How to Mask "The Ask"

International Paper's curious approach to community engagement.



Fairly or not, and whether it goes or stays in Memphis, International Paper is going to be known as the Fortune 500 company that raised the ante on corporate tax incentives.

The company that said "me" when others were saying "we."

The company that wants to inoculate itself against property tax hikes for 30 years.

The company that responded to hard times and a call for community engagement with a threat to disengage.

Some of this is not IP's fault. IP is following the lead of Electrolux, FedEx, Mitsubishi, Belz Enterprises, and numerous other companies that have tax freezes, which are a Memphis specialty of long standing. And let's say it was just bad timing that IP made its "tax-freeze-or-else" request at the dawn of the feel-good "Robert Pera era" of new ownership of the Memphis Grizzlies and while Shelby County residents, some of them anyway, were voting on an increase in the regressive sales tax.

But people get paid good money to create and polish a corporate image. And CEOs have a skill set that includes community engagement. On that score, IP is conspicuously inconspicuous. Yes, it is a top-three corporate giver to Mid-South United Way, and many of its 2,000 local employees doubtless participate in all kinds of community projects. What's missing is a signature project like this:

The Salvation Army Kroc Center and McDonald's founder Ray Kroc; the Peabody hotel and Jack Belz and family; FedExForum; AutoZone Park; the Memphis Redbirds and Dean and Kristi Jernigan; First Tennessee Fields and youth baseball and the First Tennessee Memphis Marathon from 1987 to 2000; Justin Timberlake and Miramichi; the late Abe Plough and the Plough Foundation; J.R. "Pitt" Hyde and the Hyde Family Foundation; "NBA Now" and Staley Cates and Mason Hawkins of Southeastern Asset Management; the Bill and Melinda Gates Foundation and public education; the Regions Morgan Keegan Championships and men's pro tennis; Cellular South and women's pro tennis from 2003 to 2011; the FedEx St. Jude Classic and pro golf; Shelby Farms and the Lucius Burch State Natural Area; the Levitt Shell and the Mortimer Levitt Foundation; downtown development and the Henry Turley Company; the Mike Rose Soccer Complex.

Some of these people and companies aren't even in Memphis, but their names are still associated with something good.

Lest anyone doubt the power of getting on the right side of community engagement, here is a sample of the love in one newspaper column this week about Robert Pera and the opener: "historic day ... glorious ... self-effacing ... triumphant ... a day of transition and celebration ... crank up the joy ... splendid ... for the goosebumps not the tax write-offs ... dazzling."

Image polishing is not everyone's cup of beer. Frauds like Allen Stanford can blow into town and throw around other people's money while anonymous donors give away millions. A low profile can be a sign of character. The Memphis CEOs, politicians, and heads of charitable organizations that I talked to about IP were wary of being judgmental or speaking on the record.

"It's a pretty big ask," said one businessman who is familiar with local tax incentives. A political veteran said "it would send a terrible message" to other companies who might follow suit. George Little, chief administrative officer for the city of Memphis, was not able to produce a document detailing IP's specific request but told me "it's very much a work in progress."

Nobody plays the community engagement card more skillfully or more frequently than the owners and promoters of sports teams and games. AutoZone Park was too big, too expensive, and ran afoul of the IRS, but all that was masked in the glow of 2000. Tiger Lane, a sop to the football crowd, was sold as a 365-days-a-year playground. Michael Heisley got his price from Pera and friends, who, presumably, are not in business to lose money.

John Faraci, the CEO of International Paper (who makes less than Rudy Gay), told me in an interview earlier this year that IP's signature Memphis project is the National Civil Rights Museum. All right, but get in line. A natural fit for IP and Greater Memphis would be Overton Park or Meeman-Shelby Forest with its 13,467 acres of bottomland hardwood forest, lakes, trails, ball fields, boat ramp, and swimming pool.

Unlike Overton Park, Meeman-Shelby Forest is