Tuesday, January 31, 2006

Interstate Sound Barriers Don't Have To Be Eyesores

The road to hell is paved with good intentions. So is I-40 at the Midtown Interchange.

Just take a look at the massive concrete walls being built as sound baffles for the historic neighborhood adjacent to the interstate.

But rather than simply allow concrete to look like concrete, someone at Tennessee Department of Transportation has decided to paint it, and worst of all, to paint it peach (see photo)with two dark accent stripes painted on the wall. It’s reminiscent of that awful public architecture – like the Memphis and Shelby County Construction Codes Enforcement headquarters at Shelby Farms Park – that for some unfathomable reason decides to add a band of color that wraps buildings like a bandage.

When asked about the paint color, the people at the work site are quick to shift the blame to headquarters. They said that as soon as they put up the first test panels for the new paint, they called TDOT’s main office to ask if this was really the right color.

Questions by the workers centered on more than the color. Some also questioned why the state would want the upkeep that results from painted walls and wondered if the painted walls would be a magnet for graffiti.

The answer from TDOT: the paint is not a mistake, and yes, it is the right color.

All in all, it’s such a missed opportunity for TDOT to do something right for Memphis. All it would have taken was a phone call to the Urban Art Commission. Rather than paint concrete, our public art agency could have involved artists with experience in these kinds of projects.

But traffic engineers are the last frontier for public art projects. Architects are responsive, as shown in the impressive public art installed in city schools and police stations. The resistance of traffic engineers is confusing, because as long as TDOT is pouring concrete anyway, why not make it with textures, graphics or sculptures?

No less an expert than the Federal Highway Administration of the U.S. Department of Transportation says that designs like lizards, cacti, ladybugs, trees, leaves, animal tracks and landscapes can be added to noise barriers to make them more attractive. In fact, an FHWA official said that aesthetics are just as important – maybe even more important – than the noise reduction of a barrier. “Many citizens view an ugly barrier as a waste of time and money.”

There’s no argument here.

In Scottsdale, Arizona, noise barriers are decorated with native desert plants and lizard motifs that create a soothing and appealing environment (see photo). In Mill Creek, Washington, the concrete on the sound barriers has a border of leaves (some with ladybugs) along the top and the concrete on the rest of the wall is made to look like tree bark.

Scottsdale did it by adding a landscape architect and an artist to its design team. The team immediately saw the massive walls as a huge palette to be used for public art that could “embrace the city’s overall ideas and assist in creating an art project that could help weave together a community that was being split by the corridor alignment.”

In Mill Creek, brainstorming sessions led to designs featuring maple and alder leaves, cedar branches, dragonflies, ladybugs and animal tracks, which were seen as reflective of the city’s environmental heritage.

While coping with the unattractive painted sound barriers here would be hard enough, it’s especially difficult when you see what’s being done in other parts of the U.S. These concrete barriers don’t have to be eyesores, but unfortunately, it always seems like we’re the last to demand that public works projects should be well-designed and assets. Every time we see these peach walls, we’ll remember what might have been.

If there are any words that TDOT should live by, it’s these by Margaret Burning, associate curator of public art for the Scottsdale Public Art Program. “On the public level, you have an artistic treatment that is responsive to the scale of the environment. If you are driving 65 miles an hour down the freeway, it envelops you without being distracting. On another level, the treatment serves as a tool to introduce people to Scottsdale, showing that the city cares about the quality of life for its citizens and visitors driving on the freeway itself. You don’t need to know a lot about the place or be an art connoisseur to appreciate the design.”

Hopefully, TDOT will throw away its paint swatches, and next time, it will let its fingers do the walking. The phone number at the UrbanArt Commission is 901-525-0880.

Monday, January 30, 2006

Is The Memphis MPO Inherently Biased?

The Memphis Urban Area Metropolitan Planning Organization (MPO) is one of those arcane groups that labor in the shadows of local government, but whose decisions fundamentally shape how our community grows.

That’s because its decisions have the power to fuel sprawl or determine if the urban core can compete with new commercial areas.

The Memphis MPO is Memphis in name only. Chaired by Shelby County Mayor A C Wharton, most of MPO members are from outside of the city limits, and in this role, they sign off on how tens of millions of dollars in federal transportation money are spent, and they set major road priorities for its work.

While the purpose of the federally-mandated MPOs is to serve as the planning vehicle for regional cooperation and coordination, a new study by the Metropolitan Policy Program of The Brookings Institution calls into question the basic fairness of MPOs, especially the one in Memphis.

“Decisions by MPOs have important ramifications for metropolitan growth patterns and, by implication, social and economic opportunity,” the report said. “Yet, the decisions are made by boards whose members are generally not elected to serve on the MPO. Further, MPOs are not required by law to have representational voting. The potential exists, therefore, for MPO decisions to be biased toward certain constituencies or locales at the expense of others.”

The report on 50 large MPOs in the U.S. concluded that Memphis has the third most unbalanced board. While the City of Memphis has 63 percent of the total population, it has only 16 percent of MPO members. Meanwhile, suburbs with 32 percent of the population control 79 percent of the vote.

In addition, Memphis was cited as one of the most racially unequal. Despite Memphis’ large African-American population, 84 percent of MPO’s members are white. “That MPO boards do not reflect the geographic or racial composition of the metropolitan populations they serve should be a cause for concern, especially given that MPOs were intended by the federal framers to be an essential conduit for implementing reforms and ensuring public accountability,” the report said.

There are ways that the Memphis MPO could be fairer and more representative. A free-standing organization devoted solely to transportation planning, all board members are appointed by various governments. It could follow the example of Portland, Oregon, which is the only free-standing MPO that has elections for its members.

Another option is weighted voting, which 16 of the 50 large MPOs use to make sure the central city has a number of votes in proportion to their share of the total population. That avoids the kinds of disparities that happen here, where the vote of the Memphis mayor can be cancelled out by the vote of the mayor of Olive Branch.

In light of these imbalances, it should be no surprise that MPO decisions are frequently skewed toward the suburbs. The makeup of the Memphis MPO powerfully demonstrates how this can happen:

• Governor of Tennessee, or his representative
• Governor of Mississippi, or his representative
• Commissioner, Tennessee Department of Transportation
• Executive Director, Mississippi Department of Transportation
• Mayor of Shelby County
• Mayors of Memphis, Germantown, Bartlett, Collierville, Millington, Lakeland and Arlington
• Mayor of Fayette County
• Mayor of every incorporated town in Fayette County
• President, DeSoto County Board of Supervisors
• Mayors of every incorporated town in DeSoto County
• Chair, Memphis Transit Authority
• Chair, Memphis and Shelby County Port Commission
• Chair, Memphis and Shelby County Airport Authority

In a recent list of the top 10 road priorities for the Memphis MPO, half of the projects were in the suburbs, and over the years, MPO funding has frequently contributed to eastward sprawl and responded to the call by developers in the “warehouse corridors” of southeast Shelby County for wider and wider roads.

