Tag: Robert Lipscomb

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Editorial Opinion

Time To Step Up

We like Mayor A C Wharton. We appreciate his unmatchably reassuring presence as the head of city government. We are grateful for the sigh of relief he allowed us to take after the several stormy years we experienced under the latter phase of the Willie Herenton administration. But, increasingly, we find ourselves wondering: Can he govern our city as well as he represents it?

The question has acquired some currency of late, both among citizens at large and in local civic and governmental circles. One city hall denizen surprised a Flyer reporter recently by saying: “If [former Mayor Willie] Herenton announced for mayor tomorrow, I’d go door to door for him.”

There is no likelihood of that happening, of course; the former mayor is wholly invested these days in a charter-school enterprise, which he’s struggling to make work, and he seems to be burned out on electoral politics. Moreover, our confidant was and is no Herenton partisan: His point was that the current mayor, for all his initial promise, seems unable to govern effectively.

To preside over ceremonies, yes. To announce exciting-sounding initiatives, clearly. To churn out resonant and quotable sound-bites, sure. (TV reporters, especially, love him for that.) But to get results? Let’s look at the recent record. There was the extravagant signing ceremony last August, on the eve of the 50th anniversary commemorations of the Martin Luther King-led March on Washington, in which the mayor met the media in the company of AFSCME union representatives and the honorably grizzled veterans of the sanitation strike of 1968. His purpose was to announce, at long last, a pension arrangement for the city’s long-term sanitation workers. The only problem was that he hadn’t disclosed any of this to members of the Memphis City Council, who weren’t on hand for the ceremony, didn’t know the details of the proposed arrangement, and were faced with having to unravel them from scratch. Just last week, the council finally brought the pension matter to a vote but found itself unable to approve the increased user fees involved. And without them there would be no new equipment and none of the savings needed to pay for the pensions that were dependent on them and were actually voted on, and … you get the idea.

Add to this fiasco the several recent development projects brainstormed by city housing chief Robert Lipscomb and ballyhooed by the administration but, once again, without the full revelation to the council of the details, some of them debatable, that could make these projects work. Further, there were few responses to the council’s requests for more information.

Now there’s the matter of a proposed purchase by the city of AutoZone Park. From the administration was heard the usual cry of “Act now! There’s no time to waste!” But the council has been there and done that so many times by now that, once again deprived of all the advance details needed to make a decision, it has wisely chosen to postpone the decision.

Mr. Wharton, we like you, but in the wake of these events, it is now incumbent upon you to demonstrate — especially since you intend to run again — that you know how to work with the council to get things done in a collegial, timely, and fully transparent manner.

Categories
Politics Politics Feature

Loaves and Fishes

CREDIT: John Branston

Shelby County commissioners — on the record — and Memphis City Council members — off the record — are giving vent to serious misgivings that the proposed Fairgrounds Tourist Development Zone project being vigorously pushed by Memphis mayor A C Wharton and city development director Robert Lipscomb would cannibalize funding for other major tourist areas, as well as that for Shelby County schools.

It was the alleged threat to school funding that had prompted county commissioner Steve Basar to make city government’s latest TDZ project a discussion item at last week’s committee meetings. Basar estimated that sales-tax rake-offs from the fairgrounds TDZ project, as proposed by Lipscomb, would cost county schools, already struggling financially, roughly $1 million a year over a 30-year period.

John Branston

Robert Lipscomb

County finance officer Mike Swift agreed that both the state’s portion of sales-tax proceeds in the TDZ and the local-option sales-tax portion could be claimed by the proposed TDZ area. He added, “To the extent that it would impact the local-option sales tax, half of that off the top goes to schools, and therefore it would be a reduction in what goes to schools.”

The commission’s discussion occurred a day after Lipscomb had held a town meeting with members of the Cooper-Young community, many of whom expressed serious reservations about the proposed TDZ.

Amping up the argument for the opposition is the fact that Lipscomb, either intentionally or inadvertently, had previously failed to disclose the full local impact of the TDZ process in his public discussion of the fairgrounds proposal. On February 19th, when Lipscomb first briefed members of the city council about the project, he began by saying, “We’ll go through this quickly. We won’t go into a lot of detail.”

Then, in the broad exposition that followed — one that posited retail opportunities at the fairgrounds as well as the refurbishing of the Liberty Bowl and the development of a sports complex — Lipscomb had this to say: “We wanted to make sure you were aware we want to use non-local [our italics] tax revenue for this project. And the way we do that is to get a tourist development zone … [tapping] increment dollars over and above what we send to the state. … If we don’t do this, that money goes directly back to the state, so it’s important that we do this today.”

In reminding his council listeners that TDZ financing involves capturing “incremental” sales-tax proceeds above a preexisting “baseline” of existing proceeds, Lipscomb had thereby made a point of mentioning only the “non-local” proceeds that would be tapped for the new TDZ. And, in emphasizing the urgency of staking a claim on funds otherwise due to the state, he made no mention that the project would also appropriate the local share of incremental sales-tax proceeds from a large area adjoining the fairgrounds.

