The Music Foundation Needs To Connect With Its "Base"

It’s been five months since the Memphis Music Foundation imported the New Orleans Voodoo Music Experience to Memphis. The high expectations and meager results of those concerts are symbolic of much of the Foundation’s work since its creation, and comments by a knot of musicians listening to a concert seemed to say it all.

After listening to several songs by a New Orleans’ band, one of the Memphis musicians listening to the concert said loudly to the others with him: “Well, maybe we shouldn’t be worrying about the big earthquake. Maybe if we have it, a music commission in some other town will let us come there and work.”

It was a stinging and pervasive criticism of the Music Foundation: that it’s done nothing to put money in the pockets of local bands and musicians.

Looking at this through a political lens, if the Foundation is the campaign, it has to have a “base,” and it only makes sense that the base should be local musicians. Unfortunately, the three years of work by the Foundation has reinforced much of the industry’s innate suspicions about outside solutions.

Continuing the political analogy, the first thing any campaign does is to solidify its base. It does this by demonstrably proving its connection to members of the base, strengthening their cohesion and then building an organization on this foundation.

While musicians say that the Foundation seemed sincere in gathering their opinions a couple of years ago in a large-scale survey and interview project, most say there’s been little since then to make them feel that they are the priority for its work.

Many claim that the Foundation has a tendency to chase glitz and glamour – projects that as of yet have produced any real results – like its pursuit of a major MTV music awards shows (while insiders at the cable channel were sending clear signals that Memphis was being kept in the race as a bargaining chip with Miami, the eventual winner for the program), the excited chase to get the New Orleans Voodoo Music Experience here while suggesting that there would be national television coverage (ignoring warnings from the Crescent City about being careful with the promoter) and the October announcement that the Foundation is working to buy and move Sun Records back to Memphis (although labels are becoming about as meaningless to the industry as vinyl). All suffer from too much hype and too few results.

There’s one central truth about Memphis. We live in a small pond, and stories travel fast. Some complaints center on suggestions that the Music Foundation is more intent on romancing those with fame and fortune, like Justin Timberlake, than in helping local musicians make a living. Others complain that the commission has actually tried to put some local music-related companies out of business. Allegations of misfortune, hurt feelings, wasted money, lack of help and recycled ideas are rampant, and whether they are true or not, they represent a growing obstacle to the Music Foundation in its stated mission of “re-establishing Memphis’ music industry.”

Early on, the Music Foundation said that it believed that planning and investment could revive Memphis Music, but there’s required reading in the yellowing archives that deal with the last attempt to reinvent the industry from the top-down. The file: Chips Moman and Three Alarm Recording Studio. The ill-fated project was based on the best of intentions, enjoyed widespread business backing and was boosted unrelentingly by The Commercial Appeal. The idea was that Memphis Music could be reborn if we could lure the legendary Moman back to Memphis with money and facilities, but despite it all, there never was one hit and eventually he left town and the studio was tied up in legal proceedings.

Here’s the thing. The core of Memphis’ real strength has always been creativity – whether in business or in music. We underestimate the way that the people in this city have fundamentally changed and shaped the culture of the entire world. We’ve always dictated the future, whether with AutoZone, FedEx, Holiday Inns, self-service grocery stories, rockabilly, rock and roll and more. We are wasting our time if we try to reinvent Memphis music by looking back, by anchoring our plans in the old business model that is quickly evaporating in the withering digital barrage, and by looking for the magic bullet to make it all happen.

There is great merit to re-imagining a new music future shaped by the revolution being unleashed by digital technology, the Internet and the growing expectation that fan and band don’t need a third party between them. To its credit, the Music Foundation has among its priorities making Memphis the center for digital music.

However, to get to that place, we need to begin with the people who have always made it possible. We do it by tapping into the ingenuity of Memphians, the musical genius performing in Memphis clubs every night, the leaps of creativity that still lie within our music scene and the organic ideas of the imaginative digital leaders already working here.

Memphis’ history is not about importing greatness. It’s about greatness that is homegrown and organic. That vein of creativity is still here, and it’s a cliché, but that’s the first mining that we need to be doing.

We are in the midst of the most rapid change in technology in history, and it will leave the music industry with as little resemblance to its old business model as ipod’s are to 78 r.p.m. records. And yet, the music industry clings perilously (and ultimately, futilely) to a share cropper business model that they have used since the days of the Victrola.

In the face of peer-to-peer file sharing, CD burning, digital radio channels and subscription services, the industry today is mired in deep, deep denial. We don’t need to chase the vestiges of old business models – labels and publishing, but instead, we need to tap into our legendary vein of creativity in both music and entrepreneurship to stake out a distinctive place as the polestar for the digital music age.

There are so many good projects and so many good bands in Memphis that go wanting for a few thousand dollars. In addressing that priority, the Memphis Music foundation would create the “base” that it so desperately needs to be ultimately successful.

Next: What Other Cities Are Doing About Music

The Future Of The Pyramid Needs To Serve Our Vision For Memphis In The Knowledge Economy

It all feels eerily familiar – the politicians’ self-congratulations, the civic hyperbole, the bureaucrats leading the rounds of applause, the army of cameras and reporters.

It’s one of Memphis’ favorite pastimes – another development plan for The Pyramid.

This time, it was Bass Pro Shop that is the answer to realizing the building’s potential. Or will it become the latest grand idea laid to rest in the Tomb of Doom along all the others?

It all began in the late 1980’s with the unforgettable Sidney Shlenker. His promises ended up as elusive as a realistic financial plan for his grand vision for The Pyramid.

In the course of a few years, he went from Memphis’ “Man of the Year” to a verb:

shlenker (SHLINK-ur), v., 1) to dupe. 2) to fool. 3) to take advantage of people with too little self-esteem to say no. (From Southern, unknown derivation, possibly river-related.)

Shlenker is now the stuff of mythology, relegated to stories of a modern Carnival huckster who hypnotized the city and county into giving him control of their sparkling, new signature building. Forgotten these days are some interesting facts: one, he owned a National Basketball Association team in Denver, he had been CEO of the Houston Astrodome, he had co-founded Pace Entertainment (the largest live entertainment company in its day) until bought by the ever-hungry SFX and most remarkably of all, he was a banker. Two, his credibility was vouched for by one of Memphis leading citizens, John Tigrett. Three, after years of searching vainly for bank financing, at the 11th hour as his contract was being voided, he found the money for his project in a French bank, but the deal fell quickly apart when the bank received an anonymous, highly critical letter about him, postmark: downtown Memphis.

No, we’re not defending Shlenker, but it’s just a little hard to place all the blame on the pickpocket when you put his hands in your pocket.

In that same time period, there was the Isaac Tigrett announcement that The Pyramid would boast Memphis’ long-awaited Hard Rock Café, but the deal fell apart when his board complained that they had not approved it and they had no interest in opening here.

Then, after a lengthy process of city and county government, there was the selection of gifted Memphis photographer Marius Penczner to add his eco-theme park, Island Earth, to the building. However, Mayor Herenton jerked his support from the project at the last minute, complaining that there were “too many Republicans in it.” Mr. Penczner went on to film and produce award-winning commercials for the Clinton/Gore campaign and was media adviser to the Gore for President campaign. With the inescapable feeling that he had been repudiated by his hometown, he moved to Nashville.

Then there was the on-again and off-again flirtation with the National Academy of Recording Arts and Sciences for the Grammy Hall of Fame, or some permutation of it. Renderings were produced, committees were formed, endless meetings were held and mayors’ blessings were bestowed. The only thing missing was the money to do it.

So, now we’ve moved to Bass Pro Shops as Memphis again searches for the elusive answer to the mystery of The Pyramid’s future. While there’s nothing definite and there are no signatures on the dotted line, it appears that it will happen.

If city and county governments’ question is, “How can we get a tenant so we can keep The Pyramid open,” they’ve come up with a winning answer. After 15 years of various schemes and plans (and the building still without even the inclinator to the apex), the special task force on Pyramid reuse seems to have a proposal that can get done.

However, if the question is, “What can be done with The Pyramid that enhances Memphis’ national image and attracts the young professions that we so desperately need,” Bass Pro Shop misses the mark. Widely.

At a time when Memphis lacks any cohesive economic plan, and these days that especially means a talent strategy to attract 25-34 year-old knowledge economy workers, it is hard to imagine that the giant fish retail theme park will be a plus.