Most sadly of all, because of suburban dominance on the local MPO, its attention to public transit is nonexistent. This means that not only does MATA not receive much-needed funding but MPO’s ability to push for better management and service is squandered.

Meanwhile, a recent proposal for light rail to Germantown and Collierville was bogged down when suburban interests voted for a study widely interpreted as an attempt to kill the project. After all, they represent commuters, not bus riders, and it shows in their voting.

Sunday, January 29, 2006

In Love With Trolleys

From Otis White's Urban Notebook:

What is the deal with trolleys? Every city, it seems, is suddenly crazy about streetcars. On the surface, this makes no sense. They’re an antiquated form of transportation (most cities ripped up their streetcar lines by the 1950s), they’re slow (top speed: 5 miles an hour), stop at nearly every corner and run along lines that average only two and a half miles in length. So who wants to go for a short, slow ride?

Before we answer that, some definitions: Actually, the proper name is streetcar, although most people prefer calling them trolleys. These short, squat rail cars run on electricity, usually from overhead wires. (The poles connecting the cars to the wires are trolley poles, which is where the more popular name comes from.) Streetcars are different from light rail in a number of ways: They’re slower, shorter (both in length of vehicle and route) and almost always run on streets, unlike light rail which sometimes runs on dedicated rights of way. Oh, and there are no stations. If you want to board a streetcar, you stand next to the streetcar sign or just wave at the conductor, although many streetcars are so slow you can just hop aboard as it passes.

In the early 20th century, nearly every city, large and small, had streetcar lines. Starting in the 1930s and continuing through the 1950s, cities shut them down in favor of the more flexible, more seemingly modern diesel buses. (General Motors played a role in this, buying up streetcar systems in some cities. But even had GM not given its push, streetcars were dying out after World War II.)

And now they’re back. It’s hard to make an exact count, since the difference between light rail and streetcar systems can be fuzzy, but there are at least 20 cities with streetcar lines and double that number with systems on the drawing boards. (Notable places with new streetcar lines: Tampa, Memphis and Charlotte) Big cities, too, are fascinated by streetcars. There are serious proposals to bring streetcars back to Atlanta and Seattle.

Why? There seem to be three motivations: the belief that cute, clanging trolleys will help with tourism, the idea that they’re a great form of “circulator transit” (where people move from one side of a business district or college campus to another), and the notion that they allow for greater residential density in in-town neighborhoods as people hop on the streetcar for a short ride downtown. There’s a fourth motivation: People just plain like them, in the same way they like Art Deco architecture or antique automobiles — as nostalgia.

But are any of these motivations good, rational reasons for spending millions to lay track, string overhead wires and buy antique streetcars? Yes, but only if the streetcar line is built as part of a larger plan of development (which, come to think of it, is how all transportation should be built).

Portland, Ore., showed how to do this when it built a streetcar line to connect two nearby neighborhoods with downtown. Part of the deal: Developers in these areas had to build much greater densely than they had planned. (On one tract, the city boosted zoning from 15 units per acre to 125.) The density and the streetcar worked hand in hand: More people on the street meant more riders; the streetcar line, in turn, meant less parking was needed, so more housing could be built. Important side benefit: The streetcar and the resulting density helped create one of Portland’s liveliest downtown neighborhoods.

Tampa, alas, showed how not to do it. The 2.5-mile line from downtown to historic Ybor City couldn’t make up its mind whether it was a tourist attraction or a serious way to get to work. (Must be a tourist attraction: The Tampa streetcar starts running only at 11 a.m. and costs $2 to ride.) Result: a scary operating deficit and no easy way of turning things around.

Footnote: So who doesn’t like trolleys? Transit systems, which are run by people who measure effectiveness by efficiency (number of people moved from point A to point B every X minutes). As a result, most streetcar systems today are sponsored, at least initially, by city governments, developers, business associations or nonprofits. Every interest, that is, but the transit system.

Saturday, January 28, 2006

Energy Trends Have Special Meaning for Memphis

I am still puzzling over Monday's top story in the New York Times by Edmund Andrews.

Here goes:

"At a time when energy prices and industry profits are soaring, the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60 billion in oil and gas from publicly owned lands and coastal waters.

"If royalty payments in fiscal 2005 for natural gas had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-month investigation by The New York Times has found.

"[But due to byzantine federal regulations]... the nation's taxpayers -- collectively, the biggest owner of American oil and gas reserves -- have missed much of the recent energy bonanza."

Now tell me again why Mayor Herenton wants to sell off MLGW? True, our utility does not produce energy. And it's also true that there would be a short-term financial gain. Further, the Mayor has shown little interest in staffing MLGW with energy (or even management) professionals. But where is the long-term benefit for Memphis taxpayers?

The New York Times piece is a cautionary tale for Memphians.

Thursday, January 26, 2006

County School System Continues Its Questionable Decisions About New Schools

Why are these people smiling?

While Memphis City Schools is developing a national reputation for innovative school reform, Shelby County Schools seemed mired in a business as usual approach to public education.

This means that in the near future, the county school system will once again try to stampede approval of another questionable new school proposal despite its political drawbacks and racial overtones.

It’s “Southeast Shelby County High School Redux,” set to begin in a couple of weeks. Look for the manufactured sense of urgency that always accompanies a county school proposal, the near hysterical demands for immediate action and the political machinations designed to paint Memphis City Schools into a corner.

Perhaps, this time around, some people will have had enough. While Memphis City Schools ultimately went along with its county counterpart’s single-minded attitude on the selection of the single worst high school location in this community, it was not without some bruised feelings and battered political sensibilities. That’s why the fractious debate about the high school location may in time look tame when compared to the controversy to come.

Once again, Shelby County Schools (whose board is pictured here) will propose a questionable location – a vacant Schnuck’s store – with connections to a developer whose name has a familiar ring to it – Hyneman.

Once again, Shelby County Schools will push the proposed school despite any real need for it at this time. Like the southeast Shelby County high school, the number of students needed to justify a new school will not occur for five to 10 years.

Once again, there is little reason for this new school at this time and even less reason for Shelby County Schools to be making these decisions. By the time increased enrollment justifies a new school, the area will have been annexed into the City of Memphis.

