Local elected officials often use sound bites to preserve the backwards Memphis economic development complex of the 1940s. These sound bites, without quantitative context, while true in isolation, don’t tell the complete story.

In City Council on Tuesday, Councilman Berlin Boyd said that the public doesn’t understand PILOTs and that the Council should be careful in their discussions on PILOTs while stating that most PILOTs provide a net financial benefit to taxpayers. And Commissioner Brandon Morrison, on Wednesday in Commission Committee said, that Memphis has the highest property tax rate in the State which might dissuade business investment. Both above statements are true but without needed quantitative context these sound bites result in an incomplete story from which taxpayers can make informed evaluations.

Further, Councilman Martavius Jones, in City Council raised concerns about relatively flat tax revenue growth and depreciation on personal property assets that receive the benefit of tax incentives. Jones thought it would be helpful to have the County Trustee appear before the Council Economic Development Committee. This may help some but not much as the Trustee effectively bills and collects the reduced tax payment as part of the payment in lieu of [full] taxes (PILOT) while publishing an annual report.

And finally, it would seem that a check on excessive PILOTs would most appropriately occur in Jones’ Budget Committee to take up PILOT reform and future restraint on budget busting excessive PILOTs.

Analysis – More Complete Story PILOTs

The question that should arise with relatively flat local tax revenues in times of economic expansion is:

“Are Memphis/Shelby taxpayers paying excessively for economic growth through tax abatements?”

And the answer is absolutely in $200-$400M in excess depending on how local PILOTs are benchmarked!  The most egregious form of this excessiveness comes when real property taxes are abated on existing property in addition to new capital investment while providing 75% tax abatements for all for 10-15 years. It would also seem, abating taxes on existing real property would undermine the Pre-K funding formula.

But back to Boyd’s remarks, much of the public does not understand PILOTs to include legislators and perhaps even those on abating boards. A couple of reasons for the confusion is 1) the bogus EDGE projection accounting showing huge projected gains while local property tax revenues are relatively flat and 2) the 75% abatement amount for corporate/real estate interests naturally raises concerns where taxpayers don’t participate at least as much as corporate interests in tax revenue growth from economic development activity.

Further, local Memphis/Shelby taxpayers live in a relative bubble where there is no plan or defined measurement for  economic development. To that extent, the below bullet points can document the excessiveness of the Memphis/Shelby economic development complex where abating boards are incented to represent corporate/real estate interests over the taxpayer through fee revenue based on the overall size of job incentive PILOTs:

3 corporate PILOTs in Nike, IP and FedEx Downtown totaled $148M exceed all of Indianapolis’s incentives that totaled $135M for 110 projects.

5 corporate PILOTs in Nike, IP, FedEx Downtown, Technicolor and Valero totaling $208M exceed all of Nashville’s PILOTs at $200M for 25 projects

90 Memphis projects at $500M+ exceeds by 50% both Indianapolis and Nashville PILOTs at $335M for 135 projects

A macroeconomic analysis, which reviews total employed job throughput using Bureau of Labor and Statistics Quarterly Census of Employment Wages, shows that Memphis paid $14.5K per job while Indianapolis and Nashville both paid $2.5K per job.

The above is a full-blown Memphis/Shelby ecosystem nightmare brought to taxpayers by the FedEx/Memphis Tomorrow corporate community leadership complex. It can’t be defended on the political right or left as it is just Neanderthalishly STUPID in excess and hurts the entire community.

With historically twice the property tax rate of Nashville with $200M in job incentives, given the above analysis, had Memphis/Shelby had 50% total wage growth since 2010 like Nashville, the $500M in job tax incentives could be defended . But Memphis/Shelby had below average total wage growth for the period at 26% while Indianapolis had about average total wage growth at 32% and $135M in total tax incentives.

Next as far as Jones concerns over depreciation on abated personal property taxes, corporate interests enjoy a greater abatement in early years when personal property is more fully valued. For a 10 year abatement the personal property assets are annually appraised at an average value of 42% and for 15 years 35%. By the end the abatement term, when abated personal property returns to the tax rolls, the original property would be valued at 20% of its original value.

