An argument can be made for a 8 yr PILOT for Raymond James (RJ) that creates 100 new jobs at $63K and $23M in new capital investment while consolidating operations.

But it must be said, there are no real standards for EDGE PILOTs. Over the weekend there was chatter across social media on pros and cons approving the RJ PILOT. For instance, Tom Jones of Smart City seems to impose the original “but for” requirement for tax incentives which is what it should be !  The “but for” requirement is that “but for” the incentive, the “economic development” project would not occur. Considering “but for”, RJ is likely not going anywhere else making the incentive unnecessary.

At the same time, in practice, “but for” was abandoned pretty much when EDGE was created with the Valero project. Valero practically can’t go anywhere else. Which brings us to the reality that, in practice, “but for” has been  gone as has been reliable projection accounting, for 8 years, while excessive abatements proliferate. The existence of bogus inflated projection accounting has been used to justify excessive corporate/real estate abatements for the benefit of the small few while creating the need for the more accurate Tax Incentive Fiscal Note Impact (TIFNI) tool.

When TIFNI is used on RJ, TIFNI finds a $480K net benefit for taxpayers. This differs greatly than the $2.6M benefit EDGE claims pointing to the need for TIFNI fiscal impact analysis in addition to economic impact analysis. Economic impact analysis alone results in incomplete project accounting. At the same time, when applying TIFNI, of some 95 PILOTs, RJ exceeds the fiscal benefit of some 56 of 95 EDGE Board approved job PILOTs.

So while the return on the RJ project is only 2%, it exceeds the performance of 56 of 95 PILOTs. This data point validates one of the causes of unmet community needs and flat tax revenues due to excessive incentives. A reduction in the RJ PILOT percentage from the standard 75% would yield a greater return on investment for the taxpayer and should be considered.

Conclusion

PILOT reform is long overdue in Memphis where bogus projection accounting has resulted in $500M+ in job incentives compared to $135M in Indianapolis that had greater percentage job growth. Ideally, PILOT reform would include the enforcement of “but for”, fiscal impact analysis and a policy that would right size abatements with 50% on new capital investment provided current job levels are maintained, 1% abatement on total wages of new direct jobs only while maintaining EDGE investment and term minimums.

The only standard there seems to be for an EDGE job PILOT is available vacant space in need of a commercial tenant. At which point, the EDGE Board, if necessary will abate existing taxes to allow a prospective tenant to reach EDGE capital investment minimums that credit the value of existing vacant property as community investment while abating existing taxes. The former is a taxpayer nightmare and would be addressed under the above PILOT reform with the implementation of fiscal impact analysis and TIFNI.

Memphis supports a pageantry of establishment horror. Just yesterday, Benjamin Orgel, Carol Coletta and Gary Prosterman celebrated real estate development as economic development. And soon, another group of establishment players, that botched the workforce development system on the back of a foreign contract award, will celebrate themselves in a pageantry UpSkill901 event featuring the Brookings Institute. Brookings co-authored the last design for decline economic development plan along with Christine Richards, at the time, Chief Counsel of FedEx.

Real estate development as economic development has resulted in excessive corporate/real estate incentives, a botched workforce development system, stifled small business sector, neighborhood decline, people having to hitchhike to work due to deficient public transit and increasing poverty rates. And those at the state level, with some distance from the horror, in for example Gwyn Fisher and Mark White that could perhaps provide a level of state intervention, are inaccessible. They only know decline for Memphis and are comfy with an establishment that has led ecosystem decline over 20 years.

Governor Bill Lee must have no idea that he is participating in a pageantry of horror by appointing Richards to the Public Charter School Commission. He’s just knowingly or unknowingly furthering elitist SPOONERGATE and the nationally embarrassing FedEx/Memphis Tomorrow complex that has led Memphis decline for 20 yrs.

An Activist 2015 Public UofM Sounds The Alarm

The horror of real estate development as economic development, has not come without warning. About the same time that I began to scratch my head, an activist University of Memphis Planning Department, in 2015, sounded the alarm through a report that seems to indicate they were scratching their head as well.