It’s ironic that Memphis led the nation in research into this key demographic, which is determining which cities fail and which cities succeed. And yet, armed with definitive recommendations from the Memphis Talent Magnet Report, the results of the Memphis Manifesto Summit and the data of the Young and Restless studies, Memphis has never been able to leverage this knowledge into a strategy that can work.

Already, we know about Memphis’ drawbacks from major corporate recruiters in Memphis and members of the young professionals’ demographic group. In the eyes of these workers, Memphis is seen as provincial, slow-moving, dull and a big country town. They want to live and work in cities that are vibrant, have a visible creative culture and opportunities for unique, memorable experiences.

With the pressing need to correct these misperceptions and communicate a new image, city and county governments are turning over the region’s signature building to Bass Pro Shop, a highly successful company with quality leadership. But the question remains: is this the best use of The Pyramid and will it create a buzz about Memphis as a vibrant, 21st century city teeming with creativity?

When it was built, The Pyramid was supposed to symbolize our confidence in the future of Memphis. Today, its reuse should symbolize our confidence that we will be a city competitive in the new economy.

As we said, the committee that did a fine job in luring Bass Pro Shop to The Pyramid answered the question that they were given. We just wonder if it was the right question.

And, what did we learn from Memphis’ Shlenker Era? It’s simply this - it wasn’t his cleverness or his charisma or his glibness that conned us into giving him the keys to the Pyramid. Rather, it was our own neediness and feeling of unworthiness, which manifests itself in the deadly notion that we don’t deserve the best, that whatever we get is good enough and that we’re lucky to get it.

The good news is that Jim Hagale, president of Bass Pro Shop, is no Sidney Shlenker. Here's hoping we're not the same old Memphis.

Maybe Term Limits Should Be Aimed At Public Boards and Commission

If term limits are an idea whose time has come, perhaps a good place to start would be the members of the more than 150 public boards in Memphis and Shelby County Governments.

Media attention regarding terms limits concentrates on elected officials, particularly those in Shelby County Government who were limited to eight years in office by a public referendum about 12 years ago that delivered a resounding mandate. Three of the county commissioners affected by the referendum filed a lawsuit and won, but it's now under appeal to the Tennessee Supreme Court. The argument for term limits is that no one should become entrenched because they stifle new leadership, and that cities benefit from new ideas and new energy for the mayor and board of commissioners.

Meanwhile, the members of most boards turn over about as frequently as U.S. Supreme Court justices. Amazingly, there are members of city boards who pre-date Mayor Herenton, and county boards are filled with people who have been there through multiple mayors. For example, the head of the Agricenter Commission has not changed since it was created about 25 years ago, back when Mayor Morris was in only the third year of his 16 years in office, before Jim Rout’s eight years in office and before Mayor Wharton’s almost four years.

Even the most highly-coveted boards, like the Memphis and Shelby County Airport Authority and Memphis Light, Gas & Water Division board, sometimes have the feel of an exclusive club, where members are appointed and reappointed until they simply get tired of serving. Sometimes it feels some members of the Airport Authority were appointed in the days of the bi-plane, and it's been an insiders game for the people named to it.

Shelby County Government’s policy is that even when a board member’s term ends, that person continues to serve until a replacement is appointed. There are some people whose terms have been expired for a decade before another appointment was made. The policy had the added benefit of silencing the board of commissioners when it attempted to enforce the terms for boards. No action was taken by the administration, so the members remained in place, because no replacement had been named.

City of Memphis Government has been more dutiful in keeping its boards current, but it has the same tendency for people to serve extended periods. While the willingness of any citizen to serve on a board is admirable, the injection of new blood is vital to the basic concept of democracy. In the end, the ultimate goal of boards is intended to engage more citizens in the business of their government, but this doesn’t happen when membership stagnates.

Also, there is the often overlooked problem caused by the coziness that comes to exist between the boards – designed to serve as a check and balance – and the services they are appointed to direct. An example is the Agricenter Commission and Agricenter International, where the public board members cede authority to the private nonprofit board that they are supposed to be monitoring. As a result, Agricenter International, despite having 1,000 acres of public land under its control, has never been called on by the Agricenter Commission to justify the abandonment of its founding mission or to justify why it’s in the public best interest for this valuable real estate to be controlled by the organization.

Various public boards exert significant influence over certain government policies and services, and at the least, it’s time for all membership to be brought current and for broader representation, especially of young adults and women, to be made a priority

Center City Commission Plan Revives Memories

Sometimes, to paraphrase Ross Perot (of all people), in Memphis, we think planning is the same as doing something. If that’s the case, we’ve been really, really busy.

We’re not saying that a sound plan isn’t an instrumental tool in a successful public project. But it’s awfully hard to argue with the folks who say that Memphis leads the nation in the number of plans crowding the shelves that were never implemented.

Not to prejudge today’s announcement by the Center City Commission, but we thought of this again as we read the article about the latest plan being undertaken by that city-county agency - this time, it’s a strategic plan for downtown’s next five years. The fact that the news coverage quoted someone whose title was Center City Commission director of executive programs certainly indicated that some fresh thinking is called for.

It also reminded us of a strategic vision for the Center City Commission that formed about 15 years ago for the future of the downtown redevelopment body. At the time, it was at one of those critical crossroads when the survival of the agency was even in doubt, so it was a point when innovative thought was welcomed and fresh ideas formed. The agency was limping along, and some government and downtown development people began to talk about what the future of the agency should hold and what the Center City Commission should look like.

There was clear consensus. It should get back to basics. It should be private sector-driven. It should focus on fewer priorities. It should get out of the planning business. It should be lean and mean and entrepreneurial.

It should adopt a development mentality. It should measure success in putting together deals, not marketing brochures or studies. It should be less politicized and its board self-perpetuating. It should have a small focused on a few key priorities. It should look for a day when it could end tax freezes and lower the special assessment on downtown businesses.

At the time, one of downtown’s best thinkers put it this way: “We need to quit trying to do everything. We need to pick three priorities and go do them. We need to quit trying to do everything at once. Let’s do three things and when they are done, let’s chose three more and go do them.”

It didn’t seem bold at the time. It just seemed practical. However, things went a different way, leading to an agency that has a staff about three times larger and with two and a half times more politicians on its board.

That said, it’s encouraging that Center City Commission is willing to embark on a process that will consider the best role that it can play, what staff size contributes to the most innovative and entrepreneurial organization and what can produce the most dynamic results for downtown Memphis.

In fairness, the jibes about the agency’s penchant for plans are traced back to something that predates all of the current staff - the more than 20 volumes in its 1984 Center City Development Plan, which was supposed to be the seminal document guiding downtown’s future.

Costing about $500,000 (in 1984 dollars), it barely saw the light of day, largely because the consultants’ team led by Venturi, Scott Brown and Associates Inc. of Philadelphia was not seen as developer-friendly and too rooted in the history of downtown. The final plan – a fascinating compendium of recommendations for downtown’s future – became the poster child for the phrase, “one of those plans gathering dust on a shelf in government.”

It was a fate it did not deserve. It was a thoughtful, articulate plan that treated the heritage of downtown with respect while recommending ways to spark new vibrancy and vitality in the urban core, particularly by building on linkages between the center city and the river.

It was whispered derisively that the lead consultant, Denise Scott Brown, took an egg-headed approach (then again, she does have 10 honorary degrees and has written six books and so many articles that she doesn’t even bother handing out her complete bibliography. In the end, after months and months of public meetings and input, the plan was completed and promptly and quietly filed away.

The money set aside for the executive summary was poached and spent for yet another re-design of Court Square. No executive summary was ever written.

It was an unfortunate decision for Memphis, because with the 1990s came a wave of honors for Brown and her partner Robert Venturi that continues today. The litany of awards recognize them as some of the most influential forces in the past 50 years, and the Harvard University Press credited the pair with influencing architects around the globe.

Yet, in Memphis, the work by the firm was buried away unceremoniously and has never been mentioned again. And because of it, as Venturi and Scott Brown were honored repeatedly, Memphis denied itself the opportunity to tout its downtown’s connections to legends in their fields.

So, today, the announcement of yet another Center City Commission plan may spark its normal round of quips, but in downtown revitalization around the country, hope springs eternal. That’s especially true here. We'd be happy just with more cleanliness, better signage and fewer panhandlers.

Wages: Minimum and Living

More and more, cities and states are stepping in to address issues that traditionally would have been the province of the federal government.

Last June, we wrote about the then 170 city mayors who had signed on to carry out the Kyoto Accord, an international environmental agreement that would reduce heat-trapping gas emissions. President George W. Bush stonewalled the accords, so the mayors, both Democrats and Republicans, took matters into their own hands.