Overall, of EDGE’s capital investment figures, approximately $3.4B has been invested in real property, $1.6B in personal property while $450M in existing real property, which is most concerning, has received the benefit of tax abatements.

In short and on balance, given the above excesses and with a botched from the top workforce development system,  Memphis/Shelby has not been engaged in the work of economic development. Instead, the bully hack FedEx/Memphis Tomorrow economic development complex has been engaged in feeding on a community in need while subsidizing corporations and real estate developers under hack “trickle down” better tomorrow theory. The above activity significantly undermines true economic development in safer streets, small business and workforce development.

The solution to correcting the above excesses is right sizing abatements using the following formula that most in the general public would understand. That formula is 50% of new capital investment provided current job levels are maintained while abating 1% of total wages for new jobs only. EDGE term and investment minimums would remain in effect. Applying the above formula to historic abatements would have reduced overall job incentives by $200M since 2010 while right sizing abatements on a per job basis making Memphis abatements twice as much as Nashville.

This proposed reform generously surrenders the benefit of the nationally low- cost business environment of Memphis while recognizing the high Memphis tax rate argument. Another argument that has been surrendered vs Nashville and Indianapolis is a minimum wage eligible for abatement which is now set at $18 per hour in Nashville and Indy.

The below charts show how historic Memphis job tax incentives compare to Nashville on a per job incented basis in actual terms on the left while doubling the Nashville abatement amount on the right to compensate for the higher Memphis tax rate.

The charts below show the impact of the proposed job tax incentive reform model based on PILOT history. In effect, the proposed reform model would still be in actual terms more than twice the amount of Nashville on a per job basis amount as shown on the left while right sizing PILOTs and still being more than Nashville when considering the higher Memphis tax rate as shown on the right. This proposal generously surrenders the lower Memphis business cost operating environment and minimum eligible wage arguments.

To achieve overall 50% on new capital investment, local companies would probably get less than 50% abatement while relocating companies would get more than 50% abatement to compensate for relocation costs to bolster the success rate of external economic development recruitment work. See below charts:

Analysis – More Complete Story High Property Tax Rate

Commissioner Brandon Morrison regularly expresses concern for the high Memphis/Shelby property tax rate regarding economic development work. She is right. The Memphis/Shelby property tax rate is high both on a statewide and national basis. But even with the higher property tax rate, Memphis/Shelby has a low business cost environment ranking 13 out of 100 cities.

The chief question for businesses as far as cost is “what is the overall cost environment in Memphis/Shelby for business operations?” The answer is a very low cost business operating environment making Morrison’s concerns tell only part of the story. Her concerns are similar to a low-cost automobile (overall business costs) with expensive rims (high property tax rate). In this way, overall transportation costs are low as with overall Memphis/Shelby business operations cost in Memphis while conceding more expensive cost components. This reality of a low business cost environment should further raise concerns of excessive tax incentives in an already low-cost business operating environment. The fact is that Memphis/Shelby has been spending excessive amounts on a problem that it does not have in high business operations cost.

Moreover, an increased property tax rate is likely needed to make Memphis a more attractive business investment destination while bridging the gap for excessive tax incentives of the past. Given this, the below table reveals the increased amount of costs that would need to be absorbed or passed on to commercial real estate tenants with a 5% and 10% increase in the property tax rate on an annual basis. The below table assumes 25% of overall appraised property value is personal property depreciated to 50% of its original value. Also, below is a residential analysis.

Under the property tax increases above, annual business facility cost would increase by .12% for a 5% property rate tax increase and .24% for a 10% increase.  A 5 % property tax increase would raise approximately $50M and a 10% property tax rate increase $100M.

