Friday, June 30, 2006

The Vanishing Middle Class

Memphis is hollowing out.

That’s the conclusion of research by the Brookings Institution.

Earlier this week, we suggested that Memphis Mayor Willie W. Herenton read research about Memphis instead of relying on political insiders to convince him that their pet projects (think tax freezes) are the only things that keep our city from oblivion.

The recent report on middle-income neighborhoods would be a good place to start. While the Brookings Institution painted a trend that is hollowing out of U.S. cities, few did worse than Memphis.

It’s a conclusion that indicates more and more that our city is becoming a city of extremes – the rich stay because they can afford to live anywhere and the poor stay because they have no choice. It’s the middle income families that are voting with their feet and it’s a mandate of discontent.

The percentage of middle-income families in the largest 100 metros in the U.S. fell from 28 percent in 1970 to 21.5 percent in 2005. Meanwhile, the percentage of middle-income neighborhoods fell from 58.2 percent to 40.9 percent over the same period of time.

In Memphis in 2000, 19.9 percent of families were middle-income and 29.7 percent of neighborhoods. In fact, in the list of 100 largest metros, Memphis was 88th in the share of middle-income families and 98th in neighborhoods.

The report concludes that we are witnessing a shrinking proportion of families with middle incomes and an even faster decline in neighborhoods with middle income character. It is a polarization that could ultimately create greater political conflict and spirited competition for scarce resources.

While City Hall may be focused on preserving the largesse of the local PILOT program, a widening disenchantment with city services and a growing feeling that no one is in charge are driving more and more people to make the decision to leave Memphis.

The 2005 Memphis Poll is instructive in this regard.

Heading the list of concerns is crime protection, with 85 percent of the public saying it is government’s highest priority. Undoubtedly, that percentage could only have climbed after this week’s killing fields.

In 1996, only 18 percent of Memphians said they were concerned about gangs and crime in their neighborhoods. It had climbed to 30 percent in 2005.

Meanwhile, the falling confidence in City Hall is reflected in other indicators, such as the perception of parks. Four years ago, the perception was 86 percent positive. Today, it’s 72 percent. As for the physical condition of neighborhoods, only 10 percent were concerned in 1993, but that has climbed to 28 percent in 2005.

It seems obvious that it will take something dramatic to convince an increasingly cynical public that city government can be transformed. But it could begin by making Memphis a city of choice for the middle class.

Wednesday, June 28, 2006

College-Educated, Young Adults Consider "Place" First

This news release on some landmark research by CEOs For Cities seems especially pertinent today, with Memphis Mayor Willie W. Herenton saying that our city has to keep giving away tax freezes to counter the exodus of people from Memphis. We don't know how he connected those dots, except for the anecdotal evidence given to him by real estate developers on whom he seems to place such reliance for economic development advice. Hopefully, he'll actually ask some of the people on the move, because their responses could be instructive to him as the city's chief executive.

Surely, it goes without saying that people moving out of Memphis don't really have top of mind the tax freezes handed out by the IDB as a consideration in their move, except as a negative, since they cause the tax rate to climb and create a disincentive for anyone to stay inside the city limits. As a true believer in tax freezes, Mayor Herenton can double the number of them given out, but they'll have no effect on the movement of people from Memphis if nothing else changes. Rather than giving away money, city government needs to be making Memphis to create a better, safer, more competitive commmunity, because, as shown by this definitive research, the returns on these investments are crucial to the city's future.

Rather than concentrating on tax freezes, we can only hope that Mayor Herenton will take the time to read all of the reliable research about why people are moving and what he could be doing about it. All that the give-away program of the IDB does is give city government less to spend on basic services like police and law enforcement, and those are the things that have people voting with their feet. Meanwhile, we mindlessly dole out tax freezes as entitlements to low-wage employers who institutionalize our workforce development weaknesses. Now that's what our mayor should really be working to correct, and a first step is to reform and revamp the self-defeating PILOT program that is now in place.

Here's the release:

– Job opportunities are secondary, but cities must get the “basics” right –

Chicago -- Two-thirds of highly mobile 25- to 34-year-olds with college degrees say that they will decide where they live first, then look for a job, according to a new survey commissioned by CEOs for Cities and conducted by The Segmentation Company, a division of marketing consultancy Yankelovich Inc.

The survey follows the December 2005 report by CEOs for Cities titled The Young and Restless in a Knowledge Economy, which warned urban leaders to attract and retain college-educated workers to compete in the knowledge economy. A city’s best chance to attract these workers, the report said, is to focus on the most mobile of the group, those 25 to 34 years old.

The survey marks the first time that the preferences of this highly coveted group have been quantified. The results are based on online surveys of 1,000 25- to 34-year-old college-educated men and women from diverse backgrounds and geographic locations conducted March 3-11, 2006.

“The December report confirmed that college-educated 25 to 34 year-olds are critical to the success of cities,” said Carol Coletta, president and CEO of CEOs for Cities, a national network of urban leaders. “These new data tell us what they value and how they make decisions about where they choose to live.

“When you look at trends, such as the influence of women in the workforce, the fact that technology advances allow people to stay connected from virtually anywhere and that people are less loyal to companies, these numbers make perfect sense,” Coletta added. “This freedom has made place much more prominent.”

Key findings included:

• Two-thirds of college-educated 25 to 34 year-olds choose place before job, and this preference was true across all life stages and genders (male, female, single, married, with children, without children).

• Women place greater emphasis on the location decision than do men, although a majority of men also say they choose place before job.

• Basic quality of life issues (clean and attractive, can live the life I want to lead, safe streets and neighborhoods, can afford to buy a home, lots of parks and green space) ranked highest among attributes that young people looked for in a city.

• A place that feels welcoming, offers professional opportunities, has reasonable commute times, access to excellent schools, is a great place to raise children, is a place people are proud to say they live in were among attributes young people looked for in a city.

• Lifestyle attributes are also important to this demographic. They prefer places where they can connect with others and have meaningful social interactions; that are interesting and diverse; and are environmentally responsible.

• Young adults have a strong inclination to live downtown or close to downtown.

• Knowledge of city attributes is limited. When asked where they would like to live, respondents were quick to answer. But when asked why, their reasons were vague.

• Young adults rely most heavily on personal stories from friends and family to form their perceptions about a place. They also use the Internet and personal visits to shape their opinions.

“The good news for urban leaders is that these findings point to actions that they can take to make their cities more desirable to this demographic,” said Meredith Gilfeather, who directed the survey for Yankelovich.

Opportunities for urban leaders to attract and retain this desirable demographic include:

• Take care of the basics – Make sure your city is clean, green, safe and inviting. The basic functions of government such as trash collection and keeping parks maintained and litter off the streets will go a long way to bringing and keeping people. While it is not the only factor, a city that doesn’t take care of the basics will likely be dismissed or overlooked by this demographic.

• Make it easy for young people to reach their aspirations and goals – Young people are the most entrepreneurial in America, so foster their want for personal and professional success by, for instance, naming a talent czar who guides entrepreneurs through the process of starting a new business in the city. The aura of opportunity is very powerful.

• Highlight your downtown and close-in neighborhoods – Young people are 30 percent more likely than other Americans to live within three miles of a city’s center. This percentage has been increasing since 1980 (and dramatically since 1990) in each of the top 50 metro areas in the U.S.

• Develop a compelling narrative about your city. Because young people have only vague notions of what a city is like, this poses an opportunity for a city to define and brand itself and market that image to young people. But don’t promise something that can’t be delivered. And don’t settle for a tagline, logo or slogan to do the job.

• Work with local stakeholders to build a dynamic web presence that is appealing to tech and design-savvy young people and that accurately portrays your city’s narrative.

About CEOs for Cities
Dynamic cities drive America’s global economic competitiveness. That’s why CEOs for Cities was founded. It’s a network of mayors, corporate CEOs, university presidents, foundation officials and business and civic leaders from the nation’s leading cities. With research and its urban innovation consortium, CEOs for Cities provides its members with special insight into the challenges that matter to the success of cities and the new partnerships and thinking required to find innovative responses.