Unfortunately, Mayor Willie W. Herenton didn’t join his counterparts in this coalition, but this year, he gets another chance. This time, the issue is wages.

And while the conventional lethargy of the public sector may come to define this issue, too, this time around, state legislators are getting into the act. Several bills are pending in the General Assembly to increase the minimum wage from its national mandatory level of $5.15 to as high as $7.15 as a state mandatory level.

Tennessee is one of only a half dozen states without their own mandatory minimum wage laws, but to this point, only 18 of them have set the amount above $5.15, and unsurprisingly, none of them is in the South. (The 18 states do, however, represent nearly one-half of the U.S. population.)

It has created some unlikely advocates. These include politicians with national profiles - New Mexico Governor Bill Richardson (D) and California Governor Arnold Schwarzenegger (R).

It seems that while Democrats are working hard to look tougher on national security issues in an effort to blunt Bush’s last issue of strength, Republicans are invading the Democrats’ stronghold by appealing to the working class. Schwarzenegger for example called for a $1 increase in California’s minimum wage to $7.75 an hour, and despite earlier resistance, he even seems to be weakening on indexing increases to inflation.

The National Conference of State Legislatures predicts that the minimum wage will be one this year’s hot issues, and that as many as 30 states will contemplate their own legislation on the minimum wage.

At the national level, business interests have blocked any momentum for a minimum wage increase, although the current amount was set nine years ago. (In the meantime, the Congress has expressed its concern about wages, raising its own salaries seven times.) And with recent reports that the salaries of young workers are declining and that family earnings are headed in the wrong direction, state legislatures are jumping on minimum wage as a powerful populist issue.

Taking a lesson from the Religious Right, which manages to concoct a yearly vote on something dealing with gays to get out their base vote (last year, it was protecting the sanctity of marriage, and this year, it appears to be prohibiting gay adoptions, although we guess lesbian couples will be allowed to keep their own babies), more mainstream political interests are looking to the minimum wage as a GOTV issue for themselves.

The Democratic thinking is that minimum wage is an issue that drives minorities and the poor to the polls. But it seems to drive much more than the Democratic base. A Pew Research Poll reported that almost 90 per cent of Americans support the raising of the national minimum age to $6.45. It’s also worth noting that two years ago, the Florida minimum wage increase was supported at ballot by 71 percent of the voters, running ahead of John Kerry by 23 percent in that sate.

As expected, there is competing research that enables all sides to claim the statistical high ground. Leading the opposition to minimum wage increases is the Employment Policies Institute, whose argument goes something like this: an increase is bad because it attracts higher income teenagers who force out low-skilled adult workers.

If that isn’t enough to suggest a political tin ear, its officials have even said that most Tennesseans who would be helped by a minimum wage live at home, live alone or live with a working spouse.” We can’t quite see why the group finds this such a compelling argument, since it’s a bit reminiscent of those days when women were paid less than men because “he’s got a family to support.”

More tangibly, opponents can make the case that only about 13 percent of the cost of the minimum wage will go to poor families. It’s an attempt to undercut the high moral ground out from under those supporting the increase and suggesting that their motivation isn’t really concern for the working poor. It seems unlikely to have traction because most of us can remember when we were being paid minimum wage or see our children now earning that salary, making it a close to home issue.

Meanwhile, back in Memphis, we continue to grapple with the living wage issue. City Council has dragged its feet on this issue, but like so many issues that dissipate with time, this one is not going away, particularly as long as tax freezes are handed out as casually as they are by city and county governments.

The Living Wage Campaign is calling on the City Council to pay its workers $10 an hour with health insurance or $12 an hour without insurance. In addition, it makes the case that if companies are going to have their property taxes waived, they should at least agree to pay a living wage to their workers in return. The $10 an hour would bring a family of four to the federal poverty level.
The campaign has enlisted no less an authority to their cause than the widely respected economist David Ciscel of University of Memphis. His 1999 white paper, “What Is a Living Wage for Memphis?” articulates the case convincingly and serves as the Bible for the campaign. Also, he is the “truth squad” for the movement, correcting the misstatements by City Hall functionaries fighting the living wage notion.

“The Living Wage is a concept that allows us to measure the level of income required for a family to live independent of monthly public assistance, food stamps, childcare subsidies, and rent subsidies,” Dr. Ciscel wrote in this report. “…The Living Wage assumes a bare-bones budget. It allows for necessities, not luxuries, and it is not the same as traditional poverty thresholds.”

This particularly makes good sense when applied to companies receiving tax freezes. Why should our own local governments waive taxes for companies who pay salaries so low that the local governments then have to increase social and human services to take care of these companies’ workers?

Incredibly, city and county governments have people on their payroll beging paid less than the living wage. In late 2004, there were 226 people in city government paid less than the living wage. When county government contemplated a policy to raise all wages just to the poverty threshold in the late 1990’s, the money was directed instead for “salary adjustments” for higher paid employees.

Memphis city government was silent when so many of its metropolitan peers were signing on to the Kyoto Accord. Let’s hope that on the living wage, it can finally find its voice.

County School System Continues Questionable Decisions About New Schools

In light of WMC-TV's coverage of Sunday's post about county schools, the following commentary from last month seems to be worth a repeat:


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.

Memphis Doesn't Have To Be The Next Pittsburgh But It Requires Decisive Action Now

In December, the University of Pittsburgh Center for Social and Urban Research published a report called “The Roots of Pittsburgh’s Financial Crisis.”

It could just as easily be called “A Cautionary Tale for Memphis.”

The report is a post mortem on the city’s financial meltdown, which became so acute that the State of Pennsylvania stepped in to demand that Pittsburgh get its fiscal house in order. In that city, the verdict is still out on whether its strategies have worked, but in this city, the lessons from Pittsburgh should be instructive as city officials cope with Memphis’ financial problems.

Fundamentally, Pittsburgh failed to adjust its public services and employees despite falling population, rising budgets and a flawed tax structure. Without the benefit of strong annexation laws like those in Tennessee, the city saw its boundaries frozen and its population halved over 40 years. Despite the falling population, the per capita cost of providing public services was increasing and the workforce was not being reduced.

As for its population, Memphis has a sense of false security. Its population is artificially propped up by annexations that give the impression of population growth and stability. If Memphis were landlocked like most cities its size, it too would be in the midst of a population free fall. After all, from 1980 to 2000, the population of Whitehaven fell by 6,400; South Memphis fell by 9,200 people; North Memphis by 7,100; the Defense Depot district by 6,000; Midtown by 800; and downtown/Medical Center by 3,000.

It seems inevitable that there will be a point when Memphis doesn’t have the luxury of further annexations to bolster its population, and at that point, if past trends are any indication, its population will stall and to drop.

Like Pittsburgh, Memphis could then be a smaller city but with growing employment. It’s a curious phenomenon. Even now, with the exodus of people out of Memphis, 102,743 people flood back into the city to work each day. It’s a powerful reminder of the city’s place as the region’s employment hub.

This is particularly true in Pittsburgh. Memphis’ population swells 16 percent a day. In Pittsburgh, the daytime population grows 41 percent. Therein lies the problem, because Pittsburgh is also stuck with a tax system that is structurally unsound. Unable to tax commuters driving into the city to work and unwilling to abandon gratuitous political solutions, the cost of services fell to fewer and fewer property owners.

The shift in the tax burden was further complicated by the fact that a growing segment of the employment base was shifting to universities, hospitals and the public sector that do not pay any taxes.

Its most logical options: cut payroll and reduce services. Instead, it did nothing…for decades. And to compound things, it pretended that unfunded pension and health benefits obligations didn’t exist and made an agreement that dealt away its critically important assets – water and sewers.

As for payroll, Pittsburgh officials funded pay raises out of existing revenues, but never put enough revenues into reserve accounts to cover growing pension and health obligations. (That’s not a lesson lost on New York Mayor Michael Bloomberg, who is proposing that $2 billion of his city’s $3.3 billion surplus should be set aside to pay future health care costs for retirees.)

Rather than make the hard decisions, Pittsburgh went with the easy answers and political tricks. Pittsburgh issued $269 million in bonds to fund part of its pension liability, but the city bet on a loser - higher interests rates - and once the rates fell, the city was actually $450 million deeper in debt.

In another sleight of hand, the city concocted a complex reverse mortgage arrangement for its water and sewer in exchange for an infusion of quick money; however, in another show of political expedience, the system’s employees were made non-city employees, but they were allowed to stay in the pension system. In addition, the arrangement allowed the water and sewer authority to buy arguably the city’s most important assets at the end of 30 years.