Conclusion – Simply Bust It Out

It’s simple. Shelby County Mayor Lee Harris should bust out PILOT reform and a 10% property tax increase while welcoming specific counter proposals in tax utility fees (TUFs) and proposals from the Chamber to fund needed community improvements to attract business investment. The advantage of a property tax increase is that it is something everyone understands while providing a real solution. At the same time, a specific proposal such as a property tax increase puts other entities on the hook to define and provide specific counter funding proposals.

It would be especially helpful, if the local business community would agree to support a property tax increase and PILOT reform to bridge the tax growth revenue gap brought on by excessive tax abatements, the botching of the workforce development system and subsequent below average slow total wage growth.

With the combination of new funding proposals, PILOT reform and economic and workforce development implementation that leverage community assets, Memphis can optimize economic development efforts and achieve better outcomes for the community as a whole.

Good intentions pave the way for Memphis imbalances. The FedEx/Memphis Tomorrow corporate community leadership complex, who has good intentions, is much like a basketball team that intends to win but adopts poor practice habits.

The FedEx/Memphis Tomorrow undertakes many of the right things like golf tournaments to promote the city for business development, small business plan contests, articulating “workforce development is the #1 priority” and “free market” rhetoric and on and on. But culturally, over the last 20 years, in practice, the complex effectively stifles thoughtful dissent, connected workforce development, economic measurement and small business while forcing folks into poverty or out of town.

The ‘trickle down” policy stack promoted by the complex in excessive corporate incentives and unmeasured economic development work, is enough to challenge any city’s economic development efforts. That is why it was so alarming and confirming for this blog that the bully hack FedEx/Memphis Tomorrow complex has no intentions of being accountable through measurement when the University of Memphis abandoned their peer city measurement platform in their The Memphis Economy project. This occurring under the U of M FedEx/Memphis Tomorrow Board of Trustees while leaving the taxpayer in a rhetorical bubble.

While good intentions prevail, inadequate measurement leaves costly economic development efforts without direction or accountability and a community in need holding the bag.

Reconciliation

This blog, initially, was slow to criticize FedEx, thinking that the exhibited Memphis corporate community leadership could not be coming from FedEx. But reconciling the past 2 years of FedEx in the Memphis corporate community leadership space has significantly shifted that position.

First FedEx, along with corporate America, gets a huge Federal tax cut. Then FedEx runs back to Memphis, continues it’s botching of the workforce development system along with Memphis Tomorrow and grabs $35M in tax incentives for downtown. Then runs to Nashville to collect another $10M incentive for downtown and an additional $21M for the hub automation project. With only 340 new FedEx jobs promised, that’s $66M in tax incentives on the heels of a huge corporate tax cut garnered in one of the lowest business cost centers in the country in Memphis !

Is anyone putting this together ? That’s $194K per new job in tax incentives. What in the hell is going on here ???

The State says $21M are for jobs. Sure, there are new jobs in temporary construction jobs but with hub automaton coming there is no way there is going to be an increase in hub jobs. It would seem with a $21M tax abatement, the state could say something about a projected payback period for taxpayers if there is one. And its not like Memphis is not already over invested in transportation, distribution and logistics as well as corporations through excessive incentives as the true drivers in economic development in small business and workforce development are pushed aside.

The Beacon Center of Tennessee, just wrote recently about a troubling trend of anti-entrepreneurial career treks being undertaken by Millennials provoked through heavy college debt burdens and excessive corporate welfare. These realities drain the system of resources to support small business which is the primary driver local economies.

Outside Thinking

If one has worked in other communities outside of Memphis, one can see the botching of the Memphis economic development system from the top, where feeding on a community in need has become common place where no one seems to know anything else. That is what seems to have happened with Smith and Nephew, who must know that societal imbalances are not good for corporate commerce.

S&N, who is under new leadership from outside of Memphis, has recently walked away from an estimated $10M in incentives choosing to invest locally and be a good neighbor. The move has received little press coverage but could be a game changer for a community desperately in need of new more forward innovative thinking in the corporate community leadership space. So there is hope with new corporate thinking locally with S&N.

