Legislative Leadership needed for Economic Development

Legislative Leadership needed for Economic Development

legislative leadership needed
for economic development
By Joe B. Kent // Guest Blogger

This article is being brought to you by HomeTown Home Services, Is it time for a Home Improvement?

City Councilman Chairman Berlin Boyd and County Commission Madam Chair Heidi Shafer along with their respective legislative bodies have a rare leadership opportunity window to legislatively curate and publicly craft local economic development policy. The leadership opportunity was introduced on March 1, 2018 in a Joint Memphis City Council / Shelby County Commission meeting with the establishment of a Joint Council/Commission committee focused on reforming the Economic Development Growth Engine (EDGE) and improving local economic development efforts.
Crisis Mode
The problem is the Joint Committee is effectively not functioning and has only met once since March 1, 2018 as the opportunity window closes with a soon to be departing experienced Shelby County Commission. An experienced Commission that is needed for the potential heavy lift of restructuring EDGE.
This surprising lack of meetings and public conversation occurs after Chairman Boyd stated “We’re in crisis mode” regarding local economic development in the Commercial Appeal two months ago. A crisis in the sense that the Memphis/Shelby ecosystem is not keeping pace with its municipal peers in total wage growth and etc. as local tax incentives for corporations and real estate investors explode. Moving with a sense of urgency and having public meetings while practicing legislative oversight adds needed vitality to the system while addressing the local economic development crisis.
Local Chairs in Boyd and Shafer appear to be waiting on the completion of yet another round of outside studies and plans to schedule needed Joint Committee meetings. Plans originated by the local economic development establishment, currently a point of concern and consisting of such organizations as Memphis Tomorrow, Greater Memphis Chamber and EDGE. This unnecessary delay in taking up the public meeting work of economic development exists instead of listening to the customer taxpayer. Customer taxpayers that include local experts and institutions.
Local Voice to Correct Rigged State
This waste of time and delay is concerning because considering outside local establishment driven recommendations in isolation without considering significant local input on the record is likely to result in more of the same. After all, that is what has happened in the past with the largely Memphis Tomorrow Fast Forward driven Brookings effort. Not taking in considerable local input regarding economic development policy gathered in a public setting is a HUGE legislative leadership miss and likely a continuation of the current rigged state of local affairs. A rigged state that seems to have gone on for the past seven years that includes a lack of formal local legislative oversight of the economic development complex accommodated by a press that doesn’t ask important questions.
Both Joint Committee Co-Chairs in Boyd (49:40) and Shafer (3:03:00) are on record in effect pointing to each other to call needed Joint Committee meetings. That is why an open letter has been sent to Co -Chairs Boyd and Shafer to ask them to come together immediately to call for the Joint Committee meeting while seizing this rare local legislative opportunity. The opportunity that requires the unique hand of legislative leadership to curate and craft economic development policy with the soon to be departing experienced Commissioners in concert with local public input. Much of the work does not require public hearing but just information gathering that would be put on the record to help local legislators lead, curate and craft local customer taxpayer driven economic development policy.
Next Steps
While it’s for certain that needed offline meetings out of public view are occurring regarding economic development, there are so many healthy opportunities for on the record testimony from the public to inform local economic development efforts. In addition to hearing from the public, it would be informative to hear genuine thoughts / convictions / concerns on the record from local economic development professionals and public officials. As opposed to hearing them speak from the bullet points of some plan of an outside consultant.

Since economic development impacts everything, here are specific suggested examples of some of the on the public record work the Joint Committee should immediately begin with to lead, curate and craft local economic development policy:

1. Define Economic Development

2. Encourage grassroots public and written comment

3. University of Memphis Dr. John Gnuschke of the The Memphis Economy on The Amazon Road Map

4. University of Memphis Mr. Ted Townsend Chief Economic Development and Government Relations Officer testimony

5. Commissioner Steve Basar’s expansion on site readiness to support economic development

6. David Waddell’s visionary ideas as featured in the Commercial Appeal

7. Tom Jones public commentary on local economic development after years of writings in his Smart City Memphis Blog

8. Mayor Strickland’s and Mayor Luttrell’s ideas for needed course correction

9. Joe B. Kent on the need to restructure EDGE and local career pathways implementation in support of Memphis Opportunity promotion