An artificially large adjoining area, in fact, as Basar, supported by Commissioner Mike Ritz, noted at last week’s committee meeting — one involving both Overton Square and the Cooper-Young district, among other income-producing areas.

“They gerrymandered the zoo. They gerrymandered Overton Square. They gerrymandered Cooper-Young,” Basar told his fellow commissioners.

Interestingly enough, back in February, when Lipscomb was doing that acknowledged quick once-over with the council, he, too, had openly used the term “gerrymander” to describe the extension of the proposed fairgrounds TDZ zone into an expanse bounded on the west by Belvedere, on the north by Parkway, on the east by Flicker Street, and on the south by Southern Avenue.

Such a wide swath put the existing commercial areas within it in the position of feeding potential retail rivals at the redeveloped fairgrounds, Basar said, as well as co-opting their own prospects for tapping the incremental sales-tax revenues generated by their own economic activity.

After Lipscomb, preceded by Wharton, made his brief pitch to the council in February, the council had proceeded in short order — on a motion by Reid Hedgepeth, seconded by Shea Flinn — to give Lipscomb a green light to present his plan to the state buildings commission, which must okay it.

The state has not yet acted on the proposal, and, meanwhile, some members of the council, speaking off the record, are expressing reservations about giving any further endorsement to the TDZ project, based on last week’s commission discussion about how local sales-tax revenues would be affected.

As is often the case in what they say about Lipscomb’s projects, council members express themselves gingerly and prefer in most cases to remain anonymous. In his position as city housing director, Lipscomb stands astride a federal pipeline potentially worth millions of dollars in projects council members covet for their districts. As a result, members of the council are loath to put themselves publicly in opposition to the powerful administrator.

As the Flyer‘s John Branston put it in a 2011 profile of Lipscomb: “True mover-and-shakerdom in the government realm equals influence times tax money under control times territory under control times number of years on the job. Add to that the fear factor, or how freely colleagues and people who have to do business with you feel they can speak candidly. On each count, Lipscomb is a man to be reckoned with.”

So it is that council opposition to a Lipscomb proposal usually takes the form of passive resistance, as when an ambitious TIF (tax increment financing) project he proposed last year was allowed to wither on the procedural vine without being put to the test of an actual council vote.

This was the “Heritage Trail” project which sought to have virtually all of downtown declared a blighted area so as to set aside sales-tax receipts for a 20-year period in order to redevelop the Foote Homes area. As is the case with the current TDZ proposal, members of the county commission weighed in on this one.

Back then, Basar said, “The people there are not for it, and it’s so disproportionate as to be a huge waste of resources.” And his commission colleague Steve Mulroy added, “It’s asking too much of too big an area for too long for too small a target zone.”

Time will tell what happens to the current fairgrounds project, but last week’s public venting of consequences surely gave potential opponents fresh ammunition.

Jackson Baker

Raumesh Akbari

• Raumesh Akbari, a 29-year-old lawyer and political newcomer, won last week’s Democratic primary for the vacant District 91 state House of Representatives seat against six opponents.

As most observers had predicted, turnout was low for the special primary election, made necessary by the death this summer of longtime incumbent Lois DeBerry. Only 1,812 votes were cast, with 502 going for winner Akbari.

Two contenders bearing established political names did less well than expected. Kemba Ford, daughter of former state senator John Ford, finished third, with 355 votes, and Doris DeBerry-Bradshaw, a cousin to the late Lois DeBerry and sister of state representative John DeBerry (D-District 91), finished sixth, with 111 votes.

Runner-up to Akbari was Terica Lamb, with 399 votes. Others were: Joshua Forbes, fourth with 261 votes; Clifford Lewis, fifth with 134 votes; and Kermit Moore, seventh with 47 votes.

There were no Republican candidates, and there was no Republican primary. Akbari’s only opponent in the November 21st special general election will be Libertarian Jim Tomask, listed on the ballot as an independent. The winner of that election will hold the office until the next regular election cycle in 2014.

A Cordova High School graduate, Akbari attended Washington University in St. Louis and St. Louis University School of Law, where she was president of the Black Law Students Association.

Akbari’s legal residence is still in the Cordova area, but, as state representative Barbara Cooper, a supporter, says, the new party nominee has been staying of late with a grandmother who lives in District 91 and presumably will seek a permanent residence there or elsewhere in the district.

As Cooper explains it, Akbari’s current domicile resulted from the family’s feeling that the grandmother, who had recently experienced a break-in, would be reassured by having her granddaughter on hand.

Categories
Opinion

Fairgrounds Redo: Will Third Time Be Charmed?