And yet, the core problem wasn’t poor city finances. Rather, it was poor political courage.

“An important source of the city’s current difficulties was the unwillingness of past city administrations to address these structural deficits,” the report said. “…To keep the same workforce, despite expenditures growing faster than revenues, various city administrations resorted to a number of practices that shifted the financial burden of their current operations to future taxpayers.”

These days, the report says “the proverbial chickens are coming home to roost.” Now 20 percent of the city’s general fund revenues is earmarked for debt payments and financing the pension system.

The tone of the report is glum. Even with all the changes recommended by state government, the structural deficit is still $50-60 million a year. Pittsburgh may be too late to save itself.

“There is the fundamental maxim of tax analysis,” the report says. “Ultimately, whatever the legal basis upon which a tax is levied, the true burden of the tax is borne by those who cannot avoid it.” It is a cogent insight into tax policy, and it should be kept uppermost in mind as Memphis deals with its budgetary challenges. In the end, the answers must be compelling enough to convince those who can avoid city taxes to stay in the city and pay them.

People can move; property cannot. That’s why despite Mayor Herenton’s suggestion for his critics to go ahead and move out of Memphis, the overriding challenge for his financial experts is to craft financial solutions that entice people to stay. As the Pittsburgh experience proves, as many people as possible are needed to fight the decline of a city and its tax base. As the report says, it is property owners who will bear the burden of paying for the years that city government failed to get its house in order.

Perhaps that is the strongest signal that the Herenton Administration can send to the citizens of Memphis. Rather than invite people to leave, it can show that it is resolute and courageous in dealing with the crisis facing it. It can show that it has no interest in quick fixes and magic bullets. It can show that it has no interest in one of government’s most tempting tactics – shoving problems into the future for others to deal with.

As the Pittsburgh story proves, there is no time like the present.

County Schools' Rhetoric Often Leaves Reality Behind

As we pointed out last week, the rhetoric of Shelby County Schools officials often bears little resemblance to reality, whether the subject is growth, consolidation and academic achievement.

It’s a prime example of how if political rhetoric is loud and persistent enough, it often becomes reality. Frequently, no one, including the news media, bothers to determine the facts behind the rhetoric. While it is a political cliché that perception is reality, unfortunately, in the case of Shelby County Schools, perceptions drive decisions that increase the debt of Shelby County Government and continue questionable educational policies.

As we pointed out last week, the number of county students peaked in 1999 with 48,770 students. In fact, over a 10-year period, the enrollment of Shelby County Schools fell by 1.23 percent. In other words, county school enrollment is largely flat. Shelby County Schools’ fifth attendance period report puts enrollment now at 46,212.

Despite this, since 1999, Shelby County Schools has built 10 new schools and are lobbying for the money for even more. Already, it now has the Southeast Shelby high school and the Schnucks school under way.

There are a number of facts that will keep the county schools’ enrollment from growing as county school officials suggest. There are demographic trends like the aging of the Germantown population, movement of families outside of Shelby County, and in keeping with the agreements entered as part of the State Chapter 1101 process, county schools will be only those located within the various town limits.

The boundaries for 2010 result in Shelby County schools’ projected enrollment of less than 40,000. By 2015, enrollment will be about 35,000 and continue to decline to about 30,000 by 2020.

The impact on the ADA (Average Daily Attendance) funding formula will be profound. Now, Memphis City Schools has 73 percent of all public school students and Shelby County Schools has 27 percent. Therefore, funding for the two schools districts are split on the basis of their percentage of the total number of students.

By 2020, the breakdown will be about 82 percent city and 18 percent county. This means that if the present ADA formula is still in place, by 2020, $10 million needed for county schools will cost taxpayers $50 million, because city schools must get $40 million (because Memphis City Schools will have four times more students).

It is in this context that we predict that suggestions about school consolidation will become more and more seriously considered. While the idea triggers outrage from Shelby County Schools, it is hard to ignore the fact that every urban school district in Tennessee is now consolidated, except for Memphis City Schools and Shelby County Schools.

Among the many complaints leveled by county school officials, a favorite is that consolidation is more expensive. That’s not what a comparison of operating expenses for Tennessee urban counties shows.

In fact, it’s the unconsolidated school districts that have the largest increases in operating expenses over a 10-year period – 91.2 percent for Shelby County Schools and 94.7 percent for Memphis City Schools.

Meanwhile, increases for the consolidated urban districts are:

• Davidson County (Nashville) – 73.5 percent
• Hamilton County (Chattanooga) – 60.8 percent
• Knox County (Knoxville) – 64.9 percent
• Madison County (Jackson) – 50.2 percent

Roughly a year ago, Memphis Mayor Willie W. Herenton convened a task force to look into school consolidation, but it was essentially highjacked by county school interests, spending the intervening months writing a report on the intricacies of school funding. Statistics and experience indicate that consolidation is a policy option that now deserves serious study and consideration. Hopefully, the task force will now lead this process.

Also, a gap between rhetoric and reality is seen when county school officials talk about the performance of their schools. Repeatedly, county schools are held up as superior and high-performing. However, this conclusion is often reached as a result of a comparison of performance standards with Memphis City Schools.

Of course, the more pertinent – not to mention, fair - comparison would be for Shelby County Schools to compare itself with other suburban school districts characterized by two-parent, highly educated, higher income families. Lists of the best public schools in the U.S. regularly include schools from districts with the same profile as Shelby County Schools, but these lists never include a school from Shelby County Schools.

For example, just last week, the list of the top 1,000 U.S. schools was released, and they include schools from suburban districts outside Atlanta, Miami, Washington DC, Charlotte, and dozens of other major cities. But there’s not one school in the Shelby County School District among the 1,000 schools.

In Tennessee, there is the school in Brentwood (#339), in Oak Ridge (#360), in Franklin (#645) and Hillsboro School in Nashville (#812).

Shelby County has only one school. It’s in Memphis City Schools – White Station High, #621. In other words, in the school district with the highest expectations and greatest claims for student achievement, there is no school on the list.

But the list of 1,000 schools should not just be disturbing for Shelby County Schools. It should be a wake-up call for state government, too.

Hopefully, state education officials will not hold up five Tennessee schools among the 1,000 as indicators of successful educational policies. That’s because Florida has 20 schools in the top 100; North Carolina has 10 in the top 100; Texas has seven; and the #1 school in the U.S. is in Alabama.

Hopefully, someone in the Tennessee Department of Education will see these rankings for what they are -- a challenge to business as usual. If other Southern states can create educational systems that inspire high-achieving schools, surely Tennessee can do the same.

And as state educational officials begin their deliberations, here’s hoping they ask Shelby County Schools to join in.

Learning To Love Density: The Return Of Affordable Housing

From Otis White's Urban Journal at governing.com:

If ever there was a lost cause for cities, you’d think it would be affordable housing. After all, the average price of housing in the U.S. has increased by 73 percent in the last seven years, the Economist magazine reported recently. And resistance to affordable-housing projects remains fierce in many places. So it may come as a surprise to learn that some advocates are optimistic these days.

We know that because the Federal Home Loan Bank of Atlanta talked with some of the nation’s leaders in affordable housing recently and reported on what they see ahead. Two changes, they predict: a lessening in the NIMBY reaction against affordable housing and, perhaps as a result, greater success in integrating affordable units into larger market-rate projects.

First, though, the answer to a simple question: Why does housing cost so much? The price of building materials has risen over the years, as has the price of land in most places. But as economists who’ve studied the numbers have found, a big reason for escalating housing costs is land-use regulation. That is, governments make it so difficult and expensive to build housing, they almost demand that successful projects be only for the well-to-do.

Think about it: Local governments, the very institutions that wring their hands about the lack of housing for police officers and school teachers, are often the cause of the problem. Why would they make it so hard to build affordable housing? Because it’s what homeowners and neighborhood activists demand as a way of keeping their home values up. Their fear: If a few $200,000 homes are built in a neighborhood of $400,000 homes, it will bring down home values. Hence, the NIMBY reaction.

There’s another reason: To build cheaper, you usually have to build denser. Makes sense: The less land that’s used (by placing houses closer together or stacking them on top of one another in a mid-rise building), the cheaper the final product. But here, too, you run into the buzz saw of neighborhood politics: Homeowners furiously protesting any effort to change neighborhood scale.

Given this, what could possibly break the stalemate over affordable housing? Three things, the experts said: the aging of the population, a greater appreciation of density’s benefits, and better approaches by government to encouraging affordable housing.