10. Brian Stephens explaining how the Greater Memphis Chamber Business Council fits into local economic development efforts

11. Phillip Spinosa on the Chairman’s Circle role in economic development efforts and an update on the Moon Missions and Accountability Committee

12. Outside plans from Community Lift, Greater Memphis Chamber and etc….

The above are just suggestions but are sure to leverage the customer taxpayer voice while facilitating the needed public conversation in the economic development policy effort.
Conclusion
The Memphis City Council’s and Shelby County Commission’s unique legislative hand is needed now to lead, curate and craft local economic development policy. This while protecting the customer taxpayer from the same people dominating the local conversation in Memphis Tomorrow, Greater Memphis Chamber and EDGE thus jilting the public voice with flowery outside plans and promises of a better tomorrow. The City Council and current experienced County Commission needs to go to work now in setting the stage for oversight while leading Memphis and Shelby County economic development policy efforts for years to come.
joe b. kent
Guest Blogger
Mr. Joe B. Kent has worked throughout the country on workforce and economic development projects and is a reform activist in Memphis. Joe B. has a BBA in Finance, Masters in Instructional Technology and is a certified Global Career Development Facilitator with an emphasis on labor market information.

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Vitality Displaces Stagnancy

Vitality Displaces Stagnancy

Vitality displaces stagnancy

By Joe B. Kent // Guest Blogger

This article is being brought to you by HomeTown Home Services, Is it time for a Home Improvement?

VITALITY DISPLACES STAGNANCY

Vitality displaces stagnancy. And vital systems in an investigative press and legislative oversight that check local economic and workforce development efforts are not working in Memphis and Shelby County. In fact, Commissioner Terry Roland referenced a need for a more investigative press in County Commission Budget Committee session on Wednesday June 27, 2018.

It’s known in local leadership circles but not press reported that new unneeded tax incentive programs for inner city real estate development are accelerating as true market demand increases which is the opposite of what should be occurring. Increased demand was just reported by The Memphis Flyer. It’s also known in local leadership circles but not press reported that over the last seven years, the Economic Development Growth Engine (EDGE) has systematically justified large corporate retention tax abatements which also benefit real estate investors using a bogus accounting model without adequate local legislative oversight. And it’s also widely known in local leadership circles but not press reported that excessive tax abatements for real estate development sacrifice true economic development that benefits all in safer/paved streets, a more prepared workforce and better public transit. Economic development is routinely defined as process that a community undertakes to improve the well-being of its people which real estate development alone fails to accomplish.

With proven degreed experience throughout the country in local economic and workforce development efforts, for over year now, I have been going on public record as a taxpayer activist in Memphis, TN. I have gone on record through public comment and continue to do so with local taxpayer funded non-profit boards and legislative bodies regarding the current state of Memphis economic and workforce development efforts.

Thus far, my findings are that the local press does not adequately call into question the progress of local economic and workforce development efforts and local legislative oversight is inadequate. For example, the Joint Council/Commission EDGE committee announced on March 1, 2018 finally after seven years has only met once since being established. This lack of meetings has yet to be questioned by the local press which points to a lack of institutional vitality as unneeded tax abatements accelerate and true economic development efforts suffer.

Instead of leading and crafting economic development policy through the work of public hearing, it seems legislative leaders are waiting to be enlightened by the Memphis corporate community leadership (MCCL) complex in Memphis Tomorrow, Economic Development Growth Engine (EDGE) and Greater Memphis Chamber. An MCCL complex that seems to mistake real estate development for economic development. Legislative leaders, through public hearing, are uniquely equipped to call on professional leaders from the education, corporate, small business and government sectors to craft, curate and lead local economic development policy efforts as opposed to relying exclusively on the MCCL complex.

Just about 10 days ago I attended the EDGE subsidiaries’ series of quarterly meetings as a professional activist promoting local economic development reform. Meetings included but were not limited to the Greater Memphis Alliance for Competitive Workforce (GMACW), an EDGE subsidiary and full EDGE Board meeting. The below sections address press coverage of the meetings followed by my personal experience as a taxpayer activist at the meetings.