Conclusion

If local Memphis policy and implementation were optimized today, it would take Memphis 10 years to recover back to mediocrity from the last 8 years of FedEx/Memphis Tomorrow visionary trickle down. Get out of the bubble folks !

With good intentions, it looks to be more of the same with the FedEx/Memphis Tomorrow complex. It’s a complex, insulated in a bubble, that concentrates influence and wealth in the same few hands in a rigged system wondering why Memphis does not grow. Its fairly obvious why Memphis doesn’t grow if one has spent much time outside the city and sees Memphis botched from the top stagnated in a rigged social construct of the 1940s…..

A RESOLUTION BY MEMPHIS RAISE YOUR EXPECTATIONS (MRYE) TO FORMALLY RECOGNIZE THE CORPORATE COMMUNITY LEADERSHIP OF SMITH & NEPHEW USA

WHEREAS, in the current economic development environment, the area’s leading manufacturer in Smith & Nephew USA could have played the game, threatened to leave and likely been the beneficiary of $10M in Memphis & Shelby County tax incentives; and

WHEREAS, Smith & Nephew USA, who is already operating in a quality low-cost business environment in Memphis must have concluded that thankfully they are going nowhere and chose not to play the game while choosing to invest in Whitehaven; and

WHEREAS, Smith & Nephew USA’s local cost benefit analysis must have concluded that being a “good neighbor” that paid their taxes was in the interest of its shareholders; and

WHEREAS, More visionary corporate community leadership as exhibited by Smith & Nephew USA is needed in Memphis to serve the interests of corporations, small business and the community as a whole; and

WHEREAS, Smith & Nephew USA’s local corporate community leadership has gone for the most part unrecognized while it has the potential to be a game changer in the area of local Memphis and Shelby County economic development.

NOW, THEREFORE BE IT RESOLVED, that MRYE formally recognizes Smith & Nephew USA for its outstanding corporate community leadership in Memphis and Shelby County as a good neighbor.

Can Memphis grow in a bubble while its people are disconnected from reality in a global economy ? No Way !  Institutions across the board continue to fail Memphis/Shelby taxpayers. The press, university community and legislators on the left and the right refuse to confront the indefensible products of the FedEx/Memphis Tomorrow complex. So how does a community improve without needed checks in the system ? It doesn’t; it stagnates into a rigged condition.

That’s what has happened to Memphis after 20 years under the backwards and visionless FedEx/Memphis Tomorrow bully hack complex. The only checks on real power are coming external of Memphis institutions such as ProPublica, Beacon Center of Tennessee and from blogs such as this one.

Example checks on real power made by non-traditional media outlets include: Methodist Hospital, botched from the top workforce development system, bogus EDGE projection accounting, excessive EDGE abatement awards, deficient economic development growth as expressed through credible measurement and EDGE apparent misuse of Depot proceeds. The cost to taxpayers uncovered soars into the billions.

Without the above, the community is left blind in a rigged stagnant condition without the information to inform needed improvement, growth and evolution in a global economy.

See the Excess in PILOTs ?

One example of this type of information regarding excessive PILOTs is below. Memphis/Shelby taxpayers are not going to see information such as this anywhere else. This blog, whose rhetoric has been questioned states that the FedEx/Memphis Tomorrow complex feeds on a community in need. How else would one describe the information below where the five PILOT projects of existing companies in Nike, International Paper, Technicolor, FedEx and Valero that total $207M exceed the total job PILOTs each for Nashville and Indianapolis?

This is what happens when an elitist system is designed and incented to award large corporate abatements for the benefit of the small few in an already low cost business environment with Memphis ranking 13 out of 100 metroes. This is not economic development; its economic devolution and community disinvestment. See below table:

At the same time the proposed PILOT reform solution of this blog, would have still awarded the 5 above companies PILOTs based on their new capital investment and jobs, just not $207M. And that’s even though most of the companies are in reality going nowhere like Valero. The applied formula is 50% of new capital investment and 1% abatement on total wages for new jobs.