About Yankelovich Inc. and The Segmentation Company (TSC)
Yankelovich delivers measurable breakthroughs in marketing productivity for its clients. For more than 30 years, The Yankelovich MONITOR¨ has tracked and forecasted consumer value and lifestyle trends. Our Insights Integrationsm solutions directly link our key research findings on why people buy to databases of customers and prospects.

The Segmentation Company is a full-service custom research and consulting firm that helps clients precisely target their customers through segmentation and brand equity and positioning work. Yankelovich and TSC are headquartered in Chapel Hill, NC.

Monday, June 26, 2006

The Magnetic Pull Of FedEx Is The Most Powerful Business Incentive For Memphis And Shelby County

Would someone in city or county governments please buy copies of the current issue of Fast Company for members of the Memphis and Shelby County Industrial Development Board?

While you are at it, mark the article, “Rise of the Aerotropolis,” which tells of the airport-cities that are being created around the globe. It’s an article of special interest to Memphis as world headquarters for FedEx, the corporation that invented global commerce as we know it.

The article makes some graphic points:

· Over the past 30 years, the value of air cargo has risen 1,395 percent, compared to the GDP’s increase of 154 percent and the value of world trade’s increase of 355 percent.

· Today, 40 percent of the total economic value of all goods in the world and 50 percent of American goods are shipped by air.

· Virtually everything associated with the value-added economy – technology, pharmaceuticals, medical devices – is transported by air.


The aerotropolis is a new thrust for urban planning in several world cities, notably Asian ones, where rather than banish airports to the outer reaches of cities, airports are moved to the center where cities are built around them. American cities are seen as falling behind in the development of these centers, because of our NIMBY sensitivity and zoning restrictions.

But perhaps, just as FedEx created world commerce, it can create a new future for the area around Memphis International Airport as a competitor for the aerotropolises developing in Tokyo, Hong Kong, Bangkok and Dubai. Rather than becoming a force driving sprawl like it is in these places, perhaps the distinctive U.S. brand of the airport-city could be invented here in Memphis.

According to the article, Memphis already has a rudimentary version of the aerotropolis along with Dallas and Ontario, California, with Denver and Detroit planning developments right now.

Architect of the aerotropolis concept is John Kasarda, a University of North Carolina business professor, who sees it as the logical evolution of globalization writ within a city context. While parts of his crystal ball forecasting into the future conjures up the unfeeling, robotic, gray world captured in so many apocalyptic films where people become mere dispensable cogs in the unrelenting global economic machinery, a uniquely American version of the aerotropolis is not only possible, but preferable to those in far flung parts of the globe.


But what does this have with the IDB? Here’s the part that made us think of tax freeze policies.

The article says that “the closest thing to an aerotropolis in America today is Memphis International Airport, home for 25 years to FedEx,” adding that Memphis has led the world for 14 years in a row as the airport with the most air cargo, outdistancing powerhouses like Amsterdam and Tokyo.

Delivering the Memphis Regional Chamber’s sales pitch for it, Fast Company points out the distinct advantages of being located in Memphis where companies have midnight or 1 a.m. drop-off deadlines for FedEx, compared to 9 p.m. on the East Coat and 4 p.m. on the West Coast.

In a nation too often defined by a bi-coastal perspective, Memphis has a competitive advantage unmatched in the world – FedEx’s drop-off deadlines and the extra hours of production given to companies here.

Proximity Matters

Joe Ferreira, FedEx’s managing director of hub-area business development, is quoted in the article as saying that she “routinely juggles the requests of as many as 40 to 50 companies jockeying for space around Memphis and smaller hubs.”

“Proximity matters more and more to them,” she says, and Memphis offers an ideal combination of inexpensive, semiskilled labor, acres of turnkey warehouse space and the junction of three states all fighting for their business.

“But the biggest driver,” Ferreira says,” is the growing urge that when we want something, we want it now. And as soon as one company relocates here or to any of our hubs, the next thing that happens is that three or four of its competitors come calling.”
Fast Company says that “while Memphis might qualify for a proto-aerotropolis, with the FedEx hub providing just enough gravity to keep its customers from spinning out of orbit into Mississippi or Arkansas, few other American cities are even remotely ready to build their own analogues.”

Magnetic FedEx

So, once again, we’re told the obvious: FedEx is the ultimate economic magnet for Memphis. Its gravitational pull attracts smart companies that understand that by locating here, they get a competitive advantage found nowhere else, the competitive advantage of a longer, direct connection with the global economy made possible by the inventors of overnight air cargo delivery.

So, with this unmatchable competitive advantage, the obvious question for the IDB is why is it still handing out tax freezes as if we aren’t good enough to attract business otherwise?

Thursday, June 22, 2006

Debate FedExForum Reality, Not Mythology

The current controversy about the FedExForum garage is quickly becoming about more than why plans were changed and how $6.3 million in federal funds were lost.

There are resurrected questions about the contract between Memphis and Shelby County Governments and the Grizzlies. There are shots taken at owner Michael Heisley by fans made mad by some of the team’s mistakes in the care and feeding of its customers. There is the expected political distancing by elected officials who were there and voted for the contract for the new arena.

All of this smoke runs the risk of obscuring any light that can be shed on the spark that ignited the fire in the first place – $6.3 million that was not spent in compliance with the guidelines for the federal program where the money originated before being channeled through Tennessee Department of Transportation.

That said, we’ll wade in any way. When our friends at the Memphis Flyer editorialize that the contract with the NBA team was “one-sided” and a “Faustian bargain,” it just feels like mythology is replacing reality when it comes to the history of the project.

Looking Back

So let’s rewind the tape.

Back in 2001, some of Memphis’ most directly engaged, civic-minded business leaders learned that there was a chance to land a professional basketball team in Memphis, a fulfillment of this city’s long-held dream and the antidote to the beating that our civic ego had taken in pursuit of the National Football League.

They heard that the Vancouver Grizzlies was looking to move. They contacted Michael Heisley, not the other way around, to ask if Memphis could be considered. Like it is in the world of professional sports franchises, there’s no warm, fuzzy feelings that lead a team to move to a new city. It’s nothing but clear-eyed financial benefit, frequently expressed in the public commitment to provide an NBA-quality arena that can be a revenue center to help make the absurd business model of the NBA work.

There is nothing unique about this, because Memphis’ experience is consistent with what happens in almost every city. (It’s worth noting that the team and the so-called local NBA pursuit team weren’t even demanding a new arena, because they were prepared to have The Pyramid upgraded to NBA standards. That’s when it was suggested by the county mayor, not Mr. Heisley, that for slightly more, a new arena could be built.)

It’s worth remembering another often forgotten fact these days: Memphis was competing with another city for the Grizzlies, and so Memphis and Shelby County weren’t just negotiating against the Grizzlies, but negotiating against a rival city.


From the beginning, negotiations between city, county and the Grizzlies were testy and emotional. At their first meeting, the Grizzlies laid out their requirements to move to Memphis. Local government didn’t respond to their list and instead presented their own list of demands. The team’s negotiators left the room to talk, and quickly walked out of the building and flew out of Memphis.

No one in the halls of government panicked and got on the phone to put things back together. City and county negotiators, of which I was one, had made a list of “deal breakers” that were nonnegotiable. Failure to agree on any of them would collapse the talks from the public side. So, when the Grizzlies walked out of the room, Memphis and Shelby County Governments concluded that it saved them a lot of time, because it didn’t look like the team would agree to the public conditions any way.

Through the mediation of a third party, the teams were reassembled to see if there was a way to restart the negotiations. Again, city and county negotiators listed their deal breakers, and over the next month, one by one, they were accepted, but not without the charges and countercharges that are part of any negotiation. Eventually, the big issues that had been deferred while the others were addressed were essentially all that was left: the Grizzlies paying the operating losses for the new arena and the team making a long-term commitment to stay in the arena and in Memphis.

Local government had been told by pro sports consultants and colleagues in other governments that a city our size would not win these two key concessions, and frequently, it looked as if they would kill any chances for a contract.


It was in the context of the Grizzlies’ accepting operating losses – estimated now at upwards of $5 million a year – that the non-compete clause was put on the table. No one with any business sense – much less an NBA team owner - would take on the obligation of paying the operating costs and not look to protect their downside in the form of competition from other buildings that could easily undercut rental rates for the newer, more expensive arena.