The report first defines economic development as  “an increase in the economic well-being of area residents, usually manifested by positive changes in the level and distribution of area employment and per capita income.” Then the report connects the dots to communicate what economic development means in Memphis based on local practice. The report concludes that economic development in Memphis based on local practice is defined as “real estate development, consumer-oriented development, large publicly funded projects, and tax breaks”.

The report goes on to question the conflict of FedEx and Christine Richards being so prominent in economic development efforts based on the need to diversify away from the logistics industry and a plan that contained no deliverables or timelines while questioning local workforce development efforts.  It must be noted, in the past year, that FedEx has been the recipient of some $66M in state and local incentives while only promising 339 new jobs. And to make matters worse, the incentives were awarded without an economic impact study.

Not long after the former activist UofM Planning Department raised concerns, I raised concerns with Richards directly concerning local workforce development efforts. My current approach to questioning local economic workforce development efforts often gets questioned. But as one can see, my approach has not always been rhetorically laced but in fact professional as can be seen in this email to Richards in 2016.

Richards is part of an elitist establishment pageantry of horror in the FedEx/Memphis Tomorrow complex. A nightmare community and economic development scenario where local residents are trapped in a rigged system of decline with the support of state and local officials where elitist feel entitled to feed on a community in need while ripping off the taxpayer, small business and botching the workforce development system.

Rigged System and No Course Correction

The Memphis system does not afford data driven course correction. This comes with the support of a non-investigative press and elected officials that are comfy with establishment supported decline. I have spoke briefly to Representative Mark White in passing and he is always nice. But he is unwilling to do formal data supported intake on the nightmare of the FedEx/Memphis Tomorrow complex as is Gwyn Fisher who is the Memphis representative of the Tennessee Economic and Community Development department.

Local officials are completely comfortable with decline as excessive incentives have roared without fiscal impact analysis over 8 years and floundering workforce development initiatives have gone uninvestigated over the last 4 years. The lack of state level intake systems and rigged local government institutionalize Memphis decline. And the new UofM under the new FedEx/Memphis Tomorrow Board of Trustees is no longer an activist public university where objective economic development measurement has been curtailed and bogus economic outlook studies are published.

Conclusion and Solutions

This blog has documented bogus projection accounting for tax incentives resulting in excessive incentives, establishment led botched workforce development efforts and as of late EDGE misusing $1.7M in EDGE/Depot funds that should come back to the taxpayer. But those events, regardless of how well documented, go ignored by the local press and governmental officials. This provides a foundation for systemic decline without course correction as the same establishment players run the city into the ground.

The solutions are simple and NOT complex and include press and legislative oversight, systems of state level intake, objective measurement and fiscal impact analysis of tax incentives that has not occurred in 8 years. Without the former, the economic and community development nightmare and pageantry of horror of the elitist FedEx/Memphis Tomorrow complex will only continue while furthering ecosystem decline.

Get a handle on tax incentives. Catch an Angle with TIFNI !

Fiscal note for every tax incentive

Consolidated web based database for all tax incentives in centralized location

Calculate economic development portfolio tax incentive return on investment 

Improve budget forecasting when considering fiscal impact of longer term incentives

Funding Source: $1.7M in EDGE/Depot Funds returned to the taxpayer

SAMPLE

Contact us Today !

901-574-4753 or jkent@pathtrek.net

From: Joe B. Kent <jkent@pathtrek.net>

Sent: Wednesday, June 15, 2016 3:17 PM

To: cprichards@fedex.com

Subject: Sense of Urgency

Ms. Richards,

I would like to meet with you in your role as a GMACW Board Member to discuss the local workforce development effort. I am not interested in meeting with GMACW staff at this time. I have been following the GMACW implementation very closely and feel as if I can add value by providing a specific plan and doing the following: 1) help raise money for youth development 2) provide technical assistance and 3) add a sense of urgency to the effort. From here in Memphis and a graduate of the University of Memphis, I have a Bachelors in Business Administration (Finance Major), Masters of Science in Curriculum, Instruction and Technology and hold a Global Career Development Facilitator Certification where I focused my work on Labor Market Information and Supply and Demand Analysis. My LinkedIn Profile is a follows: https://www.linkedin.com/in/jbkent

Having said that, while attempting to consider the job market here in Memphis, I enrolled in MemphisWorks at http://memphisworks.com .  Well, MemphisWorks is Not Working as shown in the below email.  I read the Terms Agreement and it makes reference to “province” instead of “state”. Since Memphis is here in the United States, I thought that I should bring that to someone’s attention. Secondly, I thought you might find this somewhat interesting, later in the document, it states the following “ These Terms and Conditions are governed by, and to be construed and interpreted in accordance with, the laws of the Province of Ontario and the laws of Canada applicable in that Province. Any action taken in connection with the operation and content of the Site, or these Terms and Conditions, must be brought in a court of competent jurisdiction located in Toronto, Ontario, Canada.

