Shelby County commercial vitality lags its peers due to an insufficient number of business establishments with employees. In fact, according to census data, to catch below average Birmingham, Memphis would need 4500 new business establishments with employees.
While the greatest opportunity to increase establishments resides in the Black community, with a gap like 4500, Shelby County cannot be choosy. Sadly, local MWBE programming is of little help for very small locally owned businesses like mine. These are the type of new businesses that are needed to come online to increase the number of local establishments with employees.
At the same time, local MWBE programming is an elitist sham. Its a true statement, that one can inherit a highly established business, like Duncan Donuts Williams has done, while your mother maintains controlling interest and qualify for local MWBE participation. Or, one can retire as a senior executive from your family owned corporate holding company, as Kathy Buckman Gibson (KBG) did, and start a woman owned business enterprise and qualify for local MWBE participation. Even out of town companies due quite well, in the local business space to even include Canadian companies based in Tennessee.
In reality, these folks business interests are going to do just fine without help from local MWBE programming. On the other hand, my small LOSB doesn’t even qualify for EDGE’s local business program that disallowed LOSBs in 2016. EDGE just released their latest MWBE propaganda piece, showing massive overperformance. So after years of MWBE programming and such overperformance, why is Shelby County commerce lagging so badly ?
This is Why Its Lagging
The real reason that commerce lags in Shelby County is because local elitists don’t support small business. This condition necessitates the need for government “programming” that is then, not surprisingly, again highjacked by local elitists. The 2011-19 EDGE report provides insufficient detail on what is really happening by not showing the distribution of MWBE receipts. Maybe Commissioner Van Turner, who is Commission MWBE Committee Chair, might want to know what is really going on. Then again, he may not.
Here is what is happening. Based on a survey of EDGE’s 2016-19 Local Business Program (LBP), 25 of 385 or 6% of the MWBE companies controlled 83% of the receipts. Of the $163M in MWBE receipts from the 2016-19 LBP, the top 25 of 385 companies took down $136M in receipts. The top receipt generator was KBG, with the top 25 companies being highly established local firms with an average business life of 33 years !
And some of the leading MWBE receipt generators are not even based in Shelby County ! See below:
This type of elitist programming is not going to move the needle with a 4500 firm gap to catch the next below average peer of Birmingham. Additionally, one easily can see what happened when EDGE ended LOSB participation in their local business program in 2016. Highly established businesses, just piled into WBEs. See graphical representation below:
Conclusion
The only way to increase commercial vitality is for an all hands on deck support for local small, less established business and startups through increased transactional velocity. The local effort always seems to be on raising capital, business planning advice and expos and not transactions.
As far as MWBE and LOSB programming, that needs to be prioritized for businesses with the need and startups. Not the type, Epicenter and UMRF are focused on with sights on going public but small businesses that build commercial vitality. And yes, right sizing PILOTs will help as well, as small business depends on public resources for success.
After all, at least with Shelby County Government, one can be a $100M WBE or MBE company and participate in MWBE. Something is wrong with that and apparently leads to only a few companies dominating MWBE receipts……