It was a lesson that city and county had learned painfully when The Pyramid opened without closing the Coliseum. That old arena – already paid for and with no official concessionaire or parking company – was adept at underbidding the newer building, accomplishing nothing so much as driving up the operating subsidy of The Pyramid year after year and putting more money in the pockets of promoters.

It was thought in 2001 and it’s still the case today that it’s in the long-term best interest of taxpayers for FedExForum to succeed, and in that vein, the non-compete clause was agreed to in return for the Grizzlies taking on the operating losses. In other words, the option was for taxpayers to pay more than $5 million a year for the operating deficit of the building, and it would probably have been higher. After all, sponsorships and advertising agreements are skills that government doesn’t possess and or ill-equipped to perform or oversee.

So, the cost of eliminating the non-compete clause would have been more than $5 million for the Forum, about $2 million for the operating deficit at The Pyramid and the $1 million deficit at the Coliseum. In other words, local government could have taken on a total of $8 million in operating deficits and all so promoters could make more money from their events.

That said, negotiators on all sides understood that the noncompete clause was not intended to block events from coming to Memphis, only to give the Forum first option to make them work there. That the Grizzlies took the position most advantageous to them in interpreting the contract should surprise no one, but over time, the application of the non-compete provisions are settling into the philosphy of the negotiations.

Debating The Merits

While it’s never out of bounds for people to question the public benefits of the arena project, or whether this is the best use of $250 million or whether research proves that professional sports underdeliver as an economic engine, the malignant notion that city and county governments simply agreed to whatever the Grizzlies demanded is just wrong.

As for the financing of the arena – which the Grizzlies had no part in developing (like the garage funding, they didn’t care where it came from, as long as they got the facilities built), in retrospect, it seems clear that the financing would have been better if it had not included PILOT payments from MLGW.

That said, lost in the fog of opinions is this fact: the preponderance of the financing on the arena come from user-related fees like the sales tax rebate from NBA events and the arena's seat use fee and from sources like the Tourism Development Zone that only could have been spent on an arena or convention center.

In other words, it’s a fair discussion to debate whether the political and civic leadership should have spent their energies pursuing the team and building a new arena, but keep in mind that the vast majority of the revenues paying for FedExForum could not be spent on anything else.

Looking back, a number of letter writers seem to believe this project was rammed through the public process with little public support for it. It’s worth remembering that the publicly-funded poll demanded by arena opponent Commissioner Walter Bailey, to his dismay, showed that a majority of people in this county supported the arena financing plan.

The Power Of Rhetoric

As we say, there is room to debate the facts, and there is the obligation to get the answers about how the Forum garage plans were changed without federal approval and in violation of the federal regulations.

But hopefully, we can keep in mind that if the Mud Island experience taught us anything, it is that we have the power to make FedExForum a failure. It happened to Mud Island on the day long ago when the Memphis City Council, putting distance from the project they had approved, called it a failure. From that day on, it was.

Let’s investigate the garage controversy until full accountability is reached. Let’s debate the public value of professional sports. Let’s discuss whether local government has its priorities wrong.

Let’s just try to remember that we won. We got the professional sports team that we had sought for more than 20 years, we got a long-term commitment from it to this city, we got it to pay the considerable operating losses of the new arena and we did it with no larger percentage of property taxes in the Forum project than city and county governments put into AutoZone Park.

Tuesday, June 20, 2006

Abandoning Incentives Of The "Old" Economy Like Tax Freezes

Dell Inc. is expanding its Nashville operations by as many as 1,000 employees, adding to 3,500-person workforce that has grown there since the computer giant started its $200 million Middle Tennessee operations in 1999.

For the new employees, Dell will receive $500 a year for each job from Nashville-Davidson County Metro government.

Meanwhile, back here at home, little has changed as our community’s overreliance on property tax freezes continues, resulting in aberrations that show just how smart Nashville has been in refusing to build its economic development program by selling the city at a discount.

In Nashville, Dell gets $500 for each job.

Here, we are preparing to pay $1,718 for each job created by NuVasive at its distribution center for surgical kits. In addition, we’ll also pay $843 for each job created by Knox St. Clair at its distribution and light manufacturing site for its interior doors and windows for construction projects.

Lower Than Average Salaries

That’s what we’re paying as a result of the Industrial Development Board for both of these companies, a fact made even more remarkable by the fact that neither will pay salaries that reach the average income in Shelby County.

NuVasive’s jobs will pay an average about $32,000, about six percent lower than the average per-capita income in Shelby County. Knox St. Clair’s jobs average $22,880, 33 percent lower than the per capita income in Shelby County, qualifying its workers for food stamps on their first day on the job.

Let’s ask it this way. If you were investing your money, what would you think is the smartest investment:

• $500 in Dell Inc.

• $1,718 in NuVasive

• $843 in Knox St. Clair

It’s no different for our city and county, because the IDB is in effect directly investing our money into these companies. Therein lies the problem. There is no sense by the IDB that tax freezes are public investments.

Tax Freezes

That’s why we admire Nashville for resisting the Siren’s call of tax freezes. Yes, they are attractive: they are easy, they aren’t generally understood by the public and economic impact studies can interpret them in ways that make them look grandly successful.

Nashville, on the other hand, in a 10-year period, only approved five tax freezes. Meanwhile, Memphis and Shelby County were handing out 415 tax freezes. In other words, we were approving in six weeks the same number of tax freezes that Nashville was approving in 520 weeks.

About 20 years ago, Memphis and Nashville were roughly in the same place. Both had ambition and expansive ideas. Both were trying to sort out and prepare for competitive position in the coming economy.

Nashville went one way. Memphis went another.

In Nashville, they were mindful of sending a message about quality government, quality of life and quality of public investments. They set out to execute “quality strategies” that would make them a magnet for young workers and skilled jobs. They identified the key public investments that could make this happen. They rejected the notion that they had to waive taxes to get companies to move there.

Transparent Business Incentives

Nashville remains resolute in its approach. Dell, for example, is the world’s largest personal computer maker, and yet, Nashville didn’t give it a tax freeze. Instead, it gives the company $500 for every worker in the city, a business incentive that is transparent and easily understood by the public.

If anything, Nashville’s approach to economic growth has been anchored in flexibility and opportunistic thinking, adjusting and recalibrating to take advantage of the new realities of the new economy.

Memphis, meanwhile, seems stuck in the economic development programs of the 1980s, continuing to depend on tax freezes, cheap labor and cheap land. Perhaps, you could argue that the philosophy may have made sense 20 years ago, but it’s more and more irrelevant in today’s economic development environment.

A few years ago, the director of economic development who staffed the IDB was asked to show how successful the board was in creating economic growth. He quickly cited the growing numbers and amounts of IDB tax freezes. It was as if the tax freezes themselves were the desired outcomes. It’s no wonder that they have become entitlements in the minds of many.

In truth, the greater indicator of success by IDB would be in weaning its dependency on waived taxes to lure business. Today, the amount of tax freezes amounts to about 7.5 percent of the total tax revenues of city government. Meanwhile, they add to the significant percentage of property that doesn’t pay taxes at all - 29 percent of the total land area in Shelby County is tax exempt.

Counterintuitive Policy

In the end, throwing money at companies to convince them they should love us is not only poor public policy, but it is counterintuitive, stimulating higher tax rates that choke off the small businesses and new entrepreneurs that create most jobs in the first place.

For too long, we have spent our time trying to identify specific industries that should be our economic development targets. What would pay greater dividends is to target the ingredients that produce a culture of economic growth – entrepreneurship, talent and innovation.

Rather than give away taxes, the better question for our community is how do we reform our tax structure to lower taxes as a economic stimulus and how do we make wiser public investments that do the same.

Sunday, June 18, 2006

Memphis' Agreement With Grizzlies Trumps Nashville's Negotiation

It is the fundamental nature of negotiations that they are always susceptible to second guessing by anyone not involved directly in them. That’s the case whether the negotiation is for the sale of a business or for construction of a new arena for the Memphis Grizzlies.