Also below and while using the American Public Data System,  I am making a $15,000 in kind contribution to the effort by providing a first pass Memphis Workforce Trends Report. I am tired of seeing my hometown stumble around without a coherent compilation of labor market information 18 months into the project as they grapple with the important topic of workforce and economic development. If you see something that’s not right in the data, please let me know and allow me the opportunity to defend or correct the data. In this way we are at least talking about the data which serves as a way to advance the local effort. At the end of the report, there are 2 Supply and Demand Reports. 1 report is for Job Zone 3 Associates Degrees and above. The other report is for Job Zone 2 or High School Only. Please see below and let me know when we can meet.

Thank you in advance for your consideration and I look forward to hearing back from you.

MemphisWorks Agreement – https://1drv.ms/b/s!AiNXRWm6KZQi3Q34w2R7YK9bZb-9

Memphis Workforce Trend Report – https://1drv.ms/b/s!AiNXRWm6KZQi3RCq4kJ5GrHYyak1

From: Memphisworks [mailto:info@workbay.net] Sent: Tuesday, June 14, 2016 4:25 PM To: jkent@pathtrek.net Subject: Welcome to Memphis Works!

Currently, a massive public accountability process hole exists that prevents informed budget forecasting and evaluation of economic development incentives through more accurate measurement. A centralized web based fiscal impact tool and note generator would provide a solution for improving budget forecasting and return on investment evaluation regarding economic development incentives.

Additionally, the County Trustee’s office has repeatedly called for a centralized integrated database for all incentives from multiple abating boards in their annual report . This convergent need should be leveraged to develop a central repository for tax incentive fiscal notes and impact analysis. The work could be funded with $1.7M in misused EDGE/Depot funds coming online. There could not be a more relevant, needed, appropriate and course correcting investment when it comes to $1.7M in misused EDGE/Depot funds than a tax incentive fiscal impact tool.

Keep in mind, there was a time in Memphis, prior to Memphis Tomorrow, when local small business could propose an innovative solution to a community problem and local leaders would go to work to bring it to market. Yours truly, in the mid 90s, proposed and erected the first web based Shelby County Assessor’s property database.

That was then. Now the FedEx/Memphis Tomorrow complex is busy ripping off local small business ideas and shipping them off to out of town companies like Burning Glass and Talent Pipeline Management so that the workforce development system can be botched over 5 years. That’s what happened with my connected workforce development solution which is the same thing that Burning Glass out of Boston and the like are bringing to market 5 years late in Memphis after the FedEx/Memphis Tomorrow complex dismissed local small business solutions.

The way the FedEx/Memphis Tomorrow complex rips off small business is not overt. What they do, is they try to starve out small business and once they are starved out, the solution reappears somewhere else. For my part, a local research project was launched at the same time I attempted to get my connected workforce development solution to market. Part of my research was to see if they would rip my solution off and yep the hack complex ripped it off which is why Memphis struggles with small business in a closed elitist SPOONERGATE system.

As a typically broke local small Memphis business, this brings me to my latest solution, which is the “Memphis/Shelby Tax Incentive Fiscal Note / Impact Repository (TIFNI).

The Solution

With the Trustee’s office on public record stating the need for a centralized incentive database and Mayor Harris saying a fiscal note for every abatement is a “great idea !” in a meeting on 10/2/19, the Memphis/Shelby Tax Incentive Fiscal Note / Impact Repository should be a slam dunk. And funding should not be an issue with $1.7M in EDGE/Depot funds coming on line.

Further, it would seem the Epicenter would want to get behind bringing local small business solutions to market to solve community problems. And the UofM Fogleman College of Business, under Dr. Damon Fleming, has all types of small business development work underway and a need for accurate local economic development measurement.