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The 89-page Fairgrounds redevelopment plan released this week is the third major one since 2006 so I’m taking my time digesting it.

The Looney Ricks Kiss firm did one in 2006 that, obviously, didn’t go anywhere. The RKG Associates consulting firm did a 2009 study as well as the one that came out this week. The 2009 study was pessimistic about the $125-million public/private financing proposal for a sports-oriented Tourism Development Zone. The current one is optimistic about a $233-million public/private proposal for a sports-oriented TDZ.

Same property, same qualified public use facility (Liberty Bowl Stadium), but different economy (recession then, comeback now), different mayor (Herenton then, Wharton now), different developer at risk (Henry Turley and Robert Loeb then, unnamed now), different master/enabler (a city-appointed Fairgrounds Reuse Committee then, Robert Lipscomb, head of the Division of Housing and Community Development, now) and different fate of Fairview school at the key corner of Central and East Parkway (out then, in now).

Turley’s Fair Ground plan, which I wrote about here, is not mentioned in the 2013 RKG report despite the obvious similarities. Turley got state approval for a TDZ but ran afoul of the City Council and Lipscomb, who said his fees were too high, which Turley disputed. The new plan needs state approval, and a presentation is tentatively scheduled in mid-October. After that it will also need City Council approval.

In a supporting letter, Wharton wrote that “the fairgrounds project will also serve as the central hub of the city’s family-tourism expansion through its developments at Graceland, Bass Pro at the Pyramid, and the Riverfront.” He makes no mention of the proposed Crosstown project which is less than a mile from the edge of the Fairgrounds TDZ and is seeking $15 million in public funds. The Bass Pro Pyramid is part of a separate TDZ.

In short, Memphis is betting on a whole lot more free-spending tourists coming our way.

As the name suggests, the key to a TDZ is tourism spending as opposed to local spending that would have gone somewhere else but for the new development. In a TDZ, Memphis gets to keep the incremental increase in state sales taxes above a baseline number.

The baseline number is important in determining what “new” revenue can be used to pay off the bonds. From the new report:

“The analysis by RKG Associates concludes that the projected baseline retail sales are approximately $214 million, and as a result there are ample sales tax revenues — projected at $14.3 million yearly beginning in 2016 — to support the bond payments of $11.9 million annually.”

And from the 2009 RKG report: “The estimated stream of sales tax revenue, while significant, is not necessarily new revenue. Additionally, under the assumptions of the bonding in this analysis, the projected stream of sales tax revenues is insufficient to retire $112,264,000 in bonding.”

One more negative note from the 2009 report: “By the very nature of retail there is always some degree of transferred retail sale. In the context of the Mid-South Fairgrounds, it is likely that the majority of retail sales will be transferred sales from existing merchants.”

The 400,000-square feet of “destination retail” that would bring in new money in the current fairgrounds plan is not named. Nor is the operator of the “180-room hotel/conference center.” The location would be north of Tiger Lane and south of Central Avenue. Obviously, it matters whether the retail is a destination for East Memphians or Nashvillians and Mississippians.

The report says “the Fairgrounds redevelopment is being driven by the City of Memphis as owner” and “based on the city of Memphis vision and design” the city will seek “a retail development company” for the property north of Tiger Lane and another developer/operator for the sports facilities south of Tiger Lane. There is no mention of fees.

However there is this statement:

“Using the TDZ as the vehicle for financing the Fairgrounds redevelopment and carefully calibrating a plan of redevelopment, the City of Memphis continues to build economic engines, as it has done with the redevelopment of The Pyramid into destination retail and a tourist attraction.”

Well, let’s hold that praise until after Bass Pro actually opens. As the report says elsewhere, “there is no assurance that actual events will correspond with the assumptions on which such estimates are based.”

The proposed three-square-mile Fairgrounds TDZ would include big Midtown tax generators such as the Memphis Zoo, Overton Square, Union Avenue and the soon-to-be rebuilt Kroger, and Cooper-Young. The report doesn’t flat come out and state cause and effect, but the assumption is that these things are tied somehow to the fairgrounds and the stadium and therefore their incremental tax revenues should be captured.

Again, the big question is what’s the increment? That depends on what the baseline is. The lower the baseline, the bigger the increment. In this proposal, the baseline is 2012 sales tax collections, adjusted for inflation until 2016 when the retails sales stream starts flowing to the fairgrounds bonds.

RKG’s 2013 optimism starkly contrasts with its 2009 pessimism about fairgrounds retail, which went well beyond the recession: “Approximately 80 percent of the sales that would occur at the fairgrounds would come from residents within the primary trade area. Most all of the sales activity would be reallocated sales already occurring elsewhere in Memphis.”

Fairgrounds retail, RKG said then, “would fill a void in the local market area, however it lacks highway presence and the tenant mix to be a regional consumer draw.”

That was then, this is now.