Local Press Coverage of EDGE Meetings

Per Terry Roland’s committee remarks regarding “selective” local press coverage, coverage of the EDGE meetings varied widely. Press outlets chose not to cover the GMACW meeting and only covered the EDGE Board meeting. The reporting from that meeting varied widely between news organizations. The Commercial Appeal provided the most balanced reporting covering public dissent across multiple EDGE projects. The Memphis Business Journal only covered the Parkside TIF project and Memphis Daily News covered all projects except for Hollywood Feed without referencing any public dissent. The following sections describe my experience as a taxpayer activist at the meetings.

 

Greater Memphis Alliance for Competitive Workforce (GMACW) – June 20, 2018

Given the importance of local workforce development, one would think this to be an active Board. Think again. The GMACW Board managed to have only one public 15-minute Board meeting for the entire 2017-18 year. Based on that minimalist result, I mocked the result of one 15-minute public board meeting in the 2017-18 fiscal year to address the important local priority of workforce development.  

Further based on a report on the EDGE website after three years, GMACWs chosen MemphisWorks career navigation platform for students and adult learners had only 8,588 participants. These numbers should look more like 75,000 enrolled participants. This 75,000 participant estimate is based on my professional experience in the career and workforce development space throughout the country and what typically would be achieved in a city the size of Memphis over a three-year term. 

Increased participant results translate into filled jobs and benefits to the tax base. Result deficiencies translate into shortfalls in this case of approximately $10-15M in recurring annual Memphis/Shelby tax revenue shortfalls. To learn more, see MCCL Measured analysis.

EDGE Board Meeting – June 20, 2018

The EDGE Board who like the United States Supreme Court appears to have lifetime terms with most board members serving for as long as seven years, took up a variety of controversial items. The items include new residential payment-in-lieu of taxes (PILOT) and a second amended increased PILOT abatement for Hollywood Feed, a locally based pet store chain. 

In this meeting, as a professional activist, I objected to a list of items while asking for the resignation of EDGE Board members that had served more than four years. Additionally, I proposed that the excessive residential PILOTs in Broad and Thrive projects be reduced so that the abatement does not exceed projected tax revenue as per EDGE project summaries which would have saved taxpayers approximately $9M while still providing a $9M abatement to local developers.

 

With this compromised abatement, local developers would have been the beneficiary of $9M more in abated taxes here in Shelby County than in any other county in the State of Tennessee. This is because residential abatements are disallowed everywhere in the State except for Shelby County. The proposal for decreased abatements was not even discussed by the EDGE Board which then voted to approve $18M in excessive residential tax abatements when compared to the rest of the State of Tennessee while ignoring my proposed $9M compromise abatement. 

Next, I objected to the second increase in the Hollywood Feed PILOT doubling the abatement by $650K. The reason for the objection is that locally based Hollywood Feed with 70% store location growth over the last two years does not need an additional $650K in assistance from local taxpayers. With growth like that, the thriving Hollywood Feed should be open to surrendering their current PILOT abatement in full. During the Hollywood Feed presentation, a lady audience member new to EDGE meetings looked at me with her eyes wide open and said, “They are not supposed to be giving money to thriving businesses are they?” And I said, “They are certainly not supposed to be increasing the already existing abatement on two occasions !!”

But during deliberations on the increased PILOT, our trusted EDGE Board congratulated Hollywood Feed on their growth and in a split vote unnecessarily increased the existing Hollywood Feed abatement a second time by $650K using local taxpayer funds. 

Another item that was taken up at the EDGE Board meeting was the Parkside Tax incremental Financing (TIF) approval. Others besides me objected to this project based on disruption to the neighborhood and park surroundings. In total, in one meeting, the trusted EDGE Board appears to have unnecessarily abated a minimum of $10M in local taxpayer funds. The full transcript of my public comment remarks can be found here

Conclusion

The Memphis ecosystem needs institutional checks and balances in local legislative oversight and press to better function to serve local taxpayers in economic and workforce development efforts. This increased institutional vitality will displace stagnancy while helping insure needed progress in local economic and workforce development efforts that reside in the Memphis corporate community leadership non-profit complex. Increased vitality drives economic growth which results in a better more thriving Memphis for all.

 

Joe B. Kent

Guest Blogger

Mr. Joe B. Kent has worked throughout the country on workforce and economic development projects and is a reform activist in Memphis. Joe B. has a BBA in Finance, Masters in Instructional Technology and is a certified Global Career Development Facilitator with an emphasis on labor market information.

See All Articles by Joe

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