First, the aging population: As the average age advances, there will be great demand for new modestly sized, modestly priced housing in cities and suburbs, experts say, and local governments will respond. To put it bluntly, the elderly will make affordable housing respectable — and less risky politically.

Second, density will become less of an epithet and more of an aspiration as politicians learn to appreciate the value to street life of having lofts atop stores and offices. (There’s a major opportunity for affordable housing, one advocate said, in downtowns, lifestyle centers and “pedestrian-scale communities.”) Another factor lessening NIMBYism, the report said: “Affordability is affecting a greater number of people with higher incomes.” Translation: More and more middle-class families are learning they can’t afford traditional, spread-out housing unless they’re willing to accept a brutal commute to work. As they clamor for housing closer to work, that too will lend respectability to affordable housing.

Footnote: One tactic that has helped greatly, affordable-housing activists say, is “inclusionary zoning,” which requires developers to set aside a portion of their major market-rate projects for low- and middle-income housing. This kind of zoning is now used in 107 communities in California, up from 64 a decade ago.

Lifestyle Centers Hamper Region's Growth Management

From AIA Oregon Newsletter:

By George Crandall, Crandall Arambula PC in Portland, OR

Lifestyle centers are cropping up across the country. Communities everywhere are jumping on the lifestyle bandwagon without questioning how these new developments will ultimately impact the long-term livability and economic vitality of their downtowns.

My first experience visiting a lifestyle center was not a pleasant one. I realized quickly that lifestyle centers are privately owned and operated businesses – not the publicly-owned retail main streets they impersonate.

When taking a few photos of the street environment, I was immediately surrounded by three security guards threatening to remove me from the premises if I did not put away my camera. Picture taking was prohibited, but they were not able to provide a reason for this edict.

This experience underlined a simple truth: owners of these faux public places are accountable to no one and are able to impose their personal code of conduct on visitors and shoppers alike.

Lifestyle centers are simply the latest incarnation of shopping malls cleverly masquerading as public town centers or public main streets. In fact, many developers incorporate the name “town center” or “village” into the development’s name and brand. They offer visitors shopping, dining and entertainment opportunities that are often marketed as urban, unique, historic and even European-style shopping experiences. The truth is that these centers are solely created to attract national chain stores and restaurants such as the Pottery Barn, Ann Taylor Loft and California Pizza Kitchen, anchor retailers that would better serve the community if located in downtowns or town centers.

Lifestyle centers draw anchor uses and ultimately shoppers away from the city’s core. This added competition for the limited retail market makes it difficult to revitalize our regional centers and create successful downtown shopping districts. For example, in Gresham (OR), the city’s traditional Main Street now competes with the Gresham Station lifestyle center.

Ultimately, lifestyle centers do not support Portland region’s 2040 growth management policies. They make it more difficult to revitalize downtown “main streets” by competing for the limited retail demand.

Recently, Crandall Arambula prepared a downtown revitalization plan for Lincoln, Nebraska. Working with an economic consultant, an interesting scenario unfolded. It was determined that there was a substantial additional demand for downtown retail. However, because of lack of available land and the fragmented retail environment, downtown retail revitalization would be difficult. It would be easier to build a lifestyle center on the edge of downtown that to revitalize the core with healthy retail along with a pedestrian-friendly main street. Lincoln wisely decided not to take the easy out and build a lifestyle center. Instead, thoughtful city leaders chose to reinvest in downtown and avoid the long-term negative social and economic impacts that would have resulted from creating a competing retail center.

Downtown Salt Lake City faced a similar problem and blinked. Mainly because of the city’s larger sized blocks, creating a successful, pedestrian-friendly shopping street would be difficult. Instead of facing the challenge, Salt Lake City developed “The Gateway,” a pseudo-Mediterranean lifestyle center on the edge of downtown that competes with the existing center city retail environment.

The suburban shopping malls of the past contributed to the decline of the city centers across the country. Lifestyle centers are no different. Although lifestyle centers may be economically successful in the short term, they compete with a city’s urban core, encourage automobile dependence and, in the long term, contribute to a city center’s economic and social decline.

Ironically, lifestyle center developers and designers understand what it takes to create a vibrant retail environment, while regional governments often do not. Development of lifestyle centers are an indictment of our government’s inability to create or adopt policies and plans that support true “main street” town and regional centers.

Simply put, lifestyle centers are merely props, “stage sets” and caricatures that are poor substitutes for authentic mixed-use town centers.

Historic Road Design Process Produces Historic Results

In light of the historic compromise highway plan that can end a generation of controversy about the Kirby-Whitten Road through Shelby Farms Park, we are revisiting our November 7 post about the "context sensitive design" process that produced this result.

Two main points about today's announcement about the road compromise:

One, Shelby County Mayor A C Wharton deserves major credit for orchestrating these positive resolution to this thorny issue;

Two, we can now turn our attention to what's really important: creating a nationally important park at Shelby Farms Park. For more than two decades, we've been distracted by the divisive arguments about the road. Now, the Shelby Farms Park Master Planning Committee can create a plan for the future - sans road - that the entire community can embrace.

Here's the slightly abbreviated earlier post:

For a generation, the proposed highway through Shelby Farms Park has been political quicksand that trapped county mayor after county mayor. Shelby County Mayor A C Wharton – with the considerable help of Tennessee Department of Transportation Commissioner Gerald Nicely - not only has escaped the trap, but he can now claim credit for the process that produced a solution that the entire county can embrace.

It seemed an unlikely outcome in February when Mayor Wharton launched yet another process to search for answers to the long-standing question of where and how the highway should be situated in Shelby Farms Park. And yet, the 17 people whom he appointed have hashed out their differences and found a road alignment and design that would resolve the 20-year battle between park lovers and development interests.

For the first time in the history of this controversial project, the committee appointed to look into this question was actually balanced with equal attention given to environmentalists, the public and development industry representatives. For the first time, it was not environmental interests that were grumbling about the process. Rather, the grumbling has come from developers who complained that the committee too quickly dispatched the design they had championed for years - a six-lane, high-speed highway just west of Patriot Lake.

The committee’s compromise proposal – which appears to give park lovers more than they gave up in the process – is a major achievement for the Wharton Administration as it looks for achievements to spotlight in campaign brochures for next year’s election.

To get an idea of the significance of this recommendation, just consider that there are children who entered kindergarten and have graduated from college and never remember a time when there was not a divisive dispute about the design and alignment of Kirby-Whitten Parkway Connector Road through Shelby Farms Park.

Conventional wisdom said that the battle lines were immutable. Yet new attitudes by Tennessee Department of Transportation, the Wharton Administration and Friends of Shelby County Park came together to create a new dynamic that gave birth to a “context sensitive solutions (CSS)” process that produced the new road recommendations.

Endorsing the use of this CSS approach for the first time in Shelby County, TDOT sent the strong message that road-building in Tennessee has fundamentally changed under the direction of Commissioner Nicely, the first non-roadbuilder to head up the department in recent memory. Instead of building roads, Nicely’s reputation was made as an advocate for public-private partnerships that revitalized downtown Nashville. His philosophy has predictably met with some bureaucratic foot-dragging, but slowly and surely, he has forced TDOT to see its constituency as more than the politicaly powerful road-building industry.

With this encouragement, Mayor Wharton appointed the special advisory committee that has now recommended a gently curving, four-lane highway that snuggles against the western border of Shelby Farms Park as much as possible. The shift westward – removing once and for all the intrusive wider, faster highway near the heart of the parkland – was the first indication that this time around, things would be different. When the road was reduced from a six lanes to four lanes and the speed limit set at 40 to 45 miles an hour, the hand writing was on the wall.

The entire process has been a stunning victory for environmental interests, which did not get everything they wanted but found room for compromises they could live with. Some “no roaders” remain unconvinced, but their number has dwindled as environmentalists stuck with the process and ended up winning most of the major issues.

Major credit goes to Friends of Shelby Farms Park, which shifted from a recalcitrant position opposed to any road to becoming a source of influence for a site-sensitive design. A key decision by the group was the hiring of nationally prominent engineer Walter Kulash, who evaluated every planned alignment and provided convincing evidence of why the six-lane, high speed highway with massive interchanges (proposed as recently as three years ago by county government) was simply unnecessary and would devastate the park.

The Context Sensitive Solutions process has been slow to get to Memphis. It’s been used for years by traffic engineers across the U.S. as they balanced the transportation needs and environmental needs of their regions. The road through Shelby Farms Park has been on local governments’ transportation plans for 36 years. What’s been missing during that time has been a single, simple element – sensitivity to the impact of the highway on the 4,500-acre park.