Categories
Opinion

Investing in The Bass Pro Pyramid

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Moved by mordant curiousity and a falling stock market, I called a local bond trader to see how those Bass Pro Pyramid bonds are doing now that the Bassmasters have admitted that this deal won’t be done until late 2014, if ever.

Bass Pro founder Johnny Morris has changed his mind again. The new details are, why bother, check the daily and its puff piece. Something about an elevator. Or an inclinator. Or two of them. This is his baby. It will probably change a few more times. Remember the glass band all the way around when he came here for the big announcement and fish fry a couple years ago? Here’s a less flattering piece from the national media.

All Memphis can do is wait and hope. And invest, if you’re brave enough.

Thanks to Johnny Lessley at Duncan Williams for the bond info. You’ll need a minimum of $5000 or more likely $100,000 to get in the game. These bonds are not widely traded. Mutual funds and insurance companies scooped up most of them in the initial offering. Some days they’re available and some days they’re not. It isn’t like buying cheeseburgers at McDonald’s except that a bad one can make you really sick.

There were three different bonds on this project, two of them taxable and one tax free, with different maturities as far out as 2030. A taxable 2030 will get you five percent interest if you can find one. A tax-free bond priced at $98.50 at issue, slightly below par, is $108 or $109 today. Not because Bass Pro’s prospects or the future of downtown Memphis has changed, but because interest rates have fallen since 2011. The bonds are rated “A.”

They’re backed by Tourism Development Zone (TDZ) revenue. A TDZ is a legislative creation to build convention centers in Nashville and Memphis, since distorted for all kinds of purposes and places. The Bass Pro bonds are not revenue bonds or general obligation bonds, which would be backed by the taxing authority of the city of Memphis. The interest payments come from TDZ funds collected downtown. MLGW is a big contributor. Nothing says “tourism” like “utility company” does it?

Bass Pro doesn’t start making payments until the super store opens. That will improve the debt service outlook because more state sales taxes will be rebated to the city.

Could Bass Pro Pyramid become another AutoZone Park, where the bond holders took what is called “a haircut” and didn’t get the payments they expected? Possible, but those bonds were backed by luxury suite revenue projections which turned out to be way too optimistic. That said, Bass Pro was supposed to be open late this year, so we’re talking about several million in lost sales taxes if this store is the retail monster it is touted to be. And Bass Pro, we have often been reminded, is just one part of the overall redevelopment of the Pinch District and Convention Center. Nothing is happening there, and nothing is likely to happen for at least another year in light of this week’s announcement.

So show your love and buy yourself a bond or two. If you can put your treasure in the promises of Johnny Morris and Robert Lipscomb and the retailing future of downtown Memphis for the next 17 years you’ve got a stronger stomach than I do.

Categories
Opinion

Two Views on Fixing Memphis: Spend More or Spend Less

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“You cannot cut your way to prosperity.” — Memphis Housing and Community Development Director Robert Lipscomb.

“Our high property taxes are one reason people are leaving our city.” — Memphis City Councilman Jim Strickland.

These are the two main positions on the budget talks that will play out over the next several weeks. Keep them in mind and you will miss many a pearl and many a pain but you will “get it” for the most part.

Lipscomb is right. You can’t do nothing and let Raleigh, Whitehaven, downtown, Midtown, the fairgrounds, Frayser, or Whitehaven deteriorate. You have to build on what’s there, give comfort to the community groups and residents who stayed, nurture the anchors, connect the dots, tear down the blight or build something better.

Strickland is right. You can’t raise Memphis property taxes that are already the highest in the state and lower than the surrounding suburbs that are growing at its expense. You have to turn the tide, hold the line, cut the fat, make the tough cuts in the sensitive areas. People of means will make a flight to quality and vote with their taillights.

Lipscomb is wrong. You can’t save the malls. In the era of online shopping, even Wolfchase Galleria, Collierville’s Carriage Crossing, and Oak Court Mall in East Memphis are fighting for crowds and business. You can’t say yes to every council member and neighborhood group with a sad story in a city that is full of them. You can’t say yes to a parking garage in Overton Square without saying yes to a parking garage in Cooper-Young, yes to Madison Avenue in Midtown without saying yes to Elvis Presley Boulevard in Whitehaven and Austin Peay Highway in Raleigh.

Strickland is wrong. The overall tax burden in Tennessee is one of the lowest in the nation because there is no income tax. Memphis property taxes are high but valuations are low. The property tax disproportionately hurts homeowners but the 9.25 percent sales tax disproportionately hurts poor people.

Lipscomb is right. If basic services decline there will be more flight. Public investments can be an incentive to private investments. See Uptown, or AutoZone Park or Bass Pro and the Pyramid.