The Shelby County Schools’ Board has set a town hall meeting in early February to discuss the proposal for the Schnucks school, but it seems an exercise in window dressing. The board has already voted to lease the grocery store at Riverdale and Holmes for $339,130 a year. Unaddressed is the cost of renovating the grocery store into a school, but even without this piece of the financial puzzle, Shelby County Schools is determined to proceed.

So what is the impact of these schools and why is the county district so determined to open them? While we hope that the answer to both questions is not the same, it’s hard to see any motivation except one - to move African-American students out of Germantown schools.

School board members and Germantown elected officials have acknowledged as much in their planning meetings and in terms that are anything but politically correct. When the Schnucks School opens, it will be more than 90 per cent African-American, returning the percentage of black students in Germantown schools to a level that officials can accept.

Just look at the facts about the new high school. The severe overcrowding cited by school officials to justify the new school amounts to a grand total of 79 students. In fact, with the new high school, the capacity of Germantown High School will drop below 50 percent. It will be 2012 before the growth in enrollment would justify a 1,200-student high school, much less the 2,000 warehouse being built by Shelby County Schools.

The county’s persistence on these new schools speaks volumes about the peculiar relationship that has existed for decades between Shelby County Schools and the mayors of the small towns of Shelby County. Although none of the towns dedicate a percentage of their property tax rates to the public schools which they tout so proudly, the opinions of their mayors are given more clout over county school decisions than officials of Shelby County Government, which foots the bill for the schools in the towns.

When Shelby County Government reinvented itself in 1976, it was to convert the sleepy, rural government into an active, urban one. It was a culture shift that has never been completely successful, but remains a work in progress. The Shelby County Schools, meanwhile, never budged, stuck in time and in a rural world view that produces ideas like these two new southeast Shelby County schools.

Most disturbing of all, this insular thinking runs the risk of being the spark that ignites an ugly controversy with racial overtones. Despite the political tinder box that is local politics, the board seems hellbent on pushing through its schools, whatever the cost to the overall peace of our community.

The answer this time is the same as it was last time. Shelby County Schools should bow out, and give the decision over to Memphis City Schools. After all, southeast Shelby County should be annexed into Memphis within five years, so why not just allow the city school district to make these decisions on future schools?

As short-term tenants of the schools, it makes little sense for the county schools’ policies to guide these decisions. In addition to the impending annexation, there are at least three other reasons Memphis City Schools should make these decisions.

One, Memphis City Schools does not share Shelby County Schools’ penchant for warehousing students in oversized schools. Two, Memphis City Schools does in fact build better schools, not the minimum security prisons erected by the county system. Three, there’s Superintendent Carol Johnson, whose leadership and new thinking are our best educational assets.

In the end, the new county schools' proposal shouldn't be called the Schnucks School as much as it should be considered the Snuckered School.

Wednesday, January 25, 2006

Trends To Watch in 2006

McKinsey Quarterly reports on the "currents that will make the world of 2015 a very different place to do business from the world of today." Among those are these four with particular relevance to urban leaders:

Public-sector activities will balloon, making productivity gains essential. The unprecedented aging of populations across the developed world will call for new levels of efficiency and creativity from the public sector. Without clear productivity gains, the pension and health care burden will drive taxes to stifling proportions. [Note: That's why the theme of "active living" will continue to appear on this blog.]

Technological connectivity will transform the way people live and interact. The technology revolution has been just that. Yet we are at the early, not mature, stage of this revolution. More transformational than technology itself is the shift in behavior it enables. We work not just globally but also instantaneously. We are forming communities and relationships in new ways. (Indeed, 12 percent of U.S. newlyweds last year met online.) More than two billion people now use cellphones. We now send nine trillion emails a year. We do a billion Google searches a day, more than half in languages other than English. For perhaps the first time in history, geography is not the primary constraint on the limits of social and economic organization.

The battlefield for talent will shift. Ongoing shifts in labor and talent will be far more profound than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of well-trained talent. The increasing integration of global labor markets, however, is opening up vast new talent sources. The 33 million university-educated young professionals in developing countries is more than double the number in developed ones. For many companies and governments, global labor and talent strategies will become as important as global sourcing and manufacturing strategies.

Demand for natural resources will grow, as will the strain on the environment. As economic growth accelerates -- particularly in emerging markets -- we are using natural resources at unprecedented rates. Oil demand is projected to grow by 50 percent in the next two decades, and without large new discoveries or radical innovations, supply is unlikely to keep up. We are seeing similar surges in demand across a range of commodities. Water shortages will be the key constraint to growth in many countries. And one of our scarcest natural resources -- the atmosphere -- will require dramatic shifts in human behavior to keep it from being further depleted. Innovation in technology, regulation and the use of resources will be central to creating a world that can both drive robust economic growth and sustain environmental demands.

From CEOs For Cities new blog at http://ceosforcities.squarespace.com

Tuesday, January 24, 2006

City School Plan Makes Persuasive Case For Funding

Finally, the tail is not wagging the dog.

For the first time in recent history, Memphis City Schools’ capital funding needs are center stage with Shelby County Schools moved to a supporting role.

That’s as it should be, because for too long, the political debate and decisions on public education have centered on the needs of the county system, creating the common perception that the city schools are receiving windfalls as a result of the state ADA (Average Daily Attendance) law.

The record now stands corrected. Superintendent Carol Johnson’s five-year comprehensive plan – titled Achieving The Vision – proves in meticulous detail that the city school district has demands that deserve much more attention than its county counterparts.

In fact, its capital needs now have a price tag, and it comes to $488,142,477.

Or put another way, the ADA funding produced for Memphis City Schools because of the construction of new county schools is anything but a windfall. In fact, it has been totally inadequate in addressing the widespread renovation and maintenance needs of the U.S.’s 18th largest school system.

(To recap, the short explanation of ADA is that school funding must be fair and proportional, so every dollar spent on the county system must be matched with roughly three dollars for the city system, because there are three times more students in Memphis.)

The plan announced last week is a clear-eyed evaluation of Memphis City Schools’ 176 campuses and calls for:

• The closing of eight schools and for five to be monitored carefully for possible closure

• The construction of five new schools

• The building of two schools to replace existing schools that will be torn down

• The converting of three high schools and one elementary school into middle schools

• The elimination of the 338 portable classrooms being used throughout the district

• The improvements of all schools to make them Americans for Disabilities Act compliant

For the first time, every individual school has a detailed assessment of its problems and its needed repairs. In ranking schools with the Facility Index Condition, the industry standard for rating the condition of buildings, the report concludes that Memphis City Schools’ overall ranking is fair. However, there are 32 schools in the “worst” category. Coincidentally (or not), Memphis City Schools has 31 schools that are older than 60 years, and according to the report, 25 were built more than 75 years ago and four are more than 100 years old.