As for overall implementation, existing companies would likely get less than a 50% abatements to compensate for larger abatement packages exceeding 50% for new industry recruitment and operational relocation costs. In the end, the proposed system is designed to award 50% overall for new capital investment while maintaining EDGE investment and term requirements. The 1% abatement for new jobs would apply for new and existing companies.

To that extent, for example purposes only, 50% abatement amount was applied to show revised abatement amounts using the proposed reform model for existing companies mentioned above:

Conclusion

Memphis can’t grow in a bubble while listening to FedEx/Memphis Tomorrow propaganda. Legislators know that tax incentives are beyond excessive and that EDGE appears to have engaged in the misuse of $1.7M Depot funds. Legislators would be best served to send the FedEx/Memphis Tomorrow complex a $500M invoice payable immediately while getting to work and when needed engaging a new brand of corporate community leaders.

FedEx/Memphis Tomorrow lacks the capacity and vision to propel Memphis forward. Their vision has been realized over 20 years and it’s a Memphis community left behind in a global economy with massive imbalances. So sad as it was authored from the top of the Memphis ecosystem. Tuff n Cool Man, Tuff n Cool to feed on a community in need……

A beacon of hope has emerged locally in Smith and Nephew (S&N). S&N, the area’s largest manufacturer is investing millions and adding jobs without a tax incentive. Its big news in the practice of corporate community leadership away from the valueless FedEx/Memphis Tomorrow complex that has helped author an excessive corporate/real estate tax incentive policy environment on the back of a community in need.

But unfortunately, S&N’s leadership is not being trumpeted. In Mayor’s Strickland’s Facebook post on the story in the Daily Memphian, he did not mention S&N’s capital investment and new jobs without a PILOT. This is huge corporate leadership news. But since the Memphis culture is addicted to excessive tax incentives, trumpeting such a positive disruption may be off putting to the corporate culture.

In the Daily Memphian article, Kenneth Bly of S&N said, “We want to be a good neighbor. That includes showing up and setting a standard that maybe others follow. I don’t know that we were doing that. It’s about inspiring and retaining talent.” Memphis needs a new standard in corporate community leadership because there are no standards with the valueless FedEx/Memphis Tomorrow complex.

Somehow S&N conducted a cost/benefit analysis and concluded that its better to go without incentives in the heavily incentive burdened Memphis and Shelby County. Its not hard to get there. S&N is already operating in one of the lowest cost centers in the country and their problem is not lower costs but a need for a career ready workforce. As a “good neighbor” S&N must know that workforce development efforts have been seriously compromised by deficient corporate community leadership and excessive tax incentives.

S&N provides a needed beacon of hope with a new form of corporate community leadership. This is vital because the local insiders of the FedEx/Memphis Tomorrow complex just don’t have the value set to change the trajectory of the community as they have culturally invested the community in decline.

Lacking Legislative Oversight and Analysis

Legislative oversight does not occur in Memphis while surrendering to the bully hacks of the FedEx/Memphis Tomorrow complex. There is no vitality on the matter of excessive incentives as legislators seem robotically controlled by the bully hacks. This is a feature of a rigged system in lost growth vitality on matters of importance.  And if that is not enough, Memphians are in the dark, while as part of a rigged system, the press and public institutions like the University of Memphis do not inform the public of the excesses of the corporate socialists.

In the current environment, this blog has proposed a practical non idealistic PILOT reform solution. The PILOT reform model would maintain EDGE’s current investment and term minimums while abating a net 50% for new capital investment provided current job levels are maintained and abating 1% on total wages paid for new jobs. The proposed solution would have reduced historic job tax incentives by some $200M+ from 2011-18.

As for implementation it is a net 50% abatement being proposed. In this way, local companies that currently reside in Memphis would likely get less than 50% abatements and relocating companies, undertaking extensive relocation costs might get more than 50% abatements.

