VOL. 133 | NO. 50 | Friday, March 9, 2018
EDGE May Get Tweaked as Economic Dispute Settles Down
By Patrick Lantrip
A March 1 joint session of the Memphis City Council and Shelby County Commission hosted by chairs Berlin Boyd and Heidi Shafer discussed, among other topics, the current state of economic development in Shelby County, and in particular, the role the Economic Development Growth Engine for Memphis and Shelby County plays in it.
However, once the discussion began, the only thing that became clear, is that it wasn’t.
One of the people in attendance was Greater Memphis Chamber chairman Richard Smith, who upon leaving the meeting felt the need to address what he considered glaring misconceptions surrounding EDGE, economic development, and the PILOT (payment-in-lieu-of-taxes) process.
In an email addressed to every member of the commission and council that was obtained by The Daily News, Smith took the opportunity to clarify which entity – EDGE or the chamber – is exactly responsible for corporate recruitment.
“The chamber acts as the marketing and lead-generating arm, bringing the prospects to Memphis, first and foremost, then helping them navigate the process and providing support in key areas specific to each individual project,” Smith, who is also president and CEO of FedEx Trade Networks, wrote.
Smith went on the say the chamber has had to pick up the slack in the latter two areas, and echoed another sentiment that was brought up at the meeting – the need for a “dynamic salesperson” at the helm of EDGE.
Smith’s email prompted EDGE chairman Al Bright Jr. to pen his own letter to the two legislative bodies in defense of his organization.
Bright pointed to a 2014 agreement between the chamber and EDGE that outlined the two entities’ respective roles.
“Among other things the Memphis Chamber was identified as the ‘lead entity for business attraction,’” Bright’s letter said. “EDGE is responsible for creating, managing, and improving public resource programs – such as Foreign Trade Zone 77, bonds, local tax incentives (i.e., PILOTs and TIFs), and various loan programs, while representing the City of Memphis and Shelby County governments on economic development issues.”
Bright said that when the agreement was drafted, EDGE, which was founded in 2011, was still a young organization and added that it may be time to reexamine the two organizations' roles.
“We agree with those who say it may now be appropriate to revisit the respective roles of the two organizations,” Bright wrote. “To the extent that the Memphis Chamber does not want lead our community efforts in business attraction, we can certainly work to resolve this issue.”
In support of Smith’s letter, chamber CEO Phil Trenary send an email to the Chamber’s Chairman’s Circle members, outlining their rationale behind the letter.
“Our 2018 goals and objectives as an organization are heavily weighted towards taking the steps necessary to position Memphis as an economic development juggernaut,” Trenary wrote. “And at our last Chairman's Circle meeting, you voted that the business community taking the lead in reforming economic development for our community is the top priority for our organization.”
In order to advance this goal, Trenary indicated in his letter that the chamber would be commissioning an economic development study that would act as their roadmap moving forward.
“Our success in transforming our economic development efforts and once again have a growing economy creating the good jobs necessary to break the cycle of poverty depends on a unified voice of the business community,” Trenary continued.
After the dust settled, The Daily News reached out to several members of the city council and county commission including Shafer, Boyd, Jones and commissioner Willie Brooks (the latter two serve as nonvoting members of the EDGE board) for their thoughts, and only Shafer responded by press time.
“EDGE has some really good bones, but we have some areas that need help,” Shafer said. “One of the frustrations is that commissioners and councilmen don’t have any idea what taxes are abated until we read about it in the paper, and that’s not OK. The communication between EDGE and everyone else doesn’t seem to be working well.”
Shafer said that while she supports EDGE, she feels as though there is too much on the plate of current EDGE CEO and president Reid Dulberger’s plate, adding that while Dulberger is one of “the smartest numbers guys out there,” she feels as though an additional position should be created to act as a salesman for the organization, something she feels is currently missing.
“I’ve worked for two Fortune 500 companies and I run a couple of businesses, and I don’t usually find that skill set overlaps in one person very often,” Shafer said. “They are two different jobs, and you don’t find those talents very often in the same person and even if you did, would they have enough time to do both of those?”
Shafer also addressed Smith’s comments that EDGE’s PILOT process is too cumbersome, which results in the loss of business to Mississippi, which has a process that is generally regarded as more streamlined and less transparent.
“Mississippi has an income tax, which they use to abate their taxes more freely,” she said. “We don’t have an income tax, so our whole structure is different. But one of the things we can do is make sure our processes are more one-stop shop. That’s what EDGE was supposed to kind of do, and I think they have made good strides, but it’s a heavy lift.”
Moving forward, Shafer said that she formed a joint subcommittee with members of the commission, council and chamber to look into what can be done and report back to the next joint session.
“In the meantime we’re not standing still, we have our lawyers and our staffs on both sides of the aisle looking at what it will take,” she said.
When asked to comment on what he think this means for EDGE moving forward, Bright said what people don’t necessarily understand is that local economic development is a collaborative effort involving numerous organizations including the Greater Memphis Chamber, TVA, MLG&W, the Tennessee Department of Economic & Community Development, EDGE, the Workforce Investment Network, Greater Memphis Alliance for a Competitive Workforce and others.
“The chamber and EDGE work together daily on a variety of economic initiatives,” Bright told The Daily News. “And while we are all proud of the successes we’ve had together, we all understand that there is much more work to be done for our community.”