That’s because negotiations are always about give and take, and perhaps the best indicator of a successful one is when both sides walk away somewhat unhappy, because both sides have compromised in what they had hoped to get.

It is because of this fact that it’s easy for us to look at an agreement in the cold, dispassionate light that distance and time gives us. While this is easy enough to do when second guessing our brother-in-law’s purchase of a company, it’s a given when it’s an agreement negotiated within a political environment.

So, it should be no surprise that the recent controversy about the New Arena Public Building Authority and Tennessee Department of Transportation misleading federal highway officials to qualify for $20 million in federal funds has sparked renewed complaints by some that Memphis and Shelby County Governments gave away the store to get the Grizzlies in the first place.


Now, five years after the city and county signed their agreement with the Grizzlies, we all are blessed with 20-20 hindsight. What’s not so easily remembered now is that our political and business leaders had sought a professional sports team for decades, and there was general consensus that our best bet would be a franchise with the National Basketball League.

In the face of this consensus was the stark reality that in negotiations with the Grizzlies, Memphis would be trying to convince the team to move to the smallest (some NBA executives said weakest) market for a team.

Despite all this, city and county staffers who negotiated the contract with the Grizzlies had a list of “deal breakers.” If the team refused any one of them, the public sector planned to break off the sessions in keeping with the first rule of negotiation: if you’re not prepared to walk out, you shouldn’t ever walk in.

On the deal breaker list was the city-county’s demand for a long-term contract with severe financial penalties for early termination if the team left before the term was reached. There were about five other deal breakers on the city-county list, but none had greater importance than this: city and county government wanted the team to pay all operating expenses for the new arena.

Toughest Negotiation Point

It was expected that the Grizzlies would object strenuously to this requirement, and the team did. On several occasions, it appeared that this single item would keep an agreement from ever being consummated. From the team’s perspective, they were already taking big risks in relocating to Memphis and wanted to protect themselves from additional losses. City and county, on the other hand, understood fully the political benefits of winning this single point and also avoiding the yearly political spectacle of budget hearings on the subsidies.

In the end, however, the Grizzlies blinked, agreeing to pay the yearly operating deficit for its new arena. It was the single most important concession won by city and county governments in their negotiations with the Grizzlies.

After all, 210 miles up I-40, Nashville turned over management of its arena, the Gaylord Entertainment Center, to the owners of its NHL team – Predators – and also agreed to pay its operating deficits.

All of this comes to mind, because of the proposed budget for 2006-2007 recently submitted by Nashville Mayor Bill Purcell. It includes $4.1 million to cover the operating deficit for Gaylord Entertainment Center, which is managed by Powers Management, a Predators-related company. Nashville Metro Government pays the company $235,092 in management fees, minus bonuses.

And the public subsidy has been higher. Just last year it was $5.3 million.

Operating Losses

Sources in the arena management industry predict that the operating losses of FedExForum covered by the Grizzlies are likely to be even higher than $5 million a year.

Meanwhile, in Nashville, the relationship between metro government and its NHL team have gotten so bad that the Predators are threatening to file a lawsuit to force Metro Government to pay $1 million for bonuses it claims the city owes its management company and for equipment for the arena.
Powers Management has also asked for $7.85 in capital improvements to Gaylord Entertainment Center, and Mayor Purcell’s budget fully funds that amount.

The relationship has gotten so bad that Metro Government and the Predators have been arguing for more than a year about terms of their contract.

While the team is asking for the $1 million payment, Nashville complains that the Predators’ “tangible net worth” is lower than the amount required in the contract under which Nashville contributed $35 million to recruit the team to the city in the first place.

The Grizzlies and FedExForum seem always destined to produce spirited debate about everything from the financing plan for the arena to the team’s playoffs implosion. Maybe, there's only one thing we should be able to agree on: we’re all glad that it’s the Grizzlies, not the taxpayers, who are paying operating deficits for the new arena.

Thursday, June 15, 2006

Air Quality Is More Than A Problem For Memphians

Some weeks, newspaper articles make for an interesting point-counterpoint.

That’s certainly the case this week. One day, the city attorney says that a loss of $6.3 million in federal funding for air quality improvements has “very little, if any, impact in a meaningful way on any of the citizens.”

The next day, Memphis City Council members are complaining because they are faced with the budget request for a new inspection station to test the emissions of Memphians' cars. With apologies to the city attorney, that sure feels like a meaningful impact to us.

The federal funding is of course being forfeited because the garage built at the FedExForum isn’t the "intermodal transfer facility" that the plans submitted to Tennessee Department of Transportation and the Federal Highway Administration called for. Since state government gave money with no strings attached to Nashville for a stadium and an arena, the current controversy about the garage begs the question of why TDOT tried to thread the intermodal transfer needle in the first place.

The Same For Memphis?

Clearly, the motivation of the Sundquist Administration was to keep from putting state money into the FedExForum despite the governor’s assurance that the state would “do the same for Memphis that it did for Nashville.” The fact that the state didn’t fully live up to this promise, or federal regulations, with its $20 million in funding (included in the $250 million arena budget) is the basis for the problem that has now resulted in a call by some Council members for a federal investigation.

The cynical among us await the day when TDOT fires some functionary in its offices for failing to follow the funding regulations, when in truth, the ultimate decisions were political ones being made in the governor’s office which was busily robbing Peter to pay Paul to fulfill its pledge of support for the new Memphis arena.

All of this was an interesting sideshow until City Council was faced with a $4.8 million capital funding request for a new inspection station. Suddenly, the $6.3 million in air quality funds being withheld as a result of the garage problem loomed awfully large.

Council members were told that the new station is needed to take the load off the existing three stations where only Memphians are required to take their cars to be tested for safety and emissions.


City Council was justified in its simmering irritation over the fact that Memphians are required to get their cars tested while the 263,067 living in Shelby County outside of Memphis are immune from the testing, not to mention the 88,000 people who drive into this county to work.

These 351,067 lucky souls never have to sit in line at an emissions inspection station, while 645,978 Memphians are tested like they are carrying TB. If you’re looking for a local definition for unfairness, look under emissions testing.

Councilman Tom Marshall calls the emissions testing a “disincentive to live in Memphis,” and Councilman Rickey Peete suggested something akin to a guest worker program that would require people working in Memphis to get their cars tested, too.

Perhaps, they should check existing ordinances because there may be a law on the books left over from the 1930s that requires nonresidents of Memphis to get their cars tested if they drive inside the city. A few years ago, Councilman E.C. Jones said the law was still on the books. It seems like a good time to check.

I can remember as a young child living in Collierville in the 1950s and 1960s that our only trips to downtown (my father thought a trip to Crosstown to the movies was a major expedition) were to go to the inspection station for safety checks. My murky memory tells me that my father said we had to do it if we wanted to drive that car in Memphis. Otherwise, we risked getting ticketed. So of course he did it. My memory is less clear why we suddenly stopped, just like every one else living in Shelby County outside Memphis.

EPA Ruling

That situation continued despite the fact that the EPA ruled that Memphis was in nonattainment of carbon monoxide targets about 20 years ago. At that time, emissions testing was added to the safety checks at the inspection station. In the interest of pure air, you would think that every one could band together and have their cars tested. But like so many issues, the region quickly becomes balkanized on emissions testing with the towns outside of Memphis acting as if it is the first step toward consolidation and One World government.

Meanwhile, Memphis struggles alone and mightily to keep its air pollution in check. As City Public Works Director Jerry Collins put it so accurately in The Commercial Appeal:
“Everything that the city does to improve air pollution helps them keep from having their cars inspected.”
It would seem logical that because air quality is a critical regional issue that our Metropolitan Planning Organization – the agency that deals with these kinds of regional transportation issues and doles out federal money as the carrot to get them addressed – would be a natural ally of the City Council.

But that is not the case. For 15 years, the Memphis MPO has been home to some of the most parochial thinking in the community, and that certainly applies to air quality. The Memphis MPO is Memphis in name only, because it is the suburban and rural interests that dictate its policies.

MPO Neglect

For example, a recent committee, with great gravity, took up the issue of how the region could improve its air quality. It met frequently, and it looked for all kinds of answers, but in the end, conspicuously absent from its list of possible remedies was regional emissions testing.