Strickland is right. Public investments can be wasteful. There is no guarantee that private investors will appear, or that they will deliver the goods if they do appear. AutoZone Park is too big, Beale Street Landing is behind schedule, over budget, and even its defenders are criticizing its appearance. In the fourth month of the year it is supposed to open, Bass Pro is the quietest $200 million game-changer you ever saw, showing all the urgency of a man fishing on a lazy summer afternoon, making barely a ripple much less a splash.

And Mayor A C Wharton is right. As he said in his budget presentation Tuesday, “Sixty cents of every dollar the administration spends is for public safety, and three out of every four general fund employees works in public safety.”

There are 3,032 employees in police services and 1,830 in fire services, for a total of 4,862 of the city’s 6,290 employees. Add another 2,000 employees of the Shelby County Sheriff’s Office, and that makes 6,862 people with salaries, benefits, and pensions in the broad category of “public safety” which is not exactly accurate when you’re talking about, say, secretaries, but very effective when you’re defending your budget to the city council and the county commission. You want to keep criminals off the streets and knock down house fires and rescue people from flooded homes and yet you say you want to cut budgets? Huh? Are you crazy? How dare you!

When I read or hear these public safety numbers I flash to two mental pictures: the daily emergency preparedness briefings for the Great Memphis Flood of 2011 and the overwhelming police response to the Ku Klux Klan rally downtown three weeks ago.

As it turned out, both non-events did not live up to their hype. Both mobilized the forces of public safety to prepare for the worst and put them on display in a sort of trade show for law enforcement. So many mobile command buses, amphibious vehicles, SUVs, Humvees, motorcycles, horses, patrol cars, chief cars, SWAT teams, weapons, shields, vests, computers, GPS systems, radios, laptops, smart phones, satellite trucks, all of it state-of-the-art or close to it because firepower, hardware, and communications technology keep getting bigger and better or smaller and better or faster and better or more powerful and better and who wants last year’s model anyway when the guys on the other side of the mall or the law have this year’s? Especially if you’re the one getting mugged or robbed or your house is flooded or burning. Plus salaries and pensions and overtime. To protect a bigger coverage area while billing it to a smaller tax-paying population.

To summarize:

Can’t close schools, they’re the lifeblood of communities and our children are our future.

Can’t let malls close, they’re the lifeblood of our communities and as the mall goes so goes the neighborhood and besides it’s already in the budget a year or two from now.

Can’t cut public safety because it’s public safety, stupid.

Welcome to another budget season.

Categories
Opinion

Mall Plan would give Raleigh “a fighting chance”

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The Raleigh Springs Mall is in “deplorable” condition but would get a total makeover that would cost at least $36 million in public funds under a plan the city administration and Memphis City Councilman Bill Morrison are pushing.

Morrison, Mayor A C Wharton, Housing and Community Development Director Robert Lipscomb, and architect Tom Marshall presented the plan to about 225 people at The United Methodist church in Raleigh Thursday night. The crowd filled the sanctuary, which was a welcome sight to the church’s minister John Holt, who is used to seeing half that many people at Sunday services.

“There is hope,” Holt said of the latest plan, which has been revised several times in the last three and a half years. The racially mixed crowd applauded speakers several times, and leaders of the Raleigh Community Council, a longstanding neighborhood association, are enthusiastic. Morrison lives in Raleigh, and Marshall grew up there, giving the meeting something of a homecoming atmosphere.

The plan calls for partial demolition ($7 million) and phasing out existing businesses over the next few years, construction of a public library, police precinct and traffic station to replace existing ones ($23 million), and construction of a lake and a large fountain recognizing the history of Raleigh Springs ($6 million). It is hoped that this would attract private development, but no names of interested investors were mentioned at the meeting. A story Friday in The Commercial Appeal put the total price at $60 million including private investment, but that number did not come up at the meeting.

“I was so glad they are not going to remodel the mall,” said Imogene Tisdale, president of the association.

Joy Jefferson, a Memphis police officer, Raleigh resident, and head of the neighborhood watch, said “we’re going to take Raleigh back, and Frayser.”

The mall is more than 40 years old and has lost its anchor retail tenants and movie theater. Marshall called its condition “deplorable” and said there are about 32 small businesses still operating. The owner of one of them, Averill Brittenum, who has operated a custom air-brushing shop for 19 years, was not pleased with some of what he heard.

“I was surprised at how the community was so in favor of it being destroyed,” he said. “I had an eerie foreboding of the destruction of my business. When they talked about Mom and Pop stores it makes me feel expendable. This is my livelihood.”

Morrison promised to fight for funding and said some of it is already in capital improvements budgets going out as far as 2018. “We deserve this,” he said. The plan, he said, “gives us a fighting chance to bring businesses and families back to Raleigh.”

The project, however, faces competition for funding from other big public projects in Midtown, Whitehaven, downtown and other council members’ districts. When the lake feature of the mall came up, there was an echo of the parking garage under construction in Overton Square. Marshall said the low areas on the mall site “might open the door to stormwater funding.” The Overton Square garage covers a stormwater retention pond.