Here are the benefits of Memphis/Shelby TIFNI delivered through web based technology:

• Provides return on investment analysis of tax incentives with a fiscal note generated for every tax incentive
• Provides local government, through both economic and fiscal impact analysis with a more reliable methodology for budget forecasting
• Provides a centralized repository for tax incentive information

The availability of such information stands to curtail excessive incentives while informing optimal public economic development investments and more accurate budget forecasting.

Conclusion

The need for Memphis/Shelby TIFNI has been unaddressed for 8 years. With $1.7M of EDGE/Depot funding coming online and existing local small business solutions proposed to solve the outstanding need, there could not be a better time to get started.

New data intake processes are needed by State of Tennessee officials to accommodate citizens that puke at the mention of Fred Smith, Pitt Hyde and Christine Richards. This dissent at least needs to be formally heard. Governor Lee will fail in his Memphis turnaround efforts if he can’t accept the basic fact that the FedEx/Memphis Tomorrow complex is a national embarrassment. The complex has resulted in the product of SPOONERGATE and implementation ecosystem decline over 20 yrs that accommodates elitists feeding on a community in need. Here are a few evidence snapshots of elitist led ecosystem decline:

1. City cuts off retirement benefits for public employees
2. Botched workforce development efforts
3.  Increasing poverty levels
4.  Excessive corporate/real estate incentives justified with bogus projection accounting for the benefit of the small few while achieving far below average wage growth

But Lee continues to appoint FedEx/Memphis Tomorrow rigged system bureaucrats in for example Christine Richards on the Tennessee Public Charter School Commission. Why such a nightmare decision that is nothing other than more of the status quo?

Richards, formerly Chief Counsel at FedEx, was core to the last design for decline 2014 economic development plan in Memphis and subsequently a key contributor in the botching of the Memphis workforce development system while serving on the first Greater Memphis Alliance for a Competitive Workforce (GMACW) Board. An early warning concern of Richard’s involvement came from the University of Memphis Planning Department in 2015 and cited conflict of interests concerns regarding Richards related to the local economic development need to diversify away from the logistics industry.

The UofM report goes on to articulate plan concerns around a lack of specific timelines, measurable deliverables and GMACW workforce development efforts in 2015. The report was published prior to the new UofM Board of Trustees when the University seems to have been more free to raise concerns regarding the local establishment while exercising communitywide thought leadership.

Here is an email that I sent to Richards regarding deficient workforce development efforts in 2016. The email was dismissed and today, in 2019, deficient workforce development efforts remain with no plan or data to support connected career pathways development efforts. Its a closed elitist system that feels entitled to dismiss taxpayer concerns regarding publicly funded work. And, Fred Smith and Pitt Hyde have been entirely content with Memphis ecosystem decline provided that their FedEx/Memphis Tomorrow machinery can botch ecosystem evolution at will while feeding on a community in need using taxpayer funds. Its been going on for 20 years.

Following the lead of Smith and Hyde, consequently, locally based state officials are invested in elitist decline as well. Its all they know for Memphis. Representative Mark White and Memphis area Tennessee Economic and Community Development Director Gwyn Fisher, routinely entertain meetings with the embarrassing FedEx/Memphis Tomorrow complex but won’t meet with non-establishment organizations. So there is no real help from the state in questioning the elitist monopoly and Memphis ecosystem decline. There are a number of solutions, but White and Fisher are not open to hearing them.

As a result, White and Fisher support an elitist system of decline that rips off small business, uses bogus accounting to justify excessive corporate/real estate incentives while botching the workforce development system over 5 years. The excessive incentive mentality is evident in the data where Memphis has $500M+ in job incentives and Indianapolis has $135M with greater percentage job growth than Memphis. In this way, its not about economic development but elitist bullying and feeding on a community in need that has continued, without critical measurement, under Richard Smith as Chamber Board Chair. And then there is re-elected Mayor Jim Strickland.

Rigged System Furthered

Re-elected Mayor Jim Strickland only knows decline over the last 20yrs. He is unalarmed with business as usual decline under the FedEx/Memphis Tomorrow complex. During Strickland’s first term the workforce development system was botched as excessive corporate/real estate incentives roared for the benefit of the small few. Strickland might as well change the city logo to that of a silver spoon.