This lack of attention to the obvious is the clearest demonstration of the stranglehold that the small towns have over policies that place Memphis at a striking economic disadvantage. All of this reminds us of the Brookings Institution report last year that questioned the basic fairness of MPOs across the U.S., but gave particularly damning grades to the Memphis MPO.

The report on the 50 largest MPOs concluded that Memphis had the third most unbalanced board in the U.S. While city residents made up 63 percent of the total population in the MPO’s district, Memphis had only 16 percent of MPO members. Meanwhile, the report said that the suburbs, with 32 percent of the population, control 79 percent of the vote.

According to Brookings, although the Memphis region has a large proportion of African-Americans, 84 per cent of its 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.

Suburban Imbalance

Because of this suburban imbalance, the idea of emissions testing for Shelby County, much less the region, is never seriously considered. No one wants to upset the politically powerful suburban interests, and as a result, the citizens of Memphis now face the prospect of paying for its fourth inspection station.

The imbalance is also the reason that the recent recommendations of the MPO committee didn’t include high-speed rail. Some of the officials from the ‘burbs have even expressed concern that it makes it easier for the wrong kind of people to come to their cities. Apparently, the wrong kinds are people from Memphis with their nonpolluting cars.

It’s another one of those strange cases of the tail wagging the dog, a syndrome that is so prevalent here in regional governance and public policy issues. The MPO forfeits its role as the seedbed for regional problem-solving because of suburban political influence, and meanwhile, the Memphis and Shelby County Health Department continues to stay on the fence on countywide emissions testing.

Over the years, health department decisions on emissions testing have been made by politicians, not by the air quality technicians, dating back to the time 10 years ago when the health division director was poised to order countywide emissions testing based on his scientific opinion of what had to be done to control air pollution. He received a directive from the county mayor: no testing, it would make the small town mayors mad.

Regional Solution

So, here we are, more than two decades after the problem was first identified, still looking for a common sense, regional solution to a problem that should concern all of us, and not just be the problem of the people who live in Memphis.

If the federal government really wants to see how its funds are wasted, it shouldn’t look at the garage at the Forum. It should look at the federal money spent for more and more road projects by the MPO while pretending that such things as vanpooling and carpooling are meaningful ways to reduce carbon dioxide.

The City Council is right. The time for countywide emissions testing is here.

It's way past time to reform the structure of the MPO.

Wednesday, June 14, 2006

How CEOs Can Improve Cities

Business Week reports this week on a new innovations workshops to help cities and they will involve Memphis:

Detroit, reeling from decades of auto-industry layoffs and a dwindling population, has a new plan for stimulating growth. Along with three other ailing urban areas—Memphis, Pittsburgh, and Columbus (Ohio)—Detroit is looking to take a cue not from the economic policies of the nation's healthiest cities, but from the business world.

In July, Detroit, Memphis, Pittsburgh, and Columbus will start a series of ongoing workshops with Chicago's Doblin Group, a top innovation-strategy firm whose client list includes leading corporations such as Clorox (CLX), McDonald's (MCD), Target (TGT), and Xerox (XRX).

Introducing cities to profit-geared creative-thinking exercises is the brainchild of Carol Coletta, chief executive of the Chicago-based non-profit organization CEOs for Cities, a national and bi-partisan alliance of mayors, executives, foundation administrators, and academics. The idea is to bring together mayors and local executives from these four urban areas to engage in workshops that will encourage them to chuck tired approaches like redesigning their tourist brochures or building a new convention center.


The workshops will start with a diagnosis of each city's capacity for innovation, based on an analysis of how creative its local government has been in the past. Then, Doblin will teach innovation methods, such as learning to pinpoint patterns of successful creative thinking, that have worked with other cities with lively economies.

Success, in this context, meaning strategies that lured new businesses and citizens. This step serves as a way to understand what kind of solutions—a new museum that highlights unique, local heritage, promotion of an existing, profitable industry that hasn't gotten a lot of press?—might work and should be prioritized. Finally, Doblin will help each city develop a realistic, yet mold-breaking, game plan.

"Cities need to come up with new ways of overcoming or at least coping with boom-and-bust cycles—just like businesses," says Coletta. "If innovation works for companies as a solution, why can't it work for cities?"


But what about the city-specific issue of political constituencies, a factor that the business world doesn't need to contend with?

"Companies have to deal with and persuade boards and shareholders to adopt innovation. It's not dissimilar," Coletta says, referring to the diplomatic skills required to push a radical new-or at least truly inventive-product or project in the corporate world.

Mayor AC Wharton of Shelby County, Tenn. (who governs the city of Memphis) says he wanted to participate because he seeks to improve what Memphis has to offer businesses beyond low rents. "Cities don't need to just get cheaper but better. Smaller towns can do things cheaper. I will never be able to out-cheapen towns in Mississippi and Arkansas. But we can become better," he says, referring to quality-of-life amenities like public parks or an accessible public transportation system that can be improved and promoted.


The four cities selected by CEOs for Cities clearly need help. For one, none are located in the nation's hotspots for growth-the Western U.S.; according to a Mar. 16, 2006 report from the U.S. Census Bureau, counties in the Western states added the most population between July 1, 2004 and July 1, 2005.

Meanwhile, the city of Detroit's total population was down to 840,000 in 2004 (the latest statistics available from the U.S. Census Bureau) from 951,270 in 2000. Pittsburgh's was down to 296,634 in 2004 from 334,563 in 2000. Memphis saw figures drop to 627,802 in 2004 from 650,100 in 2000. And Columbus (Ohio)'s population fell to 700,874 in 2004 from 711,470 in 2000.

All four also suffer from high poverty rates-suggesting a dearth of jobs. In 2004, 25% of Memphis's population suffered from poverty. In Columbus the number was 17%; Pittsburgh, 19%; and in Detroit, 34%.


Each city was given a homework assignment in preparation for the July workshops, which are the first of three meetings. As of this writing, the team of government officials, local philanthropic foundation administrators, and business executives from Detroit was tossing around the possibility of building a music museum.

The idea: to create a Rock-and-Roll Hall of Fame-style destination that would capitalize on the city's Motown legacy. The groups from Columbus and Memphis were both looking toward fostering biomedical and biotech businesses. And Pittsburgh's consortium was brainstorming ways to lure companies specializing in robotics and senior-citizen-geared tech.

Each city hopes to attract entrepreneurs. But they're also looking to cultivate small businesses that will cater to larger ones, by supplying critical parts or manufacturing or by offering services such as grocery stores and restaurants to serve a growing population of employees.


Doblin co-founder Larry Keeley thinks that bringing together mayors, foundation officials, and local businesspeople in an innovation-focused consortium will benefit the brainstorming process.

Keeley says such a mix of opinions and ideas reflect recent case studies of cities like Bilbao, Spain, a formerly sleepy town suffering from a loss of revenues in the area's shipbuilding industry which succeeded in pulling off an imaginative, high-profile makeover.

Bilbao's large-scale facelift included-among other investments in public transit and other civic projects— "starchitect" Frank Gehry's undulating Guggenheim Museum. The striking structure, considered the jewel in the crown of the remade Bilbao, was funded by the Basque government and run by the American Guggenheim Museum.


It was an unusual alliance that Keeley believes could serve as a model for other odd-couple partnerships. Keeley also cites Chicago's upgrade of Millennium Park as a U.S. example of giving a city a makeover with a similar combo of government funds and private support.

"What's been characteristic of city innovation is that it's almost always a public-private partnership," Keeley says. "Politicians are working with tax dollars, so they don't want to be reckless. But then private citizens foment and support revolutionary thought."

Mayor Wharton of Shelby County, Tenn. says he already looks to corporations for inspiration although he's aware of the limitations of being in government.


"I've heard presidents of companies like UPS say change and innovation is part of the company's DNA. Governments are averse to change, because our systems of law are all about preserving order," says Wharton, who wants to "get innovation into the DNA of Memphis."

Keeley predicts that although the city teams are enthusiastic and excited to engage in creative-thinking exercises, most likely they'll wind up discovering that their initial ideas might not be so earth-shattering after all. Or even if they are, they might not be feasible economically.

