Wednesday, August 17, 2005

Teamwork Brought Home Victory In IP Competition


Success has many fathers, it is said, so before the delivery room is filled with proud parents, we need to take a moment to recognize the team that put together the proposal that lured the world headquarters of International Paper from Stamford, Connecticut, to Memphis.

While VIPs made the announcement, it was their staff that did the heavy lifting, and it was good to hear them given credit at the press conference. None of the praise is likely to be reported, so for the record, the team was headed up by Memphis Regional Chamber senior vice-president of community development Dexter Muller – now serving as interim president and CEO.

Representing city and county governments were Richard S. Copeland, director of the Division of Planning and Development; Kelly Rayne, special counsel to Mayor AC Wharton; and Pete Aviotti, special assistant to Mayor Willie W. Herenton. The other member of the team was Mark Herbison, senior vice-president of economic development for Memphis Regional Chamber. These were the five people responsible for putting together the economic coup that added Memphis’ third Fortune 500 company.

Also key to the economic development win was City Council Member Rickey Peete and Shelby County Commissioner Julian Bolton, members of the evaluation committee of the Memphis and Shelby County Industrial Development Board. They asked the right questions and ultimately supported the payment in lieu of taxes (PILOT) proposal that IP accepted. Both elected officials have questioned our community’s rampant overreliance on tax freezes in the past, and their stamps of approval for the deal go a long way in convincing the public that it was a deal that is wise and in taxpayers’ best interests.

The teamwork that won the headquarters was highly orchestrated and highly cooperative, and while bragging rights about IP may yield big benefits, the most important outcome may be the rediscovered working relationship between the Chamber, Memphis and Shelby County. It could prove crucial to Memphis’ success in recruiting new business and nurturing existing business in the coming years, and here’s hoping that they continue to meet in an informal way to guide economic development activities and policies.

While there may in time be questions about the size and rationale for the $15 million tax waiver given to IP over 15 years, there is no question that this is what tax freezes are for. Last week, we wrote that in a 10-year span when Memphis and Shelby County gave 415 tax freezes, Nashville/Davidson County gave five. In fact, during that decade, about 60 percent of all the city and county taxes waived in the state was waived here.

Nashville reserves tax freezes for major corporate headquarters just like this one, and with this victory, Memphis should now fine tune its economic development policies and remove the stigma that comes when you repeatedly sell your city at a discount.

IP has been a beneficiary of five PILOTs, including one that it defaulted on. For its part, one of its first acts as a new corporate citizen should be to reassure the taxpayers who are investing so significantly in their future. They do this by making a commitment to stay in Memphis at least until 2020, when the tax freeze expires. The corporation’s decision to break its promise with Connecticut after pledging to remain there until 2010 gives some people pause, but it was never enough to keep Memphis from competing for the 94 high-salary executives that will now call our city home.

In the end, too, the deal would never have been consummated without Gary Shorb, Chamber chairman, Mayor Herenton and Mayor Wharton, who gave their team the flexibility to negotiate what they considered the best agreement for this community. That’s often the greatest test of real leadership, and with IP, Memphis not only passed the test. So did they.

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