Excessive incentives in Memphis have roared over 8 years without any fiscal impact analysis, an alarming unreported fact. Those excessive incentives are a primary reason for a lack of transit funding and neighborhood decline. The EDGE incentive scam was launched soon after the great recession and contains glaring similarities to that Wall Street scam in bogus assumptions used in economic impact studies and  projection accounting that underwrites excessive incentives for the benefit of the small few.

Fiscal impact analysis of incentives is fundamental to measuring the effectiveness of economic development efforts and budget forecasting. But fiscal impact analysis does not happen in Memphis regarding some $800M+ in corporate/real estate incentive awards. This is a design for decline. And the former occurs, as control of  workforce development efforts circulates back to the where they were originally botched at the Chamber. Its a social construct in Memphis that demands loyalty to ecosystem decline under Fred Smith and Pitt Hyde. All in all, its a closed system that is not good for business and why Memphis hasn’t grown in 20 years with the same rigged system of players directing ecosystem decline.

Conclusion

The only plan in Memphis is a rigged closed system that consists of the same players, no real measurement, legislative or press oversight while feeding on a community in need. A real measurable economic development plan still does not exist after almost 2 years under Richard Smith’s Board leadership at the Chamber. There is no sense of urgency under the FedEx/Memphis Tomorrow entitled spooner complex. Its just a closed social construct that furthers Memphis ecosystem decline.

State solutions to resolve the problem could include an intake process to formally accommodate non-establishment viewpoints but it looks to be more of the same under Lee. Good luck to Governor Lee in listening to the nationally embarrassing FedEx/Memphis Tomorrow complex who has authored Memphis decline over 20 years.

SPOONERGATE is about a closed, silver spoon elitist system that while using taxpayer money has strangely engaged in design for Memphis ecosystem decline. The most notable trait of this process is the lack of course correction amidst failed workforce development implementation and foreign contract awards all while excessive corporate/real estate incentives roar for the benefit of the small few. The rumor is the State is taking a close look at intervention. If this is the case, the State needs to know what they are dealing with in a closed rigged cycle of influence. Rigged doesn’t grow. Fred Smith missed this in his history studies.

Memphis corporate community leadership feels entitled, in a closed system, to rig the system for the same few while expecting to grow. Deficient workforce development efforts, over the last 5 years in Memphis are estimated to have cost Memphis/Shelby taxpayers $1B in wages and $30M in tax revenue. Further, taxpayer funded workforce development under Fred Smith and Pitt Hyde began about five years ago, starting out as a Chamber Chairman’s Circle iniitaive, then going to EDGE and now back to the Chamber.

Interestingly the failed efforts are circulating between the same famillies and inidividuals in a rigged Memphis cycle. First Willie Gregory headed reform efforts under the Chairman’s Circle, then the Greater Memphis Alliance of  Competitive Workforce (GMACW) was handed off to EDGE and Jack Moore of the Wilson family after the Canadian contract failed.

Now workforce is making its way back to the Chamber with Richard Smith, Board Chairman and Spence Wilson, Jr. over the Chairman’s Circle. And now, Willie Gregory appears to be positioned to perhaps be the new Chamber Board Chair. Its a rigged system cycle and SPOONERGATE in all of its glory.

Below a list of events that reveal a closed rigged system bent on a lack of course correction and ecosystem decline. After all, it’s what they know under the FedEx/Memphis Tomorrow system. Having worked in communities, across the country, I have never seen anything this deficient and rigged. Its so offensive.

RIGGED SYSTEM AND ECOSYSTEM DECLINE

2015

Chamber Chairman’s Circle initiative in GMACW misses all State of TN LEAP Grant Deadlines

2016

The below events occurred as corporate/real estate incentives roar using EDGE bogus projection accounting.

January – Glen Fenter and GMACW staff, saddled by GMACW Board chaired by Willie Gregory, with unproven Canadian vendor for workforce development work. FedEx and Memphis Tomorrow both represented on Board.

March – State deadlines continue to be missed. I approach newly elected Mayor Jim Strickland with a solution to course correct and get the initiative on track. Nothing happens as Strickland joins GMACW Board.