"In my experience, when you ask people to innovate, they have the wrong ideas initially," says Keeley. "But the goal [of asking them to come up with early concepts] is to get people thinking and to be comfortable with developing big, bold ideas."


Suzanne Walsh, a program officer for the Heinz (HNZ ) Endowments' Innovation Economy initiative and a member of the Pittsburgh team, saw a Doblin presentation on innovation strategies at a CEOs for Cities event in December 2005, and immediately wanted Pittsburgh officials to join.

"Working with national cohorts in brainstorming workshops can accelerate our innovation process," says Walsh when asked why. "Maybe we'll figure out that Pittsburgh wants to do something else. But that's good. It's a good starting off point."

The exercise promises an intriguing take-away for businesses big and small that are skeptical of innovation methods taught by firms such as Doblin. As an as an example for both corporations and local governments alike, the CEOs for Cities workshops could serve as proof that innovation techniques can be applied in a variety of industries and contexts, beyond predictable arenas such as product development.

Tuesday, June 13, 2006

Forbes Magazine Slaps Local PILOT Program

From Forbes magazine this week comes this report on the PILOT program that waives more than $50 million a year (city and county taxes combined; this article only addresses city tax freezes):

States and cities lure businesses with promises of tax abatements and other goodies. They'd do better with broad-based tax cuts.

The recent Supreme Court decision validating state tax incentives for corporations looked like a triumph for tax-cutting. But it was a Pyrrhic victory. Targeted tax cuts aimed at attracting particular employers are bad policy--bad for the states and bad, in the long run, for the corporations that are the intended beneficiaries.

For decades now targeted tax incentives have been a favorite elixir of state and local politicians in depressed communities. But targeted tax incentives don't spur real growth. Quite the contrary. While across-the-board tax cuts expand economic activity, targeted tax incentives are inevitably financed at the expense of established businesses. Today's winner of a targeted tax break is tomorrow's victim of a broad increase in business taxes. Assuming, that is, that this employer sticks around.

Memphis, Tenn.'s Payment-in-Lieu-of-Tax (Pilot) program is a case in point. For 18 years Pilot has created property tax holidays (of up to 15 years) for businesses adding jobs in the city. The cost, as measured by local and state authorities in the last thorough study (for 2002), was 7.4% of property tax revenue, or $23 million a year.

What does Memphis get for its $23 million? According to a study paid for by the city, Pilot created 65,000 jobs between 1988 and 2000. But that claim is tough to reconcile with the city's unemployment rate. In 1990 the rate equaled the national average. Now, at 7%, it's two points above the national level. Memphis' poverty rate is 21.5%, twice the national average.

Here are a few more damning numbers: Between 1993 and 2002, 21 companies in Memphis received Pilots but then had the Pilot terminated, usually because the company didn't live up to the promises it had made in order to win the tax breaks. In that same time period another 19 companies that got Pilots and kept their promises by staying a certain number of years eventually left the city for greener pastures.

One specific example:, a now defunct order-fulfillment company for Internet retailers. In 2000 the company promised to invest $79 million and generate 971 jobs with a median wage of $27,600. In exchange, the city granted SubmitOrder a 15-year property tax freeze. SubmitOrder stayed in Memphis for just one year and generated only 50 jobs during that time. Neither the company nor city officials foresaw the bursting of the tech bubble, but the fact that their crystal ball was on the fritz illustrates the obvious problems associated with extending tax breaks into a murky future.

Many companies that received Pilots did indeed stay in Memphis. But it's tough to say that the Pilots were the reason. Some would have come to Memphis anyway, and others lobbied to receive extended tax exemptions. Who wouldn't? Electrical equipment maker Thomas & Betts, for instance, has become one of the most successful businesses in Memphis. It received a 15-year tax incentive in 1996. But it's impossible to know whether the company would have come to Memphis without Pilot.

Memphis city leaders know that the Pilot program hasn't produced the desired results. This month the city council is voting on a proposal to move the power to award tax breaks from a nonpartisan development board to the council itself. But such a change would fix nothing. Rather, it would simply add a layer of politics and favor-courting to an ineffective program.

Unfortunately, the mere existence of tax-incentive programs can hinder deeper reform. In Memphis city expenditures have increased by 27% in real terms in the last ten years, while reserves have dwindled.

So, what's a city to do?

The answer is surprisingly simple. Keep taxes low across the board. Don't grant favors. Cities and states that pursue nondiscriminatory reforms, like reining in taxes, debt and public spending, will enjoy the most robust growth. Remove barriers rather than trying to steer economic growth to this favored corporation or that one.

Friday, June 09, 2006

Beale Street Landing Appropriation Is Positive Sign For The Future

Located as we are near the foot of Union Avenue, we have a front row seat as witnesses for the consternation and confusion felt by visitors when they wander down from the Peabody Hotel and nearby restaurants to experience the nation’s mightiest river.

Down the hill they walk, every day, excited and expectant for their first view of Old Man River. And yet, when they arrive, their attention on the river is short-lived. Almost immediately, they look up and down the riverfront for the grand public promenade that they assume exists there somewhere. Normally, they wander aimlessly along the riverwalk, unable to even see a place where they can buy ice cream or a soft drink.

That’s why we were so pleased when Memphis City Council approved $4.8 million to get Beale Street Landing under way. Finally, our local equivalent of Everest will have the great public place that it deserves. More importantly, we will have the linkage that connects our riverfront to our downtown and turns the city around so that it faces the water.

It sometimes seems that anything the Riverfront Development Corporation touches is immediately opposed by some people, but surely Beale Street Landing is something all of us can support. That’s because the benefits of the project touch so many needs that we have. Best of all, it would be a direct attack on the image of Memphis as a slow-moving, sleepy river town.

If there is one thing that we can do downtown that would make it more successful, it is to make it more vibrant. Beale Street Landing is a major step in the right direction with its modern docking facility, its grand civic plaza, and its dramatic overlook and sense of arrival.

The $29 million ($10 million from federal and state funds), five-acre project would be located at the terminus of legendary Beale Street, stitching together downtown’s two dominant legends into a single fabric. The consensus that emerged from the public meetings for the Riverfront Master Plan was that Beale Street Landing needs to be a top priority, and that sense of urgency was endorsed by the Urban Land Institute in its subsequent review.

The design for Beale Street Landing was chosen from 170 submissions in our community’s first international design competition. Managed by the UrbanArt Commission, Memphis Chapter of the American Institute of Architects and the RDC, the jury selected Buenos Aires architects Javier Rivarola, Gustavo Trosman and Richardo Norton.

As designed, the project features a number of landscaped “pods” that float over the riverfront, connected by pedestrian bridges and joined to a docking area for the large riverboats that moor here almost weekly and smaller boats that populate the river. The docking area in particular responds to a need for downtown, where we haven’t moved too far away from the old days when a riverboat was tied to a tree on the bluffs.

Of course, in the end, Beale Street Landing shouldn’t be built for visitors or tour boats. It should be built for those of us who live here, answering the need for the spectacular civic space that weaves together the urban fabric and using the most iconic asset of our past to create a new iconic image for the future.

Most encouraging of all is that the project turns our attention to the design details of our city, a subject too often neglected on our civic agenda. Perhaps, just perhaps, Beale Street Landing could even be inspiration for a new design ethos for Memphis.

If we have learned anything from the lessons of other cities, it is that places are complex organisms made up of interrelated activities; that projects work best when they connect to a city’s unique character, and most of all, they are about creating a place, not a plan.

Great cities around the world are reclaiming their riverfronts and capitalizing in powerful ways on the bonds between their people and their rivers. No city has more impressive ingredients to work with than Memphis, and Beale Street Landing is the precisely the kind of project that indicates to us what our real potential is.

While it is tempting to justify the project on the basis of economic impact, that would really miss the point. Most of all, grand public spaces like this make cities more livable, they are the physical embodiment of what cities are all about and they create a sense of place like nothing else.

That’s why Beale Street Landing is anything but a frill. It is a core investment in the kind of vibrant, appealing, connected, grand public spaces that we need. After all, isn’t beauty the most important public service of all?