Lipscomb mentioned several of the other public projects underway around the city, and said the administration’s strategy is to fund anchor developments and “connect the dots.”

“You cannot cut your way to prosperity,” he said. “Austerity does not equal prosperity.”

Working the crowd like a veteran politician, Lipscomb said “I am not a czar, I am a public servant. My problem is I can’t say no.”

I think I hung that one on him, and he might want to get a second opinion. When you tell people you’re going to give them lots of nice new things with tax money you influence they usually smile, applaud, and call you blessed. That’s politics.

Categories
Opinion

Stadium ADA Funding Gets Council Approval

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A City Council committee approved spending $12 million on ADA compliance at Liberty Bowl Stadium after being warned that if nothing was done the U.S. Justice Department might “shut the stadium down.”

“Not only could they shut the stadium down, they could hold the whole fairgrounds hostage” said Housing and Community Development director Robert Lipscomb. He said that meant forcing the city to make everything at the fairgrounds ADA compliant, but he did not say what will be allowed to be out of compliance.

The 61,000-seat stadium, which is rarely even half full in recent years, added more wheelchair-accessible seats and companion seats a few years ago but not enough to satisfy the Justice Department. The letter of the law would be one percent accessible seating, or 620 seats and 620 companion seats, but the department typically settles for less. Lipscomb said the city bargained with Justice to lower the cost from $40 million to $12 million, which includes some non-seating expenses. A handout said the reduction was due to “new technology and alternate design solutions.” There will be 564 ADA/companion seats. The maximum projected loss of seats is 2,000.

If the full council approves the expenditure as expected, construction will be done between January and August of 2013. Lipscomb said projected new taxes from a proposed Tourism Development Zone (TDZ) to include Cooper-Young and Overton Square would pay the bills. The council will be asked to vote on the TDZ on January 22, 2013. If approved, the city will apply to the state in February and expects to get approval in June. The vision is a youth sports complex.

Committee members asked few questions about the project. Some said they had a “moral obligation” to vote for the proposal. Three people in wheelchairs came to the meeting but did not speak. Interviewed after the meeting, they each said the current wheelchair-accessible seating is inadequate, but they also each said they do not go to games at the stadium.

“There are a lot of people who are not trying to come,” said Louis Patrick. “This is one of those questions of if they build it will they come.”

Categories
Politics Politics Feature

D.O.A. for Lipscomb Project?

Mayor A C Wharton may have given his imprimatur to city Housing and Community Development director Robert Lipscomb‘s proposed “Heritage Trail” TIF (tax increment financing) project. But whatever members of the city council think of it — and the prospectus there would seem uncertain — enough influential members of the Shelby County Commission have weighed in against it to seemingly render it dead on arrival on the county side.     

Robert Lipscomb

A typical response was that of District 5 commissioner Steve Mulroy, an influential voice among the commission’s majority Democrats. “It’s asking too much of too big an area for too long for too small a target zone” was Mulroy’s preliminary take.

Lipscomb’s proposal would have virtually all of downtown declared a slum so as to set aside sales-tax receipts for a 20-year period for the sake of a new development where Foote Homes is now.

Mulroy expressed doubts, too, that residents of Foote Homes would want to be turned out for the uncertainties of resettlement elsewhere.

A similar point was made by Steve Basar, a Republican representative of the commission’s District 1 and chairman of the body’s economic development committee. “The people there are not for it, and it’s so disproportionate as to be a huge waste of resources.”

Basar was an early opponent of the TIF proposal and began communicating his opposition to it upon first learning of it last month. Commission chairman Mike Ritz made a point at last week’s commission meeting of praising Basar for his resistance to the project and expressed solidarity with his GOP colleague.

Ritz has opposed TIF arrangements in the past and noted at last week’s meeting that a Highland Street TIF approved by the commission in 2007, but dissented from at the time by Ritz himself, had not resulted in the promised construction of a proposed lifestyle center project by the Poag & McEwen firm, presumably as a result of the subsequent recession.          

The project, which involved the purchase of the former Highland Church of Christ property and subsequent razing of it, was heavily supported by the University of Memphis, which envisioned turning the nondescript Highland Strip into an impressive new gateway to the university area.

Back then, Ritz noted that TIFs are normally used for clearly public projects such as housing developments, street and sewer improvements, lighting, and parks. He saw the Highland project as a “gift” to the developers and said, “There has been no analysis done on this project, and it contains no performance requirements.”

Last week, the moribund Highland TIF served as fodder for a new warning from Ritz about the advisability of ambitious TIF projects like the one currently proposed by Lipscomb. The commission chairman, a first-termer and something of an outlier back then, may be preaching to the choir this time around.

A quick canvas of other commission members indicates that a majority of them, even some who normally split with the chairman on the currently volatile issue of schools, concur.

