New mayor, new vision
Smith and Harris represent separate visions for Memphis. Both are focused on the economic future. The routes they would take there are different.
Weeks before he was certain he’d win office, Lee Harris met Richard Smith.
Smith, a FedEx executive, remembers he mostly talked.
Harris, a University of Memphis law school professor, mostly listened. What was said that day is worth recounting. Smith and Harris represent separate visions for Memphis. Both are focused on the economic future. The routes they would take there are different. And in some ways they are in conflict.
Memphians will see all this play out in the next few weeks.
Already, members of the Memphis City Council and Shelby County Commission are staking out positions.
Behind it all, though, are two competing visions.
Growth or regrowth?
Harris will become mayor of Shelby County on Sept. 3.
Harris would use the borrowing power of the state’s most populous county to spur regrowth in old Memphis neighborhoods and ease poverty.
Smith, the Greater Memphis Chamber chairman, says the local economy has stagnated and first ought to grow to afford revitalization. Behind the two visions are the simple numbers. From Millington to Bartlett, Collierville, Southa-
ven and Marion, suburbs in three states ring Memphis. They contain about 250,000 mostly well-off households. Memphis, the old city of nearly 250,000 households, contains almost 100,000 impoverished and working-poor families.
If middle-class families searching for relief from crime and school worries continue to move out of the city, the migration would further strain the Memphis tax base and its ability to sustain services such as parks and police.
Smith and Harris propose different solutions to deal with this matter.
2 solutions
Harris is a populist. A graduate of Yale law school, he wants blight and poverty eased, and favors building four or five $100 million public schools in humble neighborhoods.
Better schools would help children climb out of poverty. Improved education also could draw new residents in waves. They’d repair blighted houses to live in near the schools, bring new life to entire neighborhoods. He’d have the county borrow the school construction money.
Smith is a pragmatist. The son of FedEx founder Fred Smith, he’s a lawyer by training and an insider in Memphis politics, but has sounded like an outsider.
While he criticizes no one, Richard Smith argues metropolitan Memphis’ economy has stopped growing, starved city and county governments for tax revenue and stifled job creation.
Since the winter, Smith has tried to put in motion an effort to recast the main economic development agency, the city-county EDGE board, in a bid to ramp up new jobs and the tax base.
Meeting time
When Memphis entrepreneur J.W. Gibson earlier this summer offered to introduce Smith and Harris, the FedEx executive figured it was time to air his own goals.
“He just listened,” Smith said after the meeting with Harris. “Economic development is not what he ran on. His focus is poverty, inequality, opportunity. I think the things we’re trying to push are 100 percent interlinked.”
In the meeting, Smith remembers he pointed out Shelby County government’s responsibilities include the jail and courtroom complex at 201 Poplar.
“I told him, ‘The county funds health care, the school system and 201. What money is left to tackle inequality? Very little,’ ” Smith said. “You have to either raise taxes or grow revenue.”
Higher county taxes are part of the conversation due to Harris’ new-school strategy. The county can issue bonds, which are a kind of loan from investors, and spend the money on new schools, but then would have to repay the investors.
Harris maintains the county can pay back investors without raising taxes. This is worth doing, he said. Rejuvenated schools would improve education, draw new residents and give Memphis families a reason to stay rather than move away.
Taxing questions
Smith is uncertain the county could build $500 million worth of schools without raising taxes.
“I’m not averse to raising taxes if I have to,” Smith said. “If I thought it would work I’d gladly pay more taxes.’’
But if schools are built and taxes go up but people don’t move back into the city, higher taxes could spur an out-migration. Smith prefers to build the economy first.
“Top-line growth is good for all of us,” Smith said. “If that’s what’s going to give Mayor-elect Harris the revenue he needs to reduce blight, help people get a second chance and do all the things he’s talked about, you have to have the money to do it.”
Looking ahead
Exactly what happens next isn’t clear.
What does look likely is change at the city-county EDGE board.
It’s no secret many Memphis residents, Harris included, have little regard for EDGE, the main agency that awards expanding businesses the property tax cuts known as PILOTs. Various agencies have approved an estimated $500 million worth of tax cuts throughout Memphis and Shelby County over the years.
Like many city residents, Harris doubts the tax cuts spurred many jobs in humble neighborhoods. He once told The Daily News that PILOTs amount to “giving away money to corporate interests.”
Harris’ campaign focused on poverty and blight, not EDGE and PILOTs. Despite his campaign stand, one of the first matters he’ll face in office is the future of EDGE.
Politics
The letters stand for the Economic Development Growth Engine of Memphis and Shelby County.
The agency was set up so its boss, chief executive Reid Dulberger, a former Greater Memphis Chamber official, reports to the county mayor and the Memphis city mayor.
Smith’s idea for EDGE reform hinges in part on changing these reporting lines. He says economic gains were thwarted in part because the chamber and EDGE have not communicated well, and also because this reporting relationship blurs accountability.
Dulberger should answer to EDGE’s board of directors, Smith said. Just like in a traditional company, the board would monitor and fire the chief executive if they did not perform.
Shelby County Mayor Mark Luttrell disagrees. Luttrell maintains mayors are held responsible for economic development. So EDGE’s chief executive should report to the mayors.
“Most other towns crawled out of the recession a lot faster than Memphis,” Smith said. “No one held the mayors accountable for what happened here.”
Reform
If the positions Smith and Harris represent can be merged, made to work together, it might improve the 100,000student Shelby County Schools, ease poverty and grow the economy.
Memphians will hear a lot said about all this in the coming weeks.
For now, the discussion is taking a political shape.
With term limits barring Luttrell from serving another four years, and Harris now replacing him, Smith’s initiative has gained ground.
EDGE reform committees were set up last week by members of the Memphis City Council and Shelby County Commission. In the county, Commission Chairman Heidi Shafer advocates new rules. She said the commissioners should hire and fire EDGE’s chief executive.
In the city, Council Chairman Berlin Boyd touted exploring EDGE’s future. The new committee will report back in about 90 days. He prefers the city withdraw from EDGE and form a new city economic agency similar to the Industrial Development Board that preceded EDGE.
“We have to write our own narrative in Memphis as to what we’re going to be,’’ Boyd said.
‘Ramrodded through’
Just what the new county mayor wants to see isn’t clear. Harris has been silent in public on this topic.
“I think the new county commissioners will have a lot of discussion about economic development,” Harris said. “I don’t want to take it up until I take the reins. I don’t want to pretend there are two mayors in the county. Mayor Luttrell is the mayor for another two weeks.’’
While Harris took a diplomatic position, County Commissioner Steve Basar chided other members who, like him, will leave office in September but advocate EDGE reforms before the new commissioners are seated.
“EDGE was created to take politics out of the process of economic development and make it more efficient,” Basar said. “I’m troubled by people trying to play around without that, especially in the last two weeks of their term. I’m just disappointed this is being ramrodded through.”
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at evanoff@commercialappeal.com and (901) 529-2292.