Wednesday, June 07, 2006

Density And Sustainability Are Linked For A Bright Future

Memphis is # 345 on a list of world cities with the most people.

Memphis is # 70 on a list of world cities with the largest land areas.

Memphis is tied at # 638 on a list of world cities with the highest densities.

A study of sprawl factors concludes that the Memphis region is consuming land two times faster than its population is growing.

In another index of the 50 largest cities in the U.S., Memphis ranked #43 in being prepared for a sustainable future.

All in all, the numbers paint the picture of a community that’s failing to address problems that are much more fundamental than the county’s debt crisis (although one definitely follows the other).

It should be no surprise that unchecked sprawl here is producing more commuting and over greater distances, which creates more unsustainability, particularly when 80 percent of commuters drive to work alone and public transportation is virtually useless if you’re not a domestic worker.

As said in their survey: “Memphis prides itself on being a regional transportation hub. But the average citizen who needs to get from point A to point B usually does so in a car. Commuters rely almost exclusively on the automobile—over 81% drive alone to work (and) another 12% carpool, leaving a smattering of public transportation riders and walkers.

“As for public transportation, the city has invested in retooling its original trolley system in the downtown area and along the riverfront. This has been good for tourism and downtown business development but has had little impact on the transportation habits of the average resident.”

While commuting patterns here were once just the stimulus for editorials about carpooling, they now connect directly to our economic competitiveness, because how well a city is prepared for the deepening oil crisis may decide how successfully it weathers the oil crisis and its continuing sticker shock.

Denver and Destin

Our elected leaders would do well to study the example of Denver where a new commitment to multi-modal public transit is its response to these challenges. Seen as a way to decrease oil dependency, increase real estate values and create a more vital city, the $5 billion plan includes 119 miles of new light rail, commuter rail and bus rapid transit lines. In leading the passage of the new tax to pay for the system, Denver Mayor John Hickenlooper extolled the organic relationship and lifeline that exists between the urban core and the suburbs. In the end, all 31 mayors in the region backed the plan, and it passed with 73 percent of the vote.

Meanwhile, at the urging of Mayor Antonio Villaraigosa, developers in Los Angeles are increasing densities with mid-rise, mixed-use buildings in keeping with the architecture of the courtyard apartments for which L.A. was once known.

Even Destin is addressing sprawl, becoming the first city in Florida to apply for a new program aimed at luring people out of their cars and onto their feet and into public transportation. It calls for sidewalks, crosswalks, trolley routes, bike routes and subsidized apartments, and the alternative, planners say, is more time spent in vehicles covering longer and longer commutes.

Here, we soldier on the current course that begats McMansions; big-box stores that seem to migrate down major thoroughfares like giant insects, leaving desiccated shells in their wake; strip development whose name should more accurately refer to the way it strips away the sense of community; parkways that are too aptly named because of the idling lines of cars backed up there; expanding gas bills and waistlines; and the decline of downtown and the urban center.

Smarter and Cheaper

There’s a smarter way. Public services are less expensive when they are serving high-density areas, and capital costs are almost 50 percent cheaper than low-density sprawl. That’s why the strongest champions for high-density should be our local elected officials. They need to use their bully pulpits to correct public misperceptions that higher density means lower property values; to persuade financial institutions not yet comfortable with funding their construction; and to reinvent the local development standards that often discourage higher densities.

The benefits of this high-density development, according to the Urban Land Institute, are that:

• Density reduces automobile trips, encourages exercise through biking and walking and supports public transit.

• Density adds support for local retail and reduces the need for car-driven errands.

• Density fosters a sense of community the old-fashioned, it-takes-a-village way, because residents are more likely to get to know their neighbors and shop in the area.

• Density fosters greater safety, because it creates walking and biking that are a deterrent to crime.

• Density leaves more open space for parks, trails and other pedestrian-friendly options.

• Density provides greater opportunity for mixed-income housing affordable to households at more income levels.

Forms-based Zoning

One solution to what ails us is forms-based zoning, and fortunately, that’s exactly what’s being written right now for Memphis and Shelby County by nationally recognized consultants hired by the Office of Planning and Development. As the proposed Unified Development Code moves closer and closer to enactment, look for more and more energy invested by developers and builders to block it.

The beauty of forms-based codes is that the public is assured of the general compatibility of the project, because the discussion is focused on form, not density. The code, as proposed, includes a number of incentives to increase density, walkable communities and better design, and in reading it, it’s impossible to keep from thinking how different Memphis and Shelby County would look if it had been in place 15 years ago.

If you are wondering what’s the most important thing that we can be doing that fundamentally affects the place where we live, the amount of taxes that we pay and the kind of health that we have, it’s in getting this proposed Unified Development Code passed by city and county governments.

Monday, June 05, 2006

Taking A Broader View Of School Construction

See if this sounds familiar:

* New school construction is dramatically raising property taxes.

* New schools are used to attract families with students to sprawling areas.

* Building new facilities to combat overcrowding can accelerate development that prices young families out of the market.

* Architects and financial advisers heavily influence school construction decisions.

* Building a new school costs more than renovating an older one.

* School location decisions are often made without considering local government master plans and frequently place new schools in farmland areas that should be preserved.

* School construction on undeveloped sites generates many new expenses for infrastructure and government services, which eventually raise taxes for business and property owners.

No, these conclusions weren’t in a report about school construction in Shelby County, but they could have been. Rather, they were contained in Hard Lessons: Causes and Consequences of Michigan’s School Construction Boom published by the Michigan Land Use Institute.

Development impact

It was the first in-depth review of how school construction decisions are made in that state, their effects on development patterns and the negative impact on taxes. The report grew out of a joint project of the Michigan Chamber of Commerce and the Michigan Land Use Institute which set out to help school officials, community leaders, homeowners and citizens evaluate the full cost of new school construction.

The organizations began the study out of a concern that school construction was encouraging Michigan’s sprawl. Like Shelby County, Michigan’s population was growing slowly and yet it was one of the fastest sprawling states in the U.S. with land being consumed at a rate eight times greater than population growth.

As an article by Michigan Land Use Institute puts it: “Business and government leaders recognize that spread-out growth patterns are increasing taxes and fees that pay for expanding infrastructure, hurting the cities left behind and diminishing the quality of life as open space is paved over.” The cause: “ever-bigger schools ever farther out of town.”


Just as the findings were relevant to Shelby County, so were some of the recommendations:

1) School districts should acquire more independent technical assistance when assessing the true needs for building new schools or modernizing old ones. School boards should encourage the community to play a role in discussions about how to best provide facilities, preferably in town.

2) The renovation of schools should be set as the top priority, constructing new schools in existing neighborhoods the next priority and constructing schools in green field locations the last resort. Schools should conserve land and reduce costs through more efficient site design and in sharing fields, stadiums and recreational facilities among different schools and the community.

3) School districts must ensure safe routes to school so students can walk or ride bicycles to class and after-school activities.

4) School districts must be required to submit site plans to local planning departments for review to assure they are consistent with local master plans.

5) School districts should obtain independent assessments that provide accurate information about the costs of both renovation and new construction.

All of this makes the point that in this community, we don’t take the discussion to a higher elevation where we can address the big picture, rather than deal with a small piece of it. Our major civic conversation is about how to pay for the schools (and that’s an important one to be having), but missing from the discussion is what we want our investments in education to produce – in the classroom, in the neighborhoods around the schools and in the county as a whole.

Over the past 20 years, we have had committees upon committees that have examined school districts structure and funding formulas. But, there’s never been a committee that developed a vision of what education ought to be in this community, what its priorities should be, what its guiding principles would be, what we would do to make it happen and what we would consider success.

A Longer View

Instead, we lurge from one crisis to the next, never changing our focus to consider the larger issues like those examined in Michigan – development patterns, land use policies and master planning.

There are a number of policies that could improve communications here between governmental agencies involved in school decisions, but more importantly, there are policies that could increase public credibility.

For example, the State of Tennessee should establish standards for determining school capacities so that all districts use the same formula to establish the number of students who can optimally attend a school. Now, the city school district calculates capacities more in keeping with national practice while the county school district does it in a way that always portrays its schools as overcrowded. In the end, the inconsistency only confuses the public debate about schools and leaves the impression with taxpayers that both districts are setting capacities in the same way.

