Tuesday, February 21, 2006
The Present PILOTs Program Is All About Missed Opportunities
Sometimes, when the spirited defense of the current PILOT program begins, it seems to lose touch with reality.
In the consultant’s report recommending the overhaul of the current tax incentives program, this is what’s written on page 57 in defense of the $60 million worth of tax freezes:
“During the interviews, general benefits of the PILOT Program were discussed. Such benefits include the following:
“1 - FedEx Corporate Campus – fueling Memphis’ economy. The PILOT program helped make Memphis an attractive place to do business and help secure high paying professional jobs. In addition, FedEx campus has stimulated significant growth in the immediate area of the FedEx campus in terms of retail, hotel, and resident development.
“2 - PILOTs help fill vacant properties which, if left vacant, would simply ‘pull down’ the market values of surrounding properties. This could have a cumulative effect, which could ‘pull down’ the broader tax base, which could potentially require an increase in property tax rates to maintain local tax revenues at the same level.”
Amazing. Just amazing.
If there is a more striking indictment of the failure of vision in this community, it is the area of the FedEx World Headquarters. There, we had major expansion by the company that invented global commerce, by the company that is the state’s largest employer and by the company that is the hub of innovation for Memphis and Shelby County. We had the chance to transform the area into one of the nation’s premiere business centers - complete with technology centers, research firms and first class office space – by exploiting the interest of all the companies drawn by FedEx’s gravitational pull.
Instead, we chose to allow the area to become just another generic, derivative area unlike what is found off most exits of I-40 and Tennessee 385.
If defenders of the PILOT program can brag about how the FedEx corporate campus fueled Memphis’ economy, it can only serve as further indictment of the thinking that gave birth to the tax freezes program as it now exists.
The area around FedEx is all about missed opportunities. So is the PILOTs program.
Surely, if we should have seized just one chance to shape a singularly powerful economic anchor for our region, one that could have come to symbolize the vibrancy of Memphis, it should have been the area of Hacks Cross and Winchester Roads.
So what did our lack of vision bring us? A FedEx World Headquarters surrounded by suburban shopping centers; a concentration of big box retail – Costco, Wal-Mart, Target, Lowe’s, Sportsman’s Warehouse and Sam’s Town; at least 31 restaurants (we lose count), an impressive array of fast food and chain places; the hotel - a Holiday Inn Express; two cell phone stores; cash advance stores; an uninspired Starbucks; Michael’s; PetSmart; Walgreen’s; and, well, you get the picture.
In case you missed the big news, the Shelby County Board of Commissioners has paved (pun intended) the way for a new Nissan dealership to be added to the mix.
At the intersection that should have been Memphis’ prime location stands a drug store, a gas station and a bank.
Also, proponents of the PILOTs told consultants that the tax freezes help fill vacant properties. Again, it’s as if they don’t drive around in this county. While there is warehouse after warehouse in Southeast Shelby County (with most not paying taxes), there is nothing that the PILOTs program has done to revive the multi-modal centers that stand along I-55 between I-240 and Riverside Drive as sad reminders of the abandonment of the urban core.
These are the facilities that were once thriving hubs of activity for Memphis’ distribution industry, but instead of giving incentives to keep them healthy and to optimize the existing infrastructure already paid for there, PILOTs were used as incentives for green field development of the distribution business. These vacant rail and truck yards are stark proof that the PILOTs program, as it now exists, is all about real estate development, not economic development.
Posted by Smart City Consulting at 7:07 PM