing fewer than 5,000 fans and at times only around 2,000 people were filling the FedExForum seats.

While the Memphis Grizzlies finished off the 2016-17 season with a franchise-best seventh straight playoff appearance, the offseason brought roster change as fan favorites Zach Randolph and Tony Allen were allowed to leave Memphis as free agents.

The Grizzlies’ front office maintained they were not giving up on “Grit & Grind” but said the team needed to get younger and play faster. After a hot start that included a victory over the defending NBA champion Golden State Warriors, the Grizzlies lapsed into an 11-game losing streak. Following the eighth straight defeat, in which second-year coach David Fizdale benched All-Star center Marc Gasol for the fourth quarter, Gasol voiced his displeasure and less than 24 hours later the team had fired Fizdale and promoted J.B. Bickerstaff to interim head coach.

As the calendar was flipping to 2018, the Grizzlies were struggling mightily and almost sure to miss the playoffs in the spring. And there was much debate among fans about whether the team should try to trade Gasol and begin a massive rebuild. But all future moves were complicated by the Grizzlies’ ownership situation being in limbo with controlling owner Robert Pera perhaps considering selling out to one or more minority owners. Speculation about the franchise one day being moved out of town also was on the rise.

The Memphis Redbirds win PCL Championship (Ivan Pierre Aguirre/El Paso Chihuahuas)

On the baseball diamond, former Memphis Redbirds second baseman and fan favorite Stubby Clapp stepped into the role of manager and led the team to a record 91 regular-season victories and a Pacific Coast League championship. Baseball America named Clapp its Minor League Manager of the Year.

News also broke that the Redbirds’ primary owner, Peter B. Freund, would have a majority ownership stake in a minor league soccer team set to begin play at AutoZone Park in 2019.

Meanwhile, the Memphis Hustle, the Grizzlies’ G League team, began play at the Landers Center in Southaven in the fall of 2017.

Daniel Berger won his second straight FedEx St. Jude Classic title in 2017 and the annual PGA Tour stop was scheduled for June 7-10 in 2018.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 110 405 5,939
MORTGAGES 141 492 7,092
FORECLOSURE NOTICES 0 85 1,115
BUILDING PERMITS 0 845 12,430
BANKRUPTCIES 39 255 4,343
BUSINESS LICENSES 49 184 2,363
UTILITY CONNECTIONS 0 138 2,518
MARRIAGE LICENSES 31 108 1,235

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.