April 2016 – ACT WorkKeys initiative launched and effectively goes unimplemented based on current data

July – Joined the Greater Memphis Chamber of Commerce and advocated a research based solution for connected, data driven career pathways and workforce development supported with common language development. Solution and local small business dismissed as connected workforce development goes unimplemented.

October – Met with the Hyde Foundation with solution in hand. No course correction.

2017

January- Fenter resigns from GMACW

March – Councilman Edmund Ford, Jr. opens up inquiry on unfilled jobs. I participate and propose a solution. Inquiry shut down without conclusion.

April – EDGE takes over GMACW and only has 3 GMACW Board meetings in 2 years while meeting every month to award excessive corporate/real estate tax abatements while saying workforce development #1 priority.

June – Meet with Jack Moore and nothing happens while raising implementation concerns with Chairman’s Circle Spence Wilson, Jr. Wilson implies I must EARN my right to raise concerns about taxpayer funded work.

June – I was kicked out of Greater Memphis Chamber without cause while having bylaws and annual membership review rights denied. This is a key indicator of the closed rigged Memphis system under the nationally embarrassing FedEx/Memphis Tomorrow complex

August – Let Fred Smith and the #1 local employer know of the problem. Still, no course correction.

2018

January – April – Continued to engage the EDGE Board while attending all meetings without any protest waiting patiently to substantively engage the EDGE Board. No engagement

June – Offended by the lack of service delivery, became publicly combative, as at this point, workforce development efforts are 3 years behind schedule

July – Engage Richard Smith of the Chamber. Solution dismissed and local efforts fall another year behind schedule

Later Summer – Met with bureaucrat Ted Townsend of the U of M. Nothing happens as he is dispatched to chase incentives around town as local workforce development efforts tank under the new FedEx/Memphis Tomorrow U of M Board of Trustees.

Later in 2018 – Smith is cited in the paper touting Talent Pipeline Management, a Washington DC solution, which is the same common language approach that I was advocating . In typical Memphis fashion, local small business dismissed.

2019

January – Legislative EDGE Tasks forces end without any changes to EDGE Board, not questioning excessive incentives or investigating deficient workforce development efforts. 

June – Typical of a closed rigged system, Richard Smith, Greater Memphis Chamber Board Chair, publicly shuts me out based on my activist work

July – University of Memphis, The Memphis Economy project, abandons their peer city economic development measurement platform blinding the public from objective measurement

Currently, after almost five years, there is no published employer demand data, no centralized job board, ACT WorkKeys remains unimplemented, no plan and no measurable definition for career readiness. And the rigged cycle heads back to where it all started with Willie Gregory, Spence Wilson and Richard Smith at the Chamber.

Its a  closed rigged FedEx/Memphis Tomorrow system that lacks the ability to grow and evolve operating with a design for ecosystem decline. Operates with a sense of entitlement to run the city into the ground while feeding on a Memphis community in need. All of the above occurs without objective public university thought leadership, press or legislative oversight. So pukin offensive…..

The EDGE Scandal results from a lack of fiscal impact analysis regarding some $500M+ in EDGE abatements over 8 years. EDGE has been referencing economic impact analysis to justify excessive corporate/real estate incentives which does not address the fiscal impact of abating taxes. According to the Bureau of Economic Analysis, that houses the Regional Input-Output Modeling System (RIMS) II used by EDGE, the RIMS II system cannot be used to conduct a complete fiscal impact analysis.

But in a rigged elitist Memphis system, this lacking accountability, as a matter of process, is just normal operating procedure. After almost 20 years, local leaders know nothing else under the rigged FedEx/Memphis Tomorrow system. The fact is that a fiscal note should accompany each tax abatement as a matter of process.

Unalarmed are such leaders as Kemp Conrad, Gerre Currie, Martavius Jones, Brandon Morrison, Edmund Ford and Mickell Lowery. All of these leaders have both academic and professional resumes that support competency in business and finance matters. But that expertise is being squandered in serving a Memphis community in need as excessive corporate/real estate incentives roar.

Jones has stated that it takes one full term to learn the job of a City Councilman. But it takes no time to be alarmed at gross fiscal process gaps ! Alarming, is the lack of alarm by local officials fluent in business and financial affairs.