In the end, injecting this balanced approach into transportation decisions – for too long the province of development interests and government engineers – may be a legacy contributed by Shelby Farms Park that’s almost as important as its recreational assets.

There remains 24 to 27 new lanes of roads pointed directly at Shelby Farms Park and still on our community’s transportation plans, and it would be tragic if each of them results in the protracted, divisive debate that has characterized the Kirby-Whitten Parkway.

If the Metropolitan Planning Organization (chaired by Mayor Wharton) is smart, it would use this occasion to take more definitive action to ensure that the Context Sensitive Solutions process is not a one-time experiment, but a policy for every highway built in our community.

That’s an outcome that would make this committee’s recommendation more than copy for a campaign brochure, but a chapter for the history books.

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.

Changes For PILOT's Should Include Reporting Entire Cost To Taxpayers

Emily Trenholm must sometimes feel like the tiredest member of the Donner Party. If she dozes off, there’s just too much that can happen.

As executive director of Community Development Council of Greater Memphis, Emily is apparently the designated community representative on the 13-member Mayors’ Joint PILOT Review Committee. She is surrounded by people who make their livings off the tax freezes they are are now asked to objectively evaluate.

Apparently, the political pressure to protect the PILOTs (payments-in-lieu-of-taxes) is so great that there isn’t much pretense of assembling a representative group to evaluate the changes recommended to the PILOT program by consultants. The call for the overhaul of the tax freeze program comes at a time when yearly property tax increases are the norm, but these PILOTs continue to mount, now waiving $60 million a year in city/county property and personalty taxes.

On the Mayors’ Joint PILOT Review Committee with Ms. Trenholm are the people who head up the public agencies who dole out the tax freezes, there are people from the economic development agencies who defend the tax freezes at all cost, there are a couple of beneficiaries of the program’s largesse and whose companies each have more than $2 million in waived taxes, and people whose professions are closely dependent on real estate development (which seems to be the real purpose of the PILOTs in the first place).

Then, there is Ms. Trenholm, representing an agency that lists one of its roles as making sure that the interests of community development are considered in policy decisions. This one looks like the ultimate test for her organization.

Last week, according to the latest article in the fine coverage by The Commercial Appeal’s Amos Maki, the PILOT consultants who recommending the reinvention of the tax freezes program finally were invited to present their findings.

Central to their recommendations is the belief that the PILOTs have become entitlements given to any one who can complete the application form. Michael Laube, principal of Nex Gen Advisors, said in the article: “You don’t need a program that’s one size fits all. Let’s change the system around where the key measure is what is needed for that development, how much is needed and when it is needed.”

That makes such eminently good sense that it would seem that it could be adopted by acclamation. But that’s never the case when the subject of tax freezes come up.

While it’s difficult to imagine why this committee appointed by the mayors was needed, especially since the authority to grant tax freezes rests with Shelby County Board of Commissioners and Memphis City Council, but when faced with a politically volatile situation, the appointment of a committee is always a reflex.

In the end, what is most needed in city and county governments is a new attitude. Their officials need to quit seeing themselves as supplicants and instead, see themselves as investors. That’s because in truth, that's what they are. They represent a partnership between the taxpayers of this community and a business. Because we place a value on a company and its presence in our community and its positive impact, we choose to invest in it. Until officials see the difference in being an investor and being an beggar, we will continue to pursue low-wage, low-skill strategies that in the end will drag our region down.

The most interesting suggestion made by the consultants last week was that until land use decisions must be tied to economic development decisions. Now there is no connection, and as a result, we are constantly taking one step forward and two steps back.

That’s because PILOT decisions are made in a vacuum. Without an overall land use plan, companies simply choose to locate anywhere they please, including in areas where there is no transportation to link the employment base with the new jobs, where the infrastructure is inadequate and where public transit is nonexistent. This is seen in areas like Holmes Road and Hickory Hill, where essentially every warehouse in sight has a PILOT and is paying no taxes, but before the tax freezes were approved, there was no thought given to this being the best land use, to whether the area has adequate public transit or to whether there were sustainable transportation plans for the future.

Put simply, amazing as it sounds, there was never an effort that connects the decisions governing PILOTs to a more comprehensive, overall plan and to waive taxes in places where the existing infrastructure had already been paid for by local taxpayers. Too often, as a result of PILOTs approved by the Memphis and Shelby County Industrial Development Board, city and county governments then have to spend more money to build roads, bridges and sewers, but these factors weren’t considered in the evaluation process.

While changes are being considered to the PILOT process, here’s a recommendation from us. Every PILOT should have a fiscal note that tells not only the amount of taxes being waived, but any costs that will have to be incurred by the taxpayers through their local governments as a result of the PILOT. Tax freezes don’t operate in isolation, and if we are to act as investors, we need to know the size of the entire investment that we are making in each company.

The Myth Of The Growing County Schools' System

It’s an immutable law of modern politics that no matter what else you do as an elected official, you have to keep your base happy. No matter what.

Sadly, in recent years, this inviolate belief has grown to obsession, spawning an epidemic of robotic talking points aimed at solidifying “the base,” regardless of whether they are backed up by facts or not.

On its worse days, it produces a pandering that undercuts confidence in the entire political system. On its best days, it is merely comical, as politicians of various stripes merely ignore the facts of the debate and repeat ad nauseum the same tired bullet points.

It’s as if many politicians have become prisoners of their base, ignoring any hint from the broader public that their rhetoric and their actions should at least have passing acquaintance. And most amazing of all, when politicians do this most masterfully, news reporters even pick up their rhetoric as if it is fact.

We thought of all this as we read recent coverage of the attempt to get Shelby County Schools some quick money - $3 million, to be precise.

Two paragraphs in The Commercial Appeal coverage caught our eye.

The first was one in which reporter Michael Erskine stated as a fact, without any attribution, the following: “County school leaders are in line to get funding for a new elementary school next fiscal year, which would provide much-needed capacity.”

The second: “‘The need is extremely apparent,’ said (Commissioner David) Lillard, who said the county system simply can’t keep up with the growing number of students.”

It’s amazing how many phrases, such as “much-needed capacity,” find their way into news articles, although they are essentially opinion. In this case, the reporter endorses the viewpoint of Shelby County Schools, but of course, doesn’t offer a scintilla of information to back up his statement.

This brings us to Commissioner Lillard’s comment. In proposing the “emergency” funding for county schools, he continued his “no matter what” support for Shelby County Schools. After all, he advocated the Arlington High Schools, county government’s latest Valentine to sprawl. It’s in the wrong place and won’t be needed for years, if ever. Later, he was cheerleader for the Southeast Shelby High School, which has the distinction of being at the fatal intersection where politics and logic collide with the inevitable fatality, logic. This high school is to be built at the worst possible location, based on worst possible justification and using the worst design capacities.

What makes this even more confounding is the fact that as a lawyer, Commissioner Lillard has the reputation for having the best nose for the facts of a business deal of any one in his profession. That’s why it’s so surprising to hear him make the argument that it is growth that demands that the county district gets more funding and more schools.

This argument is made although the website of Shelby County Schools puts its enrollment in the 45,000-student range, and the Memphis Tomorrow study of school funding – led by county schools’ officials – set enrollment in the range of 46,000 students. In other words, using its own numbers, Shelby County Schools acknowledges that its enrollment peaked in 1999 with 48,770 students, a fact pointed out in various independent studies about growth patterns in Shelby County.

And yet, county school officials are allowed to trot out their time-worn argument about overcrowding, as they have done most recently with their latest educational innovation, the proposal to open the so-called Schnucks’ School in an abandoned grocery store south of Germantown.

Ironically, areas characterized by sprawl and the derivative development it produces are represented by county commissioners who tend to vote against tax increases and argue for cuts in government expenses, while it is their district that is largely responsible for the county’s climbing debt. This is especially true any time the subject turns to county schools.

But Commissioner Lillard is not alone in being deaf to the truth and blind to the facts. That’s because the county school district’s core contention that its schools are overcrowded appears questionable.

In the end, it’s possible for any school district – including Memphis City Schools – to paint a picture of overcrowded schools. All it needs to do is to adjust its classroom capacities. For example, to produce overcrowded schools, Shelby County Schools calculates capacities at 15.5 students for each elementary school classroom; 18 students for each middle school classroom; and 20 students for each high school classroom.

Meanwhile, Memphis City Schools bases its capacities on 20 students per elementary classroom; 24 students per middle school classroom; and 28 students per high school classroom.