Meanwhile, at a local level, as long as Shelby County Schools isn’t required to submit its new school locations to local planning officials or conform to plans that are already on the books, Shelby County Government continues to pay the price for sprawl that it has no voice in causing.

In the end, what’s needed is for education in Shelby County to be known more for its planning and purpose than for its politics and power.

Saturday, June 03, 2006

How To Be Silicon Valley

From the CEOs For Cities blog:

Paul Graham, essayist, programmer, and programming language designer, used his keynote address at Xtech to explain how to become Silicon Valley.

You need two kinds of people to create a technology hub, he contends: rich people and nerds. And that's all you need. That's the exciting thing. "If you could attract a critical mass of nerds and investors to live somewhere, you could reproduce Silicon Valley," Graham says. "And both groups are highly mobile. They'll go where life is good. So what makes a place good to them?"

Nerds like to be where there are other nerds. Great universities seem indispensible to attracting nerds (although Heike Meyer suggests that Kansas City and Portland, Oregon, may be the exceptions). Graham suggests a formula to get such a university might be to pay 200 professors hiring bonuses of $3 million apiece.

But a university is not enough, he says. It has to reside in a place people want to stay after they graduate. Nerds, Graham says, want to live in cities with personality that offer "quieter pleasures" like cafes, bookshops, hiking and sunlight.

Although Graham makes a good case on how to become the next Silicon Valley, his example of William Shockley (founder of Shockley Semiconductor that begat Fairchild Semiconductor to which Intel and Kleiner Perkins are directly linked) is not the best. Shockley located his firm in Palo Alto because that's where he had grown up. Count Palo Alto part of the lucky hometown club that also claim Austin and Seattle (for that matter, Omaha) as members.

John Seely Brown has written with insight on this same topic.

Friday, June 02, 2006

The Times They Are A'Puzzling

Sometimes life just feels too confusing.

There they were tonight, to all the world the perfect married couple, longingly looking into each other’s eyes and professing their undying love to each other - Mary Kay Letourneau and Vili Fualaau.

While you can’t help but wonder what strange impulse leads a 34-year-old woman to want to have sex with a 13-year-old boy way back when, they came off today largely as any other newly wed couple.

I don’t know what to make of it all, and while I’m not trying to justify anything that Letourneau did in her position of power as a teacher, the legal irony crosses my mind that at that young age, Fualaau is seen by the law as not having the judgment to make a reasoned decision about his sexual relations. However, if he’d murdered someone, he’d be tried as an adult.

For some reason, that reminds me of the polygamist who’s on the lam and who the FBI has put him on its Top 10 Wanted List, the one with Osama bin Laden on it. (That should give the guy some cold comfort that he’ll stay free for some time.) He’s wanted for pedophilia for his serial marriages to young teenaged girls, which makes me wonder why no one in this jurisdiction has ever prosecuted the so-called Irish Travelers who come to Memphis every few years and get marriage licenses for a batch of older men to marry girls in their mid-teens. There was even a newspaper article about it the last time it happened, but no one in the prosecutor’s office seemed to take notice.

I’m not really drawing any conclusions about any of this. To me, it is all just a puzzlement, which is the overriding description of our times.

Maybe This Is Why We Have The Blues


It was beginning to feel like a really dull weekend, so I thought I’d check the AOL City Guide to see what exciting is going on in Memphis.

The recommendation under Today’s Pick: the CMA Music Festival in Nashville.

A Small Irony Of Life

It just seems strange to me.

I’ve got friends who are obsessed about their children’s safety. They give their daughters warnings about strangers, about over-familiar friends and about the risk factors for every conceivable crime.

That’s why it always amazes me that despite all of this concern, they are one of the many parents who put stickers on their cars that give their child’s names and their hobbies.

Any one behind their cars knows that they have two daughters, and that one is a cheerleader in Collierville, and the other plays soccer. Along with the cheerleading logo and the soccer ball on their car’s back windows, they also conveniently broadcast the name of each child with each hobby.

Talk about giving a predator a head start.

Thursday, June 01, 2006

An Effective City Strategy: Mulch

Chicago is a city that does so much right.

And we’re not just talking about the remarkable phenomenon that is Millennium Park.

More to the point, a recent visit to the Windy City reminded us of the impact of how important it is to do the little things to beautify a city and uplift city living. We found it impossible to keep from smiling when confronted with hundreds of thousands of tulips that seemed to burst forth on every major downtown street.

It seems that Mayor Richard Daley has no intentions of resting on his laurels, but continues to fulfill his promise to make Chicago the “greenest city in America.” There are now more than 70 miles of roadway medians stretching out into the city’s neighborhoods that are green and blooming, not to mention the more than 500,000 trees that have been planted during Daley’s terms of office.

Meanwhile, Millennium Park has become the city’s most beloved public place, but more to the point, there’s no feeling that it’s getting special attention. The parks along the lakefront are beautifully maintained and city government is constantly upgrading the more than 1,100 parks, recreational areas and beaches that it is responsible for.

Park Power

If you’re ever wanting to see the power that parks and green spaces have to enliven the pulse of a city and the lives of its people, go no further than Chicago. At a recent meeting of CEOs For Cities, the Trust for Public Land’s Will Rogers made the point that cities are the midst of a green renewal, turning to their parks once again as the threads binding together the fabric of community.

In this way, it can be said that parks are increasingly the canary in the coal mine. If a city’s government is healthy and effective, it shows in the parks. If city government is not healthy and effective, it shows there first…in poor maintenance, in overgrown playgrounds and in trash left for weeks at a time.

Chicago invested in a different reality at a time when no one would have ever predicted that its future would be associated with such remarkable green strategies.

More Flowers

Cities that do it right make it look so simple, as the tulips down Michigan Avenue reminded us. Too many cities, like our own, cut parks’ budgets and pursue new arenas and big showcase projects, when often what we need most to make us prouder of our city and happy to be part of it are flowers.

A recent New York Times article said it all: To Revitalize a City, Try Spreading Some Mulch. Some times, it’s that simple; the most basic things can make the most difference.

Here’s an excerpt from the article: “…mulch is an organic metaphor, tying together the various pieces of Chicago's novel development strategy, praised by the Sierra Club and the Chamber of Commerce alike. By wrapping its arms and famous big shoulders around its Latin motto — Urbs in Horto (City in a Garden) — Chicago has become a global model for how a metropolis can pursue environmental goals to achieve economic success.

“During the last decade, the city's performance, measured in virtually every conventional category of civic well-being, has been off the charts, local boosters say. Chicago attracted more than 100,000 new residents, added tens of thousands of downtown jobs, prompted a high-rise housing boom, reduced poverty rates, built thousands of affordable homes, spurred a $9-billion-a-year visitor and convention industry, and transformed itself into one of the most beautiful cities in America.
“The generator of Chicago's mulch is Richard M. Daley, the unorthodox and popular Democratic mayor who took office in 1989 vowing to replant the urban forest of his youth that was lost to Dutch elm disease and other blights. At the time, the pledge raised the eyebrows of supporters and critics, who chalked up the mayor's love for trees to his birth on Arbor Day in 1942.

“The tree planting, though, evolved over Mr. Daley's five terms into a much more sophisticated understanding of the benefits — including to the city's treasury — of conserving resources, saving energy, expanding parks, constructing environmentally sensitive buildings, reducing the amount of storm water, restoring wetlands, generating renewable energy and doing everything feasible to heal instead of harm the city's natural systems.

“Over the years, Mayor Daley's plan to turn his hometown into the "greenest city in America" has ceased to be an unusual experiment in revitalization. Instead it is seen by urban policy specialists as an effective response to the rapidly changing expectations that business executives and residents, especially young professionals, have for cities.

“The Daley administration has planted 500,000 trees, is putting up the most energy-efficient and environmentally sensitive municipal buildings in the country, has agreed to provide developers with much faster permits if they construct green buildings, instituted a $600-million-a-year program to repair neighborhoods and city parks, promised to obtain 20 percent of the electricity used by the city from clean and renewable sources, and converted hundreds of abandoned and contaminated properties into new businesses.”