Much of the report is full of facts that contradict conventional wisdom about Memphis City Schools, none more directly than showing that the district is gaining students (while being diplomatic enough to refrain from pointing out that the county system’s enrollment peaked a few years ago).

In three planning zones (Frayser and Raleigh, East Memphis and Cordova, and Southeast and Balmoral) for Memphis City Schools, population and student enrollment are growing. In addition, the average capacity of all public schools in Memphis is 84 percent, but 56 schools have capacities of more than 90 percent. (According to the report, research shows that schools operate best with 85 percent.)

While the capital needs of Memphis City Schools sound daunting, it is nonetheless essential for city and county to answer them. That’s because there is a mountain of research that proves the direction connection between the physical conditions of a school and its students’ academic performance. According to the TACIR (Tennessee Advisory Commission on Intergovernmental Relations), students in schools with good physical surroundings score five to 17 points higher on standardized tests than students in substandard schools.

Citizens of this community have been paying taxes for schools since 1852, and now more than ever, it’s a simple equation: pay now or pay later. Now, it’s an investment in better city schools and improved student grades. Later, it costs even more in the form of more law enforcement, more poverty and costly social problems.

No one makes the case for this investment better than Dr. Johnson. As superintendent, she has made impressive strides in her short tenure, but nothing she has done is more important than her success in focusing the discussion about public education on the school system that matters most to our future – Memphis City Schools.

Monday, January 23, 2006

Constitutional Legal Opinion Critical To Tax Reform Proposal

In yesterday’s post, we questioned whether the needed changes in the PILOT program will ever get a fair hearing. We hope the same can’t be said about the proposal for a payroll tax.

With about 88,000 people driving into Shelby County every day to work, exacerbating one of the most regressive tax structures in the nation, the only tax reform proposal on the table deserves serious consideration. The proposal, called the Shelby County Fairness Program, has been advanced by conservative Shelby County Commissioner John Willingham, who has taken up the cause championed previously by former Memphis City Council Janet Hooks.

He believes there is a loophole in state law that could potentially give Shelby County the ability to enact a tax on the income of people who work in Shelby County, including those who are nonresidents of our community. He’s asked for the help of the county administration, and in response, his question has been forwarded to the Shelby County Attorney’s Office for a legal opinion.

Unlike its city counterparts, the Board of Commissioners does not have its own attorney. Its legal affairs are handled by the county attorney and his assistants, all of whom are appointed by the county mayor. While complaints about the office are as rare as tax cuts, it would remove any cloud about a politicized legal opinion if a special outside attorney, preferably someone with expertise in constitutional law, was appointed to consider the legal issues surrounding the payroll tax proposal.

In government, symbolism sometimes has more power than reality. The county attorney’s office has strong loyalties to the administration, which only makes sense because every member of the county’s legal staff – one of the largest law firms in the city – is appointed to their jobs by the county mayor. Most are politically active and reliable campaign contributors, so rather than ask for a legal opinion by current staff that could be questioned by some for its objectivity, an outside special attorney could resolve this question.

Shelby County Mayor A C Wharton has always been skilled at understanding the potency of symbolic actions, and an outside attorney to consider this question would say volumes about the values of his administration.

Sunday, January 22, 2006

PILOT Recommendations Deserve Real Presentation

The primary question these days about the consultants’ study about tax freezes isn’t what changes will ultimately be made in the program, but if the recommendations will ever get a fair hearing.

Last week, there was the meeting of the PILOT committee of the Memphis City Council where Council Attorney Alan Wade – who also happens to represent firms asking for the tax freezes – told his public clients what the consultants’ report said.

Meanwhile, city and county moved ahead with yet another committee, a government purgatory that keeps a politically charged decision at bay for awhile. It has the political benefit of sounding like something is being done, while dragging out a decision past its immediate burst of media coverage and controversy.

Strangely, the City Council committee convened a meeting to discuss the study about the controversial Memphis and Shelby County PILOT program, but did it without the consultants who wrote the recommendations. In fact, to this point, the consultants have never made a presentation to either the Memphis City Council or the Shelby County Board of Commissioners.

Rather than the consultants, Alan Wade took the role of telling Council members what the report said, and while he conceded that his legal work includes applying for PILOT’s for his private clients, he had no hesitancy in pointing out what he (and presumably his private clients) thinks are problems with the recommendations.

It seems obvious that Mr. Wade, a lawyer who ably represents the interests of City Council, would have better responded to the committee’s interests if he had called in the consultants to make the presentation. Several comments that he made did not precisely represent the findings of the report or the process that produced it.

Like most public studies, we assumed that the contract with the consultants included a firsthand presentation, and a check with local government confirmed that this is the case. Hopefully, sometime soon, someone will invite them to Memphis to explain their well thought out recommendations to correct the serious flaws in the current incentives program.

In recent weeks, Memphis Mayor Willie W. Herenton has made a point of defending the incentives program in his speeches. So far, he hasn't even agreed that the present program deserves fine tuning, something even a Memphis Regional Chamber vice-president has acknowledged.

Mayor Herenton leaves the impression that there is nothing wrong with the current PILOT program, and that anyway, he says decisions on PILOT’s are an executive branch function, rather than falling within the power of the legislative body. Actually, the state law on tax freezes gives this power to the City Council, which has delegated it to the Memphis and Shelby County Industrial Development Board, not the mayors.

To his credit, Mayor Wharton says that changes to the PILOT program are needed, and another committee not withstanding, he promises that the consultants’ report will form the basis for its work, which is unclear at this point.

The PILOT report featured some long overdue recommendations, including the need to target incentives to high-priority industries, tighten up reporting requirements for the companies receiving tax freezes and require companies to prove that the incentive is necessary for its project to take place.

It's a thorough report, and hopefully, its recommendations could end the days when the IDB gives tax freezes to firms that pay salaries to employees who are still eligible for food stamps. Is it really in the public interest to waive taxes for these kinds of low-skill, low-wage jobs that perpetuate the image of Memphis as a blue-collar workforce.

While the city and county budget crises are reason enough to tighten up the PILOT program, the more compelling reasons for doing so are connected to public policy.
Surely, it’s time to weigh more carefully the public policy implications of every single tax freeze, because in effect, every time a tax freeze is approved, taxpayers are investing in the business that receives it.

It’s a change in approach that is needed in all parts of local government these days. Too often, there is a disconnect between what public actions are taken and where the public funding for those actions are coming from. A good place to start the attitude adjustment is with the PILOT program.