Unfortunately, the bully hack corporate socialists have convinced the public that because of high tax rates and their own botching of the workforce development system that massive corporate/real estate incentives are in order. This is not true as Memphis has one of the lowest business costs operations centers in the country. The fact is that Memphis has high property tax rates but not high property taxes due to low property values while at the same time providing a low cost business operating environment.

Based on the table below, if the proposed solution were idealistic and not practical, it would move to reduce abatements by some $400M and not $200M bringing them in line with $2.5K per job in Nashville and Indianapolis. To that extent, the below macroeconomic analysis is simple as it shows a massive data dislocation and Memphis abatement excesses.  Nashville and Indianapolis are paying approximately $2.5K per new employed job and Memphis $14.5K !

Applying the proposed practical PILOT reform solution to historical abatements, Memphis, with $300M in total abatements down from $500M, would still have paid well in excess of the $2.5K in Nashville and Indianapolis and paid $8.7K per new employed job.

See below table for current Memphis abatement excesses which accomodates a simple analytical platform for local legislators:

Conclusion

Memphis has a sick elitist corporate community leadership culture where its Tuff n Cool Man to feed on a community in need. So sick that true corporate leadership as exhibited by Smith and Nephew is for the most part squelched as it threatens the decline by design culture of the corporate socialist FedEx/Memphis Tomorrow bully hacks.

As exhibited for the last 20 years, the elitist FedEx/Memphis Tomorrow culture does not have it within them to change the trajectory of the City. Its so sad as everyone bought in and believed only to be robbed of progress and to have their community left behind in a global economy as the bully hacks fed on a community in need at a $500M cost to taxpayers from slow growth and excessive incentives. With the bully hacks, its Tuff n Cool Man, Tuff n Cool to feed on a community in need.

There is good news. There are local business leaders who do not believe in the use of incentives at all or at the very least reject excessive incentives. But they are scared to speak up as they feel threatened by the sick corporate socialist culture of the bully hacks. Hopefully, these voices will find ways to speak up with Smith and Nephew. Because without them, Memphis is left to more decline with the bully hacks of the FedEx/Memphis Tomorrow complex.

Please let me know if you need references by emailing me at jkent@pathtrek.net

EDGE is now shelling out $1.7M to their own special projects and beneficiaries using funding that should come back to the taxpayers for appropriation. But, whether legislative bodies will take up the concern is an open question in the valueless FedEx/Memphis Tomorrow decline by design complex, where its “tough and cool man to rip off a community in need” under the heading of “economic development”.

Per the EDGE website, established in 1997, the purpose and scope of the Depot Redevelopment Corporation of Memphis and Shelby County is to acquire and redevelop the former Memphis Defense Depot with approximately 4.25 million square feet of space.

As the Depot disposes of its property assets and closes out, that money should come back to taxpayers for appropriation. Instead of coming back to taxpayers, EDGE budgeted $1.7M in Depot funds per the EDGE 6/20/18 minutes on page 27 as contained in footnote 5 for the following pet projects and interests:

5 Based on the Service Agreement between EDGE and the Depot Redevelopment Corp [DRC]., EDGE also approves the following DRC funding during FY 2019:(1) a $900,000.00 grant to the Greater Memphis Alliance for a Competitive Workforce (GMACWorkforce) for operating expenses related to workforce development efforts; (2) $200,000 to help Improve rail service to industrial customers on Presidents Island through a new intermediary service provider; and (3)$600,000 total in grants to the Arlington, Bartlett, Collierville, Germantown;Lakeland and Millington Chambers of Commerce for local economic development initiatives. A Committee created by the EDGE/DRC Chairman will allocate funds to the individual chambers and approve disbursement of all funds. FY 2018 proposed projects will be evaluated and funded during FY 2019, along with the FY 2019 projects.

Analysis

First, its easy to see how Councilman Jones, Commissioner Brooks or even the EDGE Board itself would have missed the out of scope appropriations from Depot proceeds as they are buried deep in the footnotes of the budget document. But now, legislative bodies know about it. Legislative bodies should move to recover their respective proportions of the $1.7M for the taxpayers with leadership from Council Chair Kemp Conrad, Council Budget Chair Martavius Jones, Council EDGE Liason Worth Morgan, Commission Chair Van Turner, Commission Economic Development Chair Willie Brooks and Commission Budget Chair Eddie Jones.