In other words, by adjusting the classroom capacity, a school district can essentially determine whether it’s overcrowded or not. In fact, Memphis City Schools could simply adopt the county district’s equation and then no schools would be closed under Superintendent Johnson’s Five-Year Comprehensive Plan.

What’s most disturbing is that so many of the positions of Shelby County Schools seem rooted in simply, old-fashioned manipulation – political, religious, financial and racial. And as is often the case when politicians serve a narrow political base so dutifully, it’s all the taxpayers who end up paying a price.

How About Hiring The RDC To Clean Up Downtown?

Walking through downtown Memphis, memories of Tokyo often come to mind.

In one of the largest cities in the world, regardless of the neighborhood or part of the city, the streets are immaculate and the sidewalks are clean. That’s because each morning, in a wholly Japanese sense of the collective, store owners sweep off the sidewalks and clean the gutters in front of their businesses.

Meanwhile, buses unload volunteers who come to the center of the city to clean the gardens of the Imperial Palace.

Looking out the windows of a corporate boardroom in a skyscraper overlooking the Imperial Palace and the Ginza, one Memphian commented: “The city is always so clean. You must have some really tough fines for littering.”

“We don’t have any laws against littering at all,” came the answer.

“Then why don’t people litter?” asked the Memphian.

“Because they’re not supposed to,” the Japanese host explained incredulously. “It’s our obligation to the community, because we live so close to each other, and the city needs to look as good as it can for all of us.”

It’s a civic ethos taught to even the youngest member of the community in Japan, and walking through downtown Memphis, it’s easy to wonder if we’re instilling just the opposite.

On our walks, we regularly pick up trash, ranging from dog excrement to broken beer bottles to what appears to be kitchen garbage. Sometimes, as an experiment, rather than pick up the trash, we leave it there, curious to see how long it will be before any city crews clean it up.

About a month ago, someone appeared to dump a small garbage can near Union and Front. We walked by it every day, and finally, convinced that it might stay there until summer, we picked it up.

It’s often confusing to most downtowners to know who is responsible for cleaning up our city’s common ground. The Center City Commission has responsibility for most of the downtown footprint and city crews are responsible for areas that border the footprint.

Whatever the division of labor is, it’s not working, so here’s our suggestion.

Hire the RDC to do it.

Regardless of your opinion about the Riverfront Development Corporation’s plans for the downtown riverfront (and we are enthusiastic supporters), there can be no debate that the riverfront has never been cleaner or more attractive.

RDC staff members are firm believers in “management by walking around,” and there is little that escapes their attention, from planting and weeding the landscaped medians to cleaning up rights-of-way and riverfront parks.

It seems a good time to entrust the cleaning and maintenance of all of downtown to the RDC, because its track record proves that it is up to the task.

Ethics Reform Should Begin With Nonpolitical Legal Opinions

Sometimes, it’s the petty corruptions accepted as part of the every day workings of government that are the most amazing.

We thought of that yesterday in light of the way that one assistant county attorney surfaced in a variety of ways that sabotaged the prospects for a payroll tax and the commissioner who proposed it.

First, you have to understand that unlike their Memphis City Council counterparts, county commissioners don’t have their own lawyers who look out solely for their interests. Rather, commissioners are told that assistant county attorneys (all of whom serve at the “will and pleasure” of the county mayor, not the commissioners) represent them as well as the mayor’s administration.

It probably didn’t help that the commissioner in question had criticized the size of the retainers paid to assistant county attorneys regardless of how much or how little work they did.

So, here was Shelby County Commissioner John Willingham. To have his best chance at making his arguments about the fairness of a tax on income, he needed the help of a legal advisor in the county attorney’s office. He didn’t get it.

It’s not that we didn’t expect the outcome. As we wrote previously, it seemed more than passing strange that when Willingham asked a fundamental question that would be critical for the future of his tax reform proposal, the question wasn’t sent to a constitutional scholar whose impartiality was beyond question. Instead, his request for a legal opinion was farmed out to an assistant county attorney who happens to be a Republican Party leader in the “anybody but Willingham” wing of the party.

As a result, it was no surprise at all when the assistant county attorney wrote the expected legal opinion shooting a hole in Willingham’s main campaign platform, which was aimed at taxing the 88,000 non-residents of Shelby County who work here. His plan proposes to end the wheel tax, reduce the county property tax rate by 25 percent, end the local option sales tax, produce an overall reduction in the amount of taxes paid by most taxpayers and forbid any increases in any taxes for 10 years and only then by referendum.

The importance of the payroll tax issue in the upcoming election had already been foreshadowed in a telephone poll almost masquerading as a push poll, asking voters loaded questions such as, would they support Willingham if they knew he was trying to raise their taxes, etc.

Although Willingham has labored for two years to get the fair hearing that his proposal seemed to deserve, most political forces lined up against him. The political hierarchy of his own political party painted him as a kook, despite his days as an appointee in President Richard Nixon’s Administration and his dozen patents, and in truth, his tendency to see conspiracies made him a frequent, and easy, target.

Remember the old Alexander Haig joke that ended with the punchline: “Even paranoics sometimes have reason to be paranoid.” Well, it seems that even conspiratorially-minded people have reason to see conspiracies sometimes.

So, first, the legal opinion on Willingham’s seminal campaign issue was assigned to an assistant county attorney with a well-known political hostility to him. Second, the legal opinion has the power to rip his main issue out of his hands. Third, the damning legal opinion was delivered the day before the qualifying day for candidates.

But there’s more.

The same day that Willingham received the legal opinion fatally wounding his “Tax Fairness Proposal,” the county building received a number of newly printed brochures from Willingham’s opponent in the upcoming commissioner’s race. There, listed prominently among his opponent’s supporters was the name of that very same assistant county attorney.

Over the years, the appointments of assistant county attorneys, assistant public defenders and assistant divorce referees – yes, there are dozens and dozens of them - have been plum political appointees, and unsurprisingly, they are filled with men and women with uncommon political instincts. Perhaps it’s time to select these people solely on their legal acumen, rather than on their contributions and connections.

A good start in that direction would be to enact policies that prevent these public lawyers from endorsing any county elected officials or any candidates for county office. At a time when government is trying to remove the impressions of insider influences and special rules for special people, this would be a good place to start.

Wanted: The Young And Restless

From the Washington Post:

By Carol Coletta and Joseph Cortright
Monday, February 13, 2006

Recent headlines about the latest census data on U.S. cities have had city leaders --most notably D.C. Mayor Anthony Williams -- fretting. According to the new numbers, Washington has lost about 20,000 residents over the past five years at a time when Williams very publicly pledged to add 100,000 people by 2010.

While these reports should certainly be cause for concern, city leaders would be wise to shift their attention to another set of data that points to a positive trend occurring in cities: the preference among 25- to 34-year-old college-educated workers to live in neighborhoods within three miles of a city's center.

Why is this demographic -- and its geographic preferences -- important?

Over the past four decades, we've enjoyed rapid growth in the quantity and quality of the U.S. workforce. But the three decisive forces that drove this growth -- the sizable baby boom generation, the dramatic economic impact of women entering the workforce and the impressive increase in college graduation rates -- will run out of steam or shift into reverse in the next two decades.

In response, cities must focus their energies on attracting and retaining a group we call "The Young and Restless": young, mobile, college-educated workers. They are a key indicator of the economic success of cities in the knowledge economy, where prosperity hinges on the ability to come up with new ideas.

A recent study by the organization CEOs for Cities ("The Young and Restless in a Knowledge Economy") revealed that this demographic is roughly 34 percent more likely to prefer close-in neighborhoods than people in other age groups (up from 10 percent in 1980 and 12 percent in 1990). This was true in every one of the top 50 metropolitan areas in the United States.

Metro areas with vital centers will fare better in attracting talented young adults.

To continue with the example of Washington, data from the 2000 Census show that this city's close-in neighborhoods have a higher level of college attainment than in most other close-in neighborhoods in large U.S. metropolitan areas -- higher than Atlanta and much higher than fast-growing Phoenix or Las Vegas.

More than 65 percent of the 25- to 34-year-olds living within three miles of the center of the region (measured from the White House) have a four-year degree or higher level of education, a rate only slightly lower than for close-in San Francisco (67 percent) and significantly higher than hip Seattle (56 percent).

City planners in the District clearly appreciate the significance of vibrant neighborhoods, showcased by the new theaters and shops downtown as well as the city's marketing campaign "City Living, D.C. Style." Walkable destinations, lively commercial districts and interesting streets are attractive to the Young and Restless. Good public services, including transit and parks, can also make close-in neighborhoods more appealing.