Fiscal Impact

Using economic impact analysis without fiscal impact analysis lays the foundation for excessive corporate/real estate incentives that feed on a Memphis community in need while not serving the business community with adequate public support services. Excessive incentives are not good for business.

Using responsible assumptions, this spreadsheet imposes a fiscal impact analysis on EDGE abatements. The spreadsheet finds almost $300M in excessive job incentives when appropriate fiscal impact analysis is imposed. The major assumptions in the modeling include return on investment criteria individually for existing property and new capital investment property tax abatements.

Additionally, another major assumption concerns the per employee cost of locally funded public services that needs accounting for in a fiscal impact model while supporting the local economy. Arguments for this cost can range from $1,600 to $2,500 per employee to support the free enterprise system. If such costs are not accounted for, employers and the local community will not be adequately serviced resulting in the public’s diminished ability to serve the local economy while attracting new business investment.

Unlike the previous EDGE Scorecard analysis blog, the spreadsheet analysis makes accommodations for expected EDGE arguments and subtracts abated new cap x property taxes out of total project costs. The responsible assumptions used in the analysis end up recouping the entire $515M abated for taxpayers over a 13.5 year weighted average project life.

Before this fiscal impact analysis, it was determined through peer city benchmarking that job incentives were as much as $400M in excess. The spreadsheet can be downloaded for public use and can accommodate varying assumptions in the blue shaded area. But for whatever reason, fundamental fiscal impact of excessive tax abatements was not addressed in City/County EDGE task forces. Wonder why ?

EDGE Coverup

Last year, amidst concerns of EDGE bogus projection accounting, massive corporate/real estate incentives and below average total wage growth, City / Council EDGE task forces were formed. EDGE first originated as a Memphis Tomorrow Fast Forward initiative.

Councilman Berlin Boyd and Commissioner Willie Brooks, both employed by FedEx at the time, chaired the task forces. But there was no real EDGE reform. The EDGE Board was preserved in its current form while excessive incentives and botched workforce development efforts went unaddressed. It was a coverup of sorts resulting in a lack of course correction, a key indicator of a rigged system.

The only outcome was the creation of yet another “convening” economic development body called the Shelby County Regional Economic Alliance. So far, it has been a cheerleading group of sorts where almost 2 years since Richard Smith took over as Board Chair of the Greater Memphis Chamber, there is still no plan or measurable definition for economic development.

In the meantime, the entitled spooner elitists  continue to bully and feed on a Memphis community in need with excessive incentives without fiscal justification. In addition, to the excessive abatements, EDGE even misused some $1.7M in Depot funds that should have gone back to the taxpayer. The lack of fiscal impact analysis, as standard operating procedure over 8 years, proves an unchecked, entitled elitist spooner system bullying and feeding on a Memphis community in need. All of this occurs under the nationally embarrassing FedEx/Memphis Tomorrow corporate community leadership complex as a new poverty report shows increases in poverty.

Conclusion

So how to evaluate EDGE ? Well it starts with a fiscal impact analysis. Some local legislators seem to want to load up the evaluation with EDGE over performance. But that wouldn’t be fiscally conservative while not accounting for the business cycle. And how would the botching of the workforce development system and the loss of Electrolux, all under EDGE management, be accounted for ?

The proposed solution of 50% abatement on new cap x, provided current job levels are maintained and a 1% abatement on total wages with EDGE investment and term minimums maintained, right sizes PILOTs.

At any rate, the nationally embarrassing FedEx/Memphis Tomorrow complex, of which EDGE is a part, enjoys the support of lacking public university thought leadership, press and legislative oversight to confront elitist excesses that further irritate community imbalances. This has resulted in systems of decline being culturally engrained into the Memphis community leadership system. Rigging the system is seen as proficiency in evolving the ecosystem. But rigged systems don’t result in competitive economic growth; something Fred Smith must have missed in his history curriculum.

And sadly, ignorant of anything else after 20 years, local leaders only know rigged systems of decline. This leaves educated leaders unalarmed by gross fiscal process gaps further normalizing ecosystem decline while ignorantly viewing the nationally embarrassing FedEx/Memphis Tomorrow complex as visionary.

So, its more of the same in a design for ecosystem decline……