Opposition may be developing on the city council, too. Council members contacted so far are either noncommittal or have expressed disapproval of a sort unusual on that body for a Lipscomb project.

It may never get that far.

After Lipscomb discussed the plan at a well-attended meeting of the Community Redevelopment Agency last week, Chairman Michael Frick assured those present, including several opponents, that the plan was still in the early stages of consideration and was unlikely to move forward to either the council or the commssion anytime soon.

Serious opposition to the TIF has developed among agencies and individuals concerned with downtown development, especially after two recent Flyer articles by my colleague John Branston gave wider exposure to the proposal. • Informal remarks emanating from Governor Bill Haslam and Lieutenant Governor/Senate Speaker Ron Ramsey continue to provide useful information as to the likely shape of legislation in the forthcoming session of the Tennessee General Assembly.

Press reports from Nashville and East Tennessee indicate that a guns-in-parking-lots bill, which caused a major schism in Republican ranks in the 2012 legislative session and never got to the floor, may be cocked and ready for passage in 2013.

Haslam was quoted last week as saying that he expects to see a compromise measure passed in the forthcoming session of the General Assembly but one that precludes storing firearms in vehicles on college campuses. The governor continues to oppose the idea of guns on campuses.

A bill allowing guns to be kept in locked cars in parking lots was vigorously pushed by the National Rifle Association in the 2012 session but encountered stiff opposition from major business interests in the state, including FedEx in Memphis, and was never called up for a vote. State representative Debra Maggart (R-Hendersonville), then the GOP caucus chair, was blamed by the bill’s supporters for blocking it in the House, and the NRA played a major financial and organizational role in getting Maggart defeated for reelection in this year’s Republican primary.

Meanwhile, Ramsey told educators at a luncheon meeting in Blountville that he expected a guns-in-parking-lots bill to pass in 2013.

Hank Hayes of the Kingsport Times-News quoted Ramsey as saying, “I’ve already got it drafted. … The [newspaper] headline will be ‘Guns on Campus,’ but that’s not what we’re talking about. Something is going to pass this year. I want to put this behind us and forget about it.”

Ramsey spoke to the terms of a likely compromise. “We may exempt out schools, that’s fine, but even then we’re talking about public parking lots. … There’s got to be a way to keep it in a car legally.”

There may still be serious opposition among lawmakers in the Republican majority to a guns-in-parking-lots measure, however. As state senator-elect Frank Nicely (R-Knoxville), who was regarded as one of the more conservative members of the House during several terms there, said, “If a property owner tells someone you can’t bring a yo-yo on his property, much less a gun, you can’t bring it on that property.”

• On another front, Haslam ended several weeks of suspense by announcing Monday that Tennessee would not operate its own health-care exchange under the Affordable Care Act. The governor maintained that his was a “business” decision, not one based on political considerations.

Haslam’s action does not mean that the elements of the act will not be accessible in Tennessee, only that they will be operated exclusively under federal auspices and under federal regulations.

In a news release explaining his decision, Haslam said he had never been a “fan” of the Affordable Care Act, viewing it as “harmful for small businesses and costly for state government and the federal government,” but had given serious consideration to the formation of a state exchange to administer the act: “I’ve said that I think Tennessee could run a state exchange cheaper and better, and my natural inclination is to keep the federal government out of our business as much as possible.”

But, he said, “The Obama administration has set an aggressive timeline to implement exchanges, while there is still a lot of uncertainty about how the process will actually work. What has concerned me more and more is that they seem to be making this up as they go. In weighing all of the information we currently have, I informed the federal government today that Tennessee will not run a state-based exchange.”

Haslam left a hedge, though: “If conditions warrant in the future and it makes sense at a later date for Tennessee to run the exchange, we would consider that as an option at the appropriate time.”

• FedEx founder Fred Smith, a significant donor to Republican causes and candidates, has been one of the key voices urging a shift in the congressional GOP’s resistance to raising tax rates. In an interview with CNN last week, Smith had this to say:

 “There’s a lot of mythology in Washington, such as, it’s small business that creates all of the jobs in the United States, and if you raise the rates on the top 2 percent, you’ll kill jobs. The reality is, the vast majority of jobs in the United States are produced by capital investment in equipment and software that’s not done by small business. It’s done by big business, and the so-called gazelles, the emerging companies like the new fracking oil and gas operations. It’s capital investment in equipment and software that’s the solution to our economic problems, not the marginal tax rates on individuals.”

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Opinion

Downtown Heritage Trail Gets a Hearing

Robert Lipscomb

  • Robert Lipscomb

Downtown residents and activists — sometimes one and the same — are a savvy lot. They like to be in the loop. So about 25 of them turned out Thursday for a meeting of the Community Redevelopment Agency to see what’s up with the blockbuster 20-year plan called Heritage Trail.