It may be just a formality for re-appropriation just as EDGE budgeted the $1.7M, but at a minimum that should be done. At the same time, I cannot see legislative bodies allocating $900K to the Greater Memphis Alliance for Competitive Workforce (GMACW) who has not executed for taxpayers under deficient board leadership over 4 years and for a Board who as not met in over a year. And the municipal Chamber of Commerce appropriations would likely be reduced or taken back altogether. The $200K Presidents Island rail connection, would probably be reallocated as shown.

As far as the allocation of funds to GMACW and generally related to footnote 5 above, there never has been a committee set up by the EDGE/DRC Chairman, Al Bright. And besides, operating under the charge of the Depot, the Depot Board should be the Board that allocates the funding. Further, no public notice has been given for any Depot Board or committee votes on the allocation of budgeted funds as contained in footnote 5. At the same time, $834K  in funds were transferred from the Depot to GMACW in August of 2018.

The above activity suggests that EDGE Board members themselves were not comfortable being on the committee and voting for the allocation of funds that came from Depot proceeds for work outside the Depot scope of work. Nor, was there ever a vote by the Depot Board on the funding allocation found in footnote 5 and the Depot Board has not met since 6/20/18.

All of the above points to an allocation and distribution of funds without EDGE/DRC special committee or Depot Board approval. Reid Dulberger was especially concerned at the last EDGE Board meeting where the concern was brought up in public comment. Dulberger, spoke up out of order without Chair recognition, to shut down any potential discussion on the matter. And even with Depot Board and/or EDGE/DRC committee approval, the appropriation would be outside of the Depot scope of work where $1.7M should come back to the taxpayers.

Conclusion

In a FedEx/Memphis Tomorrow decline by design framework, legislative oversight does not occur. This works  to undermine true community and economic development work while making Memphis less attractive for external investment. Further, in this decline by design framework, local corporations and businesses are paying the price in various forms to include slower growth due to a workforce development system botched by Fred Smith and Pitt Hyde costing business and taxpayer millions. How business friendly is that? Remember, “Its tough and cool man to rip off a community in need”.

In the end, really, the only people that consistently win, is the seemingly ever expanding local tax abatement industry advocated for by the FedEx/Memphis Tomorrow complex. Again, its a design for decline where the corporate socialists will run themselves out of town while blaming taxpayer funded public entities for community decline.

EDGE often points to their authority as provided by state law but in the end local legislators have oversight and authority over EDGE. And if there is any potential for a legal standoff based on state law, local legislators have the leverage to mount that case, thereby bringing EDGE into compliance. To that extent, if local government needs to take EDGE to court for $1.7M, there is likely an additional opportunity to recover $800M based on EDGE’s use of a bogus accounting platform for 8 years that overestimated tax proceeds in order to justify excessive corporate/real estate incentives for the small few.

So how about some legislative oversight in a culture where its “tough and cool man to rip off a community in need”?

Fred Smith is an ecosystem hack and bully. The results are all over the place. Smith grew up during the rigged Crump era and is seemingly ignorant of anything else for Memphis. And what’s sad, this rigged condition perpetuates and is adopted throughout the Memphis culture. If it worked, it would show up in the data. But a rigged system won’t work in a global economy making Memphis closed for business.

Smith’s advocates claim that Smith is focused on Washington and China and he doesn’t have time to be concerned with what is going on in Memphis. But I don’t believe it. And why would that be true, when the FedEx corporate headquarters is based in Memphis ? Memphis has wholly adopted Smith’s mantra which is nothing more than the lies of archaic “trickle-down” thinking consisting of excessive corporate incentives for the small few.

Tough Guys – So Where’s the Proof ?