The ability to capture these young people is already playing an integral role in some cities' economic success. Booming metro economies such as Charlotte, Austin, Atlanta and Portland, Ore., have increased the number of college-educated adults about five times faster than the nation as a whole. Cities that are losing young college graduates, such as Hartford, Conn., and Rochester and Buffalo, N.Y., are struggling.

So whether the census numbers are right or wrong may not be as important to cities as it used to be. What's clear is that cities will succeed or fail depending on how much they appeal to this talent-rich pool. And if the number of cranes dotting the D.C. skyline and the still-hot housing market are any indicator, the city continues to position itself well in the race for talent.

Joseph Cortright is an economist with Impresa Inc. Carol Coletta is president and chief executive of CEOs for Cities, a network of urban leaders committed to strengthening America's cities.

The 10 Regions of Tennessee, Part 2: Tax-Sharing

Some major cities, notably Portland, OR, and Minneapolis, have traced much of their competitive success to their multi-county taxation authority. In these places, rather than joint taxing being a divisive force, it is a unifying force that led local governments to work together, rather than see themselves as enemies and competitors.

If such taxing authority here could include the North Mississippi counties of the Memphis MSA, it would be truly revolutionary (it would take the help of the Mississippi Legislature), attracting national attention for its creative thinking on funding public services. Most of all, to the delight of workers living outside of Shelby County, it would take off the table the payroll tax as the preferred funding source for regional services and replace it with multi-county taxing that gives North Mississippi a voice in what the revenues are used for. It’s a much more politically palatable option for non-Shelby Countians.

The existing tax system is hopelessly outdated, because it is set up in a way that presumes that every jurisdiction is self-contained and its interests are walled off from its neighbors. But in the real world, things work altogether differently.

In truth, the entire region is a functioning whole. As we’ve written before, as a result, the activities that produce tax revenues – and the needs for them – have little geographic relevance to the distribution of those taxes. That’s why we’ve advocated more rationality in the current tax system to define once and for all what’s a municipal service – whether we live in Memphis or Millington – and what’s a regional (or county) service, and to put the services on the appropriate tax base. For example, if schools are countywide, all educational costs should be placed on the countywide tax base, that of Shelby County Government, cutting the tax rate of Memphians by a significant amount. Also shifted to the regional tax base are services funded now by the City of Memphis but enjoyed by the entire region -- museums, the zoo and downtown amenities.

What happens when there is no rationality and no imperative for regional cooperation is the competitive attitude that exists here today. Regional economic development officials may repeat all the platitudes about regional cooperation in op-ed pieces printed in The Commercial Appeal, but behind the smiles is a cutthroat competition on all sides that lies at the heart of the relationship that no amount of rhetoric can gloss over.

The consequences of multiple jurisdictions competing over a finite tax base as it does today – such as Collierville’s pursuit of another huge shopping center that is unjustified in the marketplace – ends up as a net loss for the region. It results in zoning of commercial and retail property designed to create optimal taxes, rather than the optimal community, and in the end, it inevitably erodes the overall quality of life for the region.

There is no such thing as winners and losers in such a competition. It is only about “today’s winners,” because such policies eventually will result in shopping centers springing up somewhere else and choking off the one booming in Collierville today. And of course, the biggest loser is the urban center. In the end, it’s the flight of revenues that most devastates Memphis, and in the end, this leads to public policies that see public subsidies like PILOTs as the answer to thwarting more financial loss.

This vicious cycle can be broken with a regional way of pooling taxes, which are then reallocated throughout the area. This helps break the mismatch that exists between the social needs and the taxes to address the needs, it helps to remove the incentives that spur on sprawl and it helps to end the intergovernmental fight for scarce public revenues.

When it comes to tax-sharing arrangements, conventional wisdom should be set aside. In Minneapolis-St. Paul, while the suburbs subsidized the central cities 30 years ago, it reversed later when older suburbs were in decline and needed help.

The Metropolitan Council in the Minneapolis-St. Paul seven-county region uses its tax-sharing authority to reduce the disparity between rich and poor jurisdictions. The revenues for the Council come from all governments placing 40 percent of the growth of their commercial and industrial property tax base into a regional pool, and this amount is then redistributed on a per capita basis.

From the pool, several hundred million dollars a year is redistributed, and in some years, Minneapolis – with a strong downtown and residential areas – is a net contributor to the fund, which focuses on regionwide priorities like public transit and light rail, parkland, water quality and smart growth.

Meanwhile, in Portland, the Metropolitan Regional Government administers programs in a three-county, 24-city region. Born from the region’s environmental ethos, the government today coordinates land use and transportation. However, equally important, it helps to pay for regional services like the convention center, performing arts center, stadium, exposition center and regional parks.

The innovative tax policies of Portland and Minneapolis/St. Paul did not just happen. They both came about because of entrepreneurial leadership by state government, which passed the legislation that allowed this unique approach to regional problem-solving to exist in the first place. But first, state officials need some leadership from here, and it would seem that Shelby County Mayor A C Wharton - as chair of MPO, as head of the Homeland Security region, as the head of the largest regional government and as the untiring proponent of new tax policies - would take up the mantle for a new look at taxes. As we've said before, the energy of the mayor and our community would be better spent restructuring our tax system than chasing new revenues sources such as development fees that are merely band-aids on a system that is bleeding to death.

It’s now been pointed out to state officials that Tennessee has 10 regions. It’s time for their help, and a first step is to give each region the authority to set up a regional tax-sharing system that inspires regional thinking and action. Now, who has the political courage to try to get it on the public agenda?

The 10 Regions of Tennessee

Forget the out-of-date notion about the three grand divisions of Tennessee – West, Middle and East. According to the University of Tennessee Center for Business and Economic Research, there are actually 10 distinct regions in our state.

Now, the real challenge if for state government to frame its policies, especially taxing authority, within the reality of these regions.

Region 1 is comprised of Shelby, Fayette, Hardeman, Haywood, Lauderdale and Tipton Counties. Other regions are divided similarly with a cluster of counties bound together in a region by economic and demographic similarities that lend themselves to shared economic growth strategies.

In the profiles of the 10 regions, our region has the flattest population growth between 1990 and 2003 – 11.1 percent. Meanwhile, the Nashville region recorded 31.2 percent; Knoxville saw 21.3 percent growth; and Chattanooga had 14.6 percent. To put it into perspective, our population growth was well below the state’s average of 20 percent and the U.S. average of 17 percent.

Therein lies a serious problem. It is not population growth for growth’s sake. It is Memphis’ lack of success in attracting talent that is needed to compete and succeed in the knowledge economy. With population growth that is essentially births over deaths in Shelby County, we are on an economic bubble unless we can attract new, young, technologically-savvy workers to the Memphis region.

The news was also bad in the category of employment growth between 1993 and 2003. Of the regions centered around one of the state’s major four cities, Memphis was the lowest performer. The 13.9 percent rate of employment growth is below the Tennessee average of 14.9 percent and well below the national average of 17.2 percent. As a frame of reference, the Nashville region recorded 24.7 percent employment growth.

The glimmer of good news was found in our place as second highest percentage of people with bachelor’s degree and per capita personal income. In the Memphis region, 23 percent of the people older than 25 years old have college degrees. Only Nashville is higher – 26.2 percent. The state average was 19.6 percent, but the national average was 24.4 percent.

As for per capita income, Memphis trailed only Nashville - by $1,150, but we were well ahead of Chattanooga and Knoxville – by an average of about $4,100. The Memphis region is higher than the state per capita income, but less than the U.S. average.

The development of this new regional context for Tennessee was a welcome development, because it’s based on a more rational approach to economic development. In the past, state government simply dealt with the three “grand divisions of Tennessee,” or the 95 counties of Tennessee, but both were based on geographic boundaries that had nothing to do with shared economic factors and a shared economic future.

While the report about regions makes for an interesting look at the way the state’s economy really works, the test is for state government to now apply them to economic development and public policy development. Already, the Tennessee Department of Economic and Community Development refers to the 10 regions in its plans, but as we know from past experience here, it’s much easier to adopt the language of regionalism than create the reality of regionalism.

The ultimate test lies in ECD’s ability to rally the various city and county jurisdictions within each region around a shared vision and shared plans for the future. Rather than just reconfigure already existing state programs around the new 10 regions, state government should do something really visionary, such as passing the authority for regional tax-sharing authorities for each region.

Now, that would be a breath-taking in its leadership.

Tomorrow: Lessons From Other Cities