I told a curious colleague that “nothing happened” at the meeting, but on second thought that is not exactly right. The fact that these people came to the meeting of an agency that fills its meeting room about as often as the 100-year flood is significant in itself.

Heritage Trail, previously called Triangle Noir, has been around for years. The target area is south of FedEx Forum, but the potential funding area is a much bigger chunk of downtown. Its author is Robert Lipscomb, head of the Memphis Division of Housing and Community Development (HCD) and executive director of the Memphis Housing Authority. Downtowners have learned to pay attention to anything that has his fingerprints on it.

As well they should. Many a grand plan starts out as a consultant’s report loaded with jargon and details about monster economic impact and possible creative funding sources such as PILOTs and TIFs that mean little to the average person. They go to second-tier agencies such as the CRA for original endorsement, then to the Memphis City Council and the Shelby County Commission. Depending on who wants to do the deal and how badly they want to do it, the proposal can suddenly move from the drawing board to the fast track. Then the argument will be made that so-and-so has already signed off on this, studies have been done, state and federal funds hang in the balance (or a small amount has already been appropriated as bait), and elected officials must act NOW.

At the meeting Thursday, the CRA board chairman, Michael Frick of Memphis Bank of America, repeatedly assured the small crowd of people opposed to Lipscomb’s Heritage Trail plans that “this is still early in its development,” that “the plan has not emerged from our committee yet” and “at the end of the day everything we do here has to approved by the City Council and County Commission.”

“I hate for everybody to spend a lot of time on something that is not going to happen,” he said, adding that a vote might not come until February.

If and when that happens, Heritage Trail is in for some tough sledding because downtowners have learned to pay attention and get involved early and often when something comes out of HCD.

Categories
Opinion

Blockbuster Plan for Downtown Would Declare it “Blighted Menace”

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Downtown leaders and property owners are being asked to weigh in on a blockbuster 20-year redevelopment plan that would capture $100 million in taxes and spend it on a public housing project and “Heritage Trail” by declaring all of downtown a slum.

The Flyer obtained a copy of a previously unpublicized memo from the Downtown Memphis Commission that was sent to board members and, by them, to other downtowners this month. It discusses a proposed Community Redevelopment Agency (CRA) under the control of the Memphis Housing Authority and the Division of Housing and Community Development, currently headed by Robert Lipscomb. The City administration wants the input of stakeholders before the City moves forward with this plan. The focus is redeveloping Cleaborn and Foote Homes, housing projects in the southeastern part of downtown.

From the memo:

“The CRA is established “to combat slum and blighted areas that constitute a serious and growing menace, injurious to the public health, safety, morals, and welfare of the residents of Shelby County.” To provide CRA with jurisdiction to adopt and implement the Master Plan, the CRA is considering declaring Downtown Memphis to be a slum, blighted, and a growing menace.”

The proposed master plan, a 196-page document dated September 13, 2012, includes the entire downtown core, the Beale Street Entertainment District, the South Main District, the South End, Victorian Village, the Edge Neighborhood, and part of the Memphis Medical Center. It targets some 200 downtown parcels for CRA acquisition by purchase or, if necessary, eminent domain. A master developer would be hired by the CRA.

From the memo:

“To begin funding implementation of the Master Plan, the CRA would establish a Downtown tax-increment-financing (TIF) District that would redirect future property tax revenue growth generated Downtown over the next twenty years from the city and county to the CRA. It is projected that over twenty years the TIF would redirect $102,751,238 of city and county property taxes to the CRA. The bulk of this revenue would be generated in the out years, with the first five years generating less than 1.5% of the projected revenue.

“It is projected that 98.7% of this future, incremental TIF revenue will be generated by private properties primarily in the Downtown core outside the Focus Area of the planned improvements. The Cleaborn and Foote Homes redevelopments are expected to generate 1.3% of the TIF revenue over twenty years. PILOT roll-offs are expected to generate 44.5% of the TIF revenue, and general property value inflation is projected to generate 47.5% of the TIF revenue.”

The Master Plan includes 27 miles of streetscape improvements, 6 miles of new streets, and 17 acres of new parks. The TIF funds along with federal grant money would help support the public housing redevelopment in the southeastern section of Downtown, but the source of funding for improvements throughout the remainder of downtown is not identified, nor is a budget or schedule provided for such improvements.

An earlier plan in the Herenton mayoral era dubbed Triangle Noir focused on a much narrower area around Cleaborn and Foote Homes.

The memo asks several questions, including:

How will needed improvements in the rest of Downtown be paid for?

What happens to ongoing private development initiatives if the CRA officially adopt this new, largely unfunded Master Plan for Downtown?

What are the lost opportunity costs of borrowing against and spending twenty years of property tax growth in Downtown Memphis?

If the next twenty years of property tax growth in Downtown Memphis is pledged to pay for the public housing redevelopment project in the southeast corner of Downtown, then how do other important Downtown plans and projects get funded over the next twenty years?