So without proof, terms like “bully”, “hack”, “closed for business” and “ignorant” are just name calling and empty rhetoric right? Well, let’s look at Smith’s and FedEx’s handy work to see if we can prove the rhetoric as fact:

While working with Memphis Tomorrow, Smith and FedEx completely botched the workforce development system while stifling small business costing taxpayers $30M per year and $150M since 2010 on the back of a stupid Canadian contract award

FedEx, as a $60B company, bludgeoned the Memphis/Shelby taxpayer and a community in need into a $31M tax break which can be shown to be $20M in excess for the new FedEx Downtown project while Memphis/Shelby serves as one of the lowest business cost operations centers in the country

In 2012, FedEx told Memphians that they were going to relocate a division out of Memphis if they were not awarded $14.6M tax abatement with no new jobs projected under the project while Memphis/Shelby serves as one of the lowest business cost operations centers in the country

Rigged for theater, the status quo and excessive corporate/real estate incentives, FedEx employees chaired the EDGE special oversight committees and nothing has changed. EDGE remains incented to continue to represent corporate/real estate interests and not the taxpayer while using bogus projection accounting to justify excessive corporate/real estate incentives which has been going on for 8 years.

FedEx along with Memphis Tomorrow companies took over the University of Memphis Board of Trustees neutering them into a state of institutional impotence on matters of investigative journalism and community economic development. Pitiful…..

Richard Smith, son of Fred Smith, is Chairman of the Greater Memphis Chamber of Commerce, an organization that won’t publish their bylaws, denies membership rights and kicks people out of the Chamber without cause. This email from Richard, apparently ignorant of anything else and learned behavior from his father, shows how he engages community dissent as Chairman of the Greater Memphis Chamber of Commerce while shutting people out further confirming the closed culture of Memphis under the Greater Memphis Chamber and FedEx. See Email Here . 

Under Richard Smith’s leadership, the Chamber has yet to publish an economic development plan or articulate a measurable definition for economic development in almost 2 years, while  the former has not existed for the last 8 years as corporate/real estate incentives roar and small business vitality plummets on the back of a community in need.

Stagnation under Fred Smith and FedEx

Additionally, another data source has been created to show cities that host only 1 of the top 50 public corporate revenue generators and their associated population growth rate. It is for sure that these public companies, with their dominant wealth in the community, have significant local clout in their communities. But somehow, companies find ways to allow their communities to grow while not botching the workforce development system, stifling small business growth and bullying the taxpayer. That’s because they are not hosting FedEx.

Its apparent, based on the data, that Fred Smith’s and FedEx’s bully approach has bludgeoned the Memphis community into a state of stagnancy. See below host cities, where the average population growth rate is 7.1% compared to Shelby County’s of .91%. Its also clear that the lower cost South showed the highest growth rates except for Memphis/Shelby based on this data listing.

Conclusion

When I returned to Memphis, I never thought that I would be confronting Fred Smith and Pitt Hyde. Never ! But having worked in other communities across the country and seeing here in Memphis the complete bully recklessness of an unchecked and unmeasured corporate community leadership complex, I had no choice but the speak up as witness.I have witnessed a Memphis community in need being consistently violated under the label of “economic development” by a bully and hack like Fred Smith and his Memphis Tomorrow friends.

From the top of the ecosystem, Memphis/Shelby taxpayers are dealing with, in my view, a punk mentality that feeds on a community in need. Under a rigged Fred Smith ecosystem, thoughtful dissent and creativity are shut out, people are forced into poverty, small business is stifled and people are run out town while excessive corporate/real estate incentives roar. Its all Fred Smith knows. And its not in the interest of the business community while making Memphis less attractive for business investment resulting in deficient total wage growth.

The currency in Memphis is hack worship within a closed  and rigged decline by design framework that won’t work in a global economy. Buying in, requires belief in a rigged system and decline that will never work. All of this occurs while costing taxpayers, since 2010, $500M and promising a better tomorrow for all. Fred Smith is an embarrassment to the term “corporate community leadership” while just ignorantly perpetuating all that he knows. So sad…..