Wednesday, January 18, 2006

Memphis Tax Structure Becomes Even More Regressive

The latest study of 51 cities – the largest in each state and the District of Columbia – shows that Memphis is moving to the head of the list. Unfortunately, it’s the head of the list of the cities with the most unfair tax structures in the nation.

A few weeks ago, we wrote about the meticulously documented annual survey by the Office of Revenue Analysis for the District of Columbia on the fairness of these representative cities’ tax rates and tax burdens. In the previous year’s index of progressivity (read fairness for those of us not given to economist’s jargon), Memphis had the fourth worst tax structure on the list, with only Cheyenne, Seattle, Sioux Falls and Las Vegas ranked lower than us.

This year, however, we’ve moved even closer to the lead in the dubious category of having the most unfair tax structure. We’ve now leapt over Seattle and are only three places from the bottom. Only Sioux Falls and Las Vegas beat us out on tax inequity.

Evidence of the our current tax structure’s unfairness is stark:

• The average tax burden in Memphis for families of four earning $25,000 is 7.2 percent of their total income.

• For a family earning $50,000, the amount of the income paid in taxes is 6.4 percent, and those with incomes of $75,000 pay 6.5 percent.

• Memphis families earning $100,000 pay 6.1 percent, and remarkably, families earning $150,000 pay the least – 5.8 percent.

Put simply, the tax burden for higher income families is substantially less than families earning only one-sixth as much. In other words, under regressivity in the dictionary, it would say, see Memphis.

In fact, since last year, the percentage of income for the $25,000 family actually edged up .2 percent, while the $150,000 family moved down .2 percent.

By the way, the average tax burden for the 51 cities paints a graphic portrait of our tax structure’s inequities – 7.1 percent at $25,000; 8.3 percent at $50,000; 9.2 percent at $75,000; and 9.3 percent at $100,000 and $150,000. In other words, the amount you pay is based on your ability to pay, a fundamental precept of progressive, or fairest, tax systems.

That’s why the most progressive tax structures don’t tax lower-income, working families at the same rate as wealthy families. Memphis doesn’t even rise to this level playing field, where every one pays the same percentage. Instead, it gives a bonus to the highest-income families by reducing the amount they pay, when compared to lower-income families, by 1.4 percent.

For perspective, consider that the 5.8 percent in Memphis for families earning $150,000 compares with the following rates: Philadelphia, 12.7 percent; Providence, 12.2 percent; Baltimore, 11.8 percent; Atlanta, 11.2 percent; Columbus, 11 percent; Louisville, 10.4 percent; Little Rock, 9.6 percent, and so on.

“The three cities with the least progressive state and local tax systems are Las Vegas, Nevada; Sioux Falls, South Dakota; and Memphis, Tennessee,” concluded the 56-page report. “In Sioux Falls and Memphis, the sales and use tax burden is substantially above the 51-city average.”

In analyzing the tax burden of District of Columbia residents, the report concluded that the problem there happens because the city “does not have the authority to tax nonresident income earned within its borders. Nonresidents earn about 2/3 of all income in the District of Columbia.” While the district’s dilemma is obviously more dramatic than ours, the same principle applies, because about 20 percent of the $2.2 billion earned here is by nonresidents, who pay no part of their income to support the infrastructure that creates the jobs they hold.

The study points out that Memphis has the highest sales tax rate of the 51 cities. Unspoken is the risk attached to this high dependency on sales tax revenues, because, as we learned, a sudden drop in these revenues can wreak havoc on a governmental budget.

What’s all of this mean? It means that until Memphis does something to make income a source of tax revenues, it will continue to be more and more regressive. As it gets more regressive, it will spur more migration out of Memphis, which will stimulate more tax increases, which will produce even more regressivity, and more flight, and so on and so forth.

While there are some ideas being advocated to broaden the source of revenues – such an adequate facilities fees and impact fees – they are only band-aids on a badly wounded tax structure. It is this structure that in the end is the real crisis in Memphis and deserves thoughtful analysis and new policy options for improving it.

Of course, the only thing more challenging than our regressive tax structure is finding someone with the political courage to tackle real tax reform and the restructuring of our entire tax structure.

In the future, we shouldn’t listen to any tax proposals without asking the core question: What is being done to take of the problem, rather than just addressing its symptoms.

Tuesday, January 17, 2006

Paul Grogan Talks About Civic Leadership on Smart City Radio

Paul Grogan, CEOs for Cities founder and president of the Boston Foundation, was our guest on this week's "Smart City," and the subject was civic leaderhsip. Paul outlined the direction he has set for the Boston Foundation to fill the leadership gap left by corporate CEOs who have been merged out of business.

This new approach to civic leadership has at least two benefits, according to Paul.

"I'm not saying this is going to be easy, and there is going to be a good deal of uncertainty associated with it," he told "Smart City," "but there's also some excitement because let's face it, not everyone thought that having the white guys in suits representing the big businesses should be in charge of private initiative. Now, we have an opportunity to have a much more open, inclusive and dynamic civic process if we can figure out how to organize it properly and bring the necessary force to the priorities that we have as a community."

He explained how foundations can step up to a new and more powerful civic role. "We've changed our role considerably. We still make a lot of grants to superb nonprofit organizations across a broad range of issues, but we also commission a great deal of research on local and regional issues. We hold a large number of civic conversations, seminars, conferences, workshops of all kinds to bring people together to consider what's happening in our region. And where we see an opportunity, we have catalyzed action groups, impromptu coalitions that agree to work on an issue together.

"It is permitting us to have intelligent conversation about what's happening in the city and prompting us to develop consensus more quickly on where we have to act."

Paul asserted the importance of what he termed the "distinterested leadership" role played by the foundation. "Most public policy questions are a contest of interests," he said. "There are always interest groups that have a direct stake in the outcome of a particular policy or piece of legislation . Disinterested leaders are those who are outside that immediate circle of interests who have a broader view, perhaps a higher view, of what is at stake. The involvement of disinterested leaders can change the choices -- and, I would say, improve the choices available to public leaders. A lot of the progress we've made in Boston has been because of the involvement of disinterested leaders who were able to change the equation, get a better choice and carry the city forward."

You can hear the complete interview at

Thursday, January 12, 2006

Highway 385 Suggests We Have Lost The War On Sprawl

County elected officials talk about the evils of sprawl, the OPD staff keeps working on planning reports and the taxpayers keep grumbling, but reading headlines ballyhooing the coming completion of Tennessee Highway 385, it’s easy to feel that the war against sprawl is over.

We lost.

The opening of the 54-mile suburban loop (if your version of suburbs includes the southwestern fringe of Fayette County) will be $450 million of fuel that will power sprawl ever eastward, increasing county government’s suffocating debt along the way. Just as its gravitational pull will extend development, it will also erode the core city and increase the pricetag that the public pays for government services.

The existence of 385 speaks to the curious nature of government and its love affair with asphalt. There’s always a seeming urgency to satisfy the needs of the development industry and to enable the flight of citizens away from areas where public investments are already paid for.

There’s almost a blind obedience to the car. Somewhere along the way, because of the power campaign contributors and road builders wield, an overriding purpose of government morphed into making people mobile at the expense of neighborhood, the urban core and the public pocketbook.

Why was Highway 385 needed? It’s hard to say with precision, because its genesis lay in the Tennessee Department of Transportation where the building industry has long driven the agenda. (Fortunately, Governor Philip Bredesen has made major progress in changing the culture of TDOT with a non-road builder as commissioner.)

For 385, there was the obligatory traffic study which inevitably shows that the growth of development demands this new road looping way out east and then up to Arlington and around to Millington. Of course, the problem is that there is no counter-balancing study on the impact on the core city or the neighborhoods that are being hollowed out. There is no fiscal note that tells the cost of abandoning existing infrastructure or the social costs of declining neighborhoods and the problems incubated there.

It’s always curious to read the blistering letters to the editor from people living in Collierville or Arlington who are complaining about the public money spent on downtown Memphis. And yet, that public investment downtown is dwarfed by the public money spent on highways to get people to move in the other direction.

In particular, Shelby County Government’s engineering department treats every project like it’s building I-40. That’s why you end up with gaudy arteries that make no sense -- seven lanes for Shelby Drive or Holmes Road. Like 385, the lanes and lanes of highways are gifts to development, and since the poor are not campaign contributors, their voices are lost and their interests too easily forgotten.

Then, too, after these gargantuan roads are built to handle the shifting traffic loads, there’s never any plan to go back to the roads that no longer handle the loads for which they were built and size them down for their current uses and to make them less unsightly.

As for 385, already, the daily traffic count is 238,710 vehicles. In the future, with much of Highway 385 serving as I-269 - the circumferential interstate for I-69 – that number will only skyrocket. For years, city and county governments advocated strongly for an I-69 route that followed the interstate through the heart of Memphis, but like water dripping on a stone, slowly but surely, development interests had the eastern I-269 route added, primarily as justification for it extending through DeSoto County and certain real estate interests.

This future combination of Highway 385/I-269 can be lethal unless Memphis and Shelby County turn their attention now to preventing more unbridled sprawl. There’s not much time. By 2008, the highway should be finished and open for traffic from I-240 near Mt. Moriah all the way to U.S. Highway 51 in Millington.

In a recent article in The Commercial Appeal, an Arlington landowner hailed the coming highway: “As every piece comes together, pretty soon, you will have something with 385 like the loop around Atlanta…Now you go up there (the Atlanta beltway), and there are hotels everywhere and apartments and office complexes by the thousands. It’s just another layer of city out there.”

Of course, that’s the problem. Unlike Memphis, the layer of city in Shelby County is not the result of population growth, but mere population movement, and as we’ve seen, the cost of that to the public sector is financially unsustainable. And even with the population growth in Atlanta, the negative consequences of the beltways there have been documented, particularly its role in shifting the majority of jobs to outside of the beltway and leaving the city center to cope with a variety of serious social ills.

Which brings us to a cogent comment by Tennessee Department of Transportation Commissioner Gerald Nicely, who recently proposed that the state should build toll roads. He suggested that the “Orange Route” beltway around Knoxville would be a good candidate.

So would Highway 385. Right now, with a $1 toll, it would generate $87 million a year, and if the commissioner really wants a formula for fairness, he would split it with Shelby County Government – which foots most of the bill for sprawl – and Memphis City Government – which is left to contend with the problems of neighborhood decline.

Wednesday, January 11, 2006

Young at Heart: Finding The Key Demographic Needed To Revitalize America's Inner Cities

Featured on today's planetizen.com are the findings of CEOs for Cities' research that are key to Memphis' continued downtown revital and our city's competitiveness in the future:

Economist Joe Cortright and Carol Coletta, host of Smart City Radio and CEO of CEOs for Cities, outline the findings of their recent report, "The Young and the Restless in a Knowledge Economy". Just how important are young people to the revitalization of our inner cities, or more precisely defined "close-in neighborhoods"? What can cities do to capitalize on demographic opportunities and stay competitive?

By Carol Coletta and Joe Cortright

One of the burning questions about the future of the American city is who will lead the revitalization of urban neighborhoods. In our recent study, "The Young and the Restless in a Knowledge Economy," we think we've uncovered a big part of the answer: today's young adults. In the past decade alone, the relative preference of young adults for central city living has increased dramatically. Compared to other Americans, 25- to 34-year-olds are now 34 percent more likely to live in "close-in" neighborhoods, up from about 12 percent a decade ago.

Close-in neighborhoods are those neighborhoods within three miles of the central business district of a metropolitan area. This three-mile circle generally corresponds to the commercial heart and densest neighborhoods in each city. In the top 50 metropolitan areas, the median population of these close-in neighborhoods is 150,000.

To understand the role age plays in neighborhood selection, we looked at the relative concentrations of young adults compared to all other citizens within three miles of the center of each metropolitan area and found that young adults were about 34 percent more likely than other metropolitan residents to live in close-in neighborhoods.

This represents a huge increase in the relative attractiveness of central neighborhoods to young adults during the 1990s. In 1980, in the aggregate, 25- to 34-year-olds were about 10 percent more likely than other Americans to live in a close-in neighborhood, and in 1990, 12 percent more likely. But by 2000, they were 34 percent more likely to live in these close-in neighborhoods. And this trend was pervasive. Between 1990 and 2000, the relative likelihood that a 25- to 34-year-old would live close-in (within the three-mile circle) increased in every single one of the top 50 metro areas.

It is plain to see that young adults tend to be disproportionately located in the center of metropolitan areas and that this pattern has intensified over the past decade.

Strikingly, there is substantial evidence linking a metropolitan area's overall level of education and the attractiveness of its close-in neighborhoods to well-educated young adults. Simply put, the metropolitan areas with the highest levels of educational attainment are chiefly those with the highest rates of young adult college attainment in their close-in neighborhoods -- cities attractive to young people, like Seattle, Boston, Chicago, and New York.

This is very good news for cities. In today's Knowledge Economy -- where prosperity hinges on the ability to invent new ideas -- cities must be magnets for these well-educated young workers. The creativity and talent inherent in a city's workforce will shape its economic opportunities. And with labor shortages looming as boomers retire, educational attainment levels flatten, and women's workforce participation rates level off, a city's ability to develop, attract, and retain young talent can mean the difference between economic success and failure.

Improving the close-in neighborhoods to which young people are already attracted is clearly one key to enticing educated young workers to come and stay. What makes close-in neighborhoods appealing? In focus groups we conducted in seven U.S. cities, we found strong preferences among young adults for dense, vibrant neighborhoods served by transit with mixed uses and active street life. They want neighborhoods where they can "stumble on the fun," as one young man put it, and find other young people like themselves, with plenty of options for things to do and people to meet.

Those cities that build the most vibrant close-in urban neighborhoods will be the ones that are most successful in attracting the most talented young workers -- an essential step for cities and regions wishing to remain competitive in today’s Knowledge Economy.

Joe Cortright, an economist with Impresa, Inc., is the author of "The Young and Restless in a Knowledge Economy", published by CEOs for Cities. Carol Coletta is president and CEO of CEOs for Cities.

Related links:

CEOs for Cities - www.ceosforcities.org

Monday, January 09, 2006

Delay & Delay, LLC, Have Ties To Memphis Through The Coalition To Build I-69

With expanding inquiries into the lobbying firms of former staff members and friends of former House Whip Tom DeLay, this post of September 26 seems even more relevant:

Another unfortunate feature of Hurricanes Katrina and Rita is that they have overshadowed the growing storm about the pattern of behavior by Majority Leader Tom DeLay.

While it seems that Rep. DeLay will be the ultimate destination in several parallel investigations, those who know the intricacies of Washington politics are unsurprised. He’s always been a man who demonstrated a keen sense of family values.

Those along the I-69 Corridor learned it firsthand. In lobbying for support for the so-called NAFTA Highway that stretches from Canada to Mexico, with Memphis as its linchpin, the I-69 Coalition annually traveled to Washington, D.C., to seek funding for their favorite public works project.

In 1995, in one of those meetings, the delegation - including members from Memphis - was elated to get a meeting with Texas Rep. Tom DeLay, who was becoming more and more powerful as the Gingrich Revolution unfolded. No state had more I-69 mileage than Texas, and his help was considered crucial, if not a deal-killer, for the approximately $15 billion project.

The I-69 Coalition was excited to have the opportunity to sell him on its project, because he had been coy in his position on the new interstate highway. His support was integral to the success of the lobbying plan drawn up by the I-69 Coalition’s powerful government relations firm, Patton & Boggs.

In the conversation with Rep. DeLay, the subject quickly turned to the finely-tuned lobbying efforts that would be needed to get the massive federal funding needed to move the highway project forward. They were pleased by DeLay’s level of interest and his advice on the importance of a well-coordinated, highly-effective lobbying effort, and he offered thoughtful advice born of his concern as a Texan who recognized the value of this economic artery through the American heartland.

His advice: hire his brother. As he explained it, because so much of the highway would run through Texas, the Coalition needed to hire someone with unique experience to handle just the Texas Congressional delegation, because its members’ approvals would be critical. One name came to his mind – Randy DeLay - because he understood Texas politics and knew Texas politicians, the group was told.

No one from the I-69 Coalition was slow on the up-take, and within weeks, the lobbying efforts of Patton & Boggs were supplemented with the talents of Randy DeLay. In the first year, he was paid about $120,000, and between 1995 and 2000, he was paid $400,000, with part of it from money (including public money) raised in Memphis by the Tennessee contingent of the I-69 Coalition. There was grumbling about the payments, because no one in the coalition could point to anything substantive that he did, except for setting up meetings with and arranging speeches by the majority leader, who became the leading champion in Congress for I-69. But in the end, there was little that the Coalition could do, if it wanted its interstate highway project.

In a case of déjà vu, Rep. DeLay encouraged a coalition of Texas border towns along the I-69 route to do the same thing, and they paid Randy DeLay $156,000 in his first year as their lobbyist. Like the I-69 Coalition, leaders of the towns grumbled, but they felt that they had little choice if the project was to move through Congress.

In the end, the I-69 Coalition probably got off cheap. As Tom DeLay rose through the ranks of his party to become majority leader, so did his brother’s lobbying fees. In the course of little more than one year, Randy DeLay went from being a bankrupt Houston lawyer and restaurateur to a Washington insider making $550,000.

In the ensuing years, when his brother was hired to represent a Mexican cement company, Rep. DeLay called for the Clinton Administration to reverse an anti-dumping order so the companies could sell their cement in the U.S. without paying a duty.
When Randy DeLay was hired to block the move of the Houston Oilers to Nashville, his brother actually sponsored an unsuccessful Congressional bill calling for the federal government to block the move of a football team. When Randy DeLay was hired by Union Pacific railroad in support of its merger with Southern Pacific, his older brother spoke out and worked in favor of it.

In scenarios strikingly similar to the experience of the I-69 Coalition, Randy DeLay was hired specifically to give special attention to the Texas Congressional delegation, a delegation controlled by his brother.

After ethics complaints were filed against what came to be viewed as DeLay & DeLay, LLC, Randy DeLay seemed to go underground for awhile, but recent revelations indicate that the behavior of his brother didn't stop. It just involved loyal friends like Jack Abramoff, Michael Scanlon and Ralph Reed in their shameless rip-off of Indian tribes with high-dollar lobbying contracts.

Sadly, all of this was the worst-kept secret in the Capital, and few eyebrows were raised about the Abramoff headlines, media reports about $500,000 in payments over four years to his wife and daughter from his campaign fund for undefined work and the indictments of his aides in Texas for campaign fund abuses.

And yet, Randy DeLay is back, working more quietly in Texas selling himself as his brother once sold him to the I-69 Coalition – as someone who is uniquely qualified to get things done with the Texas delegation. Once again, local officials are paying one brother to lobby the one they also pay to represent them in
Congress. Most public officials who hire Randy DeLay continue to treat his contract as an insurance policy to make sure they get their best chance at expensive pork projects from channel dredging, bridges, and prisons.

Those who’ve been given advice to hire a Washington lobbyist who knows how to get things with the Texas delegation know first hand that Rep. DeLay deserves his nickname, Hammer. It’s just looking increasingly likely that this time he’s the one about to be nailed.

Thursday, January 05, 2006

The BioWorks Foundation Offers Important Lessons in Economic Development

When Steve Bares talks, we should listen.

As head of the Memphis BioWorks Foundation, he is making things happen, effectively and methodically creating a major new industry for Memphis’ future.

That’s why his recent comments to The Commercial Appeal about a study of 50 cities caught our eye. While others were crowing about the study results that said Memphis is a “good deal” for biotech companies, because we ranked as the seventh least costly place for biotech companies to operate, Mr. Bares kept his eye on the ball.

Yes, low operating costs are a factor in attracting companies to Memphis, but he cautioned, “You can’t win by being the cheapest. You take the compliments where you can find them, but it’s going to take more than that to compete.”

For example, he explained, a city can be a cheap place to live, but that doesn’t mean people will move there, because it must have a quality of life that attracts new jobs, new people and new companies.

“We can’t compete by cheapest alone,” Mr. Bares said. “It is filling that gap…providing the infrastructure, the workforce and entrepreneurship…that’s the hole we have to fill.”

Halleleujah. Now that’s one of the most enlightened comments we’ve heard in months about what should be the economic development priorities of the Memphis region.

Most impressively, this is not just rhetoric. The BioWorks Foundation has based its vision, its plan and its action on lofty ambitions, and most importantly, on creating a quality city, quality workers and quality facilities. In this way, it’s one of the rarest organizations in a city that historically sells itself proudly on how cheap we are, how cheap our labor is and how cheap our land is.

Sadly, the cities that are succeeding in today’s highly competitive global economy are doing just the opposite. They are making investments in quality -- better workers, high-quality universities, an enriching quality of life and efficient, economical public services.

If we continue to sell ourselves on our cheapness, it is a race to the bottom. There is no way that as the global playing field becomes flatter and flatter that we can be cheaper than third world nations.

Our competitive edge must be based on a highly-skilled workforce and an infrastructure that links our businesses efficiently and seamlessly to the global marketplace.

It not a coincidence that the most expensive U.S. biotechnology cities in the study were San Jose, San Francisco, Middlesex/Somerset/Hunterdon, NJ, Princeton, NJ, Boston, New Haven and Philadelphia, are also leaders in the biotechnology industry. They are leaders because they invest in quality and workers and companies want to move there.

The cities sharing top billing for their cheapness with Memphis are Sioux Falls, Shreveport, Norman, OK, Birmingham, New Orleans and Indianapolis. That doesn’t sound like the list of peer cities that we want to be included in, and our pride in being in such a list taps into a feeling of unworthiness that undergirds much of our civic psyche.

That feeling is thankfully not part of the BioWorks Foundation, and although it’s best known for imploding the old Baptist Hospital, it has quietly developed the most impressive business vision in Memphis since FedEx was created.

In staking out Memphis’ claim to the biotech industry with its companies valued at $225 billion, the way that the Foundation is doing its work also offers lessons to our economic development experts. Rather than the BioWorks Foundation is leveraging our city’s unique strengths to create a distinctive niche for the future. Among those strengths are our position as leaders in orthopedics and musculoskeletal implants, St. Jude Children’s Research Hospital and FedEx and its place as the inventor of global commerce.

And most of all, the BioWorks Foundation – unlike many cities - resisted the temptation to build the future on a green field policy. Instead, it chose to transform the old Baptist Hospital site into a world-class research park in an urban setting. The Foundation opted to stay in Midtown, where it founded the Memphis Academy for Science and Engineering, where it has supported the redevelopment of Lamar Terrace, where it has partnered in training programs with Southwest Tennessee Community College and where it has joined with University of Tennessee Health Sciences Center to attract major national grants and to commercialize research.

When completed, the economic impact of the biotech district is projected to be about $2 billion and create new jobs at all skill and pay levels. And most of all, it’s doing it by selling Memphis as a quality place to live and work, and that may be the most important product of all.

Tuesday, January 03, 2006

PILOT Program Overhaul Deserves Renewed Council Commitment

It’s becoming evident that taxpayers may have missed their best chance for getting control of tax freezes when Memphis Councilman Tom Marshall’s motion to implement immediately the recommendations of the study on tax freezes went nowhere in City Council. It seems that in the intervening weeks, as often happens, the Council’s resolve is dissolving in the face of withering lobbying by the development industry.

So, before political dynamics obscure the crux of this important issue, let’s recap a few highlights of the comprehensive report about the PILOTs (payment-in-lieu-of-taxes given out chiefly by the Center City Revenue Finance Corporation and the Memphis and Shelby County Industrial Development Board).

Here’s just a few sentences from the report:

• The idea and process of preparing an economic impact analysis and evaluation matrix as the sole measures of whether to grant a PILOT should be abandoned.

• A general and very flexible framework, based upon business and market criteria, should be developed.

• The PILOT award should be based on each project’s own merit and should not be confined to an annual PILOT award budget.

• The onus of responsibility of justifying the need for public assistance for each project should be shifted to the private sector.

• The matrix approach to awarding PILOTs should be abandoned and replaced by a “but for” test or the true economic need of a project.

• The City and Shelby County should create an overriding policy to include: 1) what types of businesses should be attracted, retained and thereby induced via public investment; and 2) where these businesses should be encouraged to locate and invest to achieve the greatest social benefit.

• The PILOT program alone cannot solve every issue. Memphis/Shelby County needs to develop more economic development tools.

• A standard project will not fit every situation. Each project should be negotiated individually and individual business terms should be set forth.

• The PILOT program needs refocus on different evaluating criteria and provide more flexibility in the program such that it can be more appropriately targeted and used to better leverage private investment in the community.

• The current contract language does not substantively protect Memphis/Shelby County’s downside risk of the potential move of operations.

• PILOT monitoring is on an honor system. The PILOT recipients basically self-audit. There are no controls in place to ensure that the information reported by the company is accurate.

Any one of these points is reason enough to retool the PILOT program of the Industrial Development Board and Center City Revenue Finance Corporation, but taken together, they paint the picture of a program that is clearly out of touch with economic development realities and with the opinions of taxpayers who have to make up the gap in property taxes that are waived for any company that can fill out the PILOT application form.

With about $60 million in waived taxes, it seems clear that any checks and balances that were supposed to be in the system have vanished. The outrage by the City Council that greeted the report on the PILOT program has waned, and its members are likely to brush off the report’s recommendation for it and the Shelby County Board of Commissioners to become the approving bodies for the tax freezes. There is talk too about ignoring some of the other key recommendations of the report.

One City Councilman began the year with an apology, and let’s hope that we won’t deserve another one because the Council fails to implement the much-needed changes to the tax freeze programs.

And if the conclusions of the 97-page report are not compelling enough to motivate Council members, let’s hope they keep in mind the advice in The Commercial Appeal from Tom Jurkovich, the director of Nashville Mayor Bill Purcell’s office of economic and community development. He said it best: “Incentives should incentivize. Once it becomes an entitlement, it’s no longer an incentive.”

That’s a sentiment worthy of becoming the Industrial Development Board and Center City Revenue Finance Corporation’s new slogan once the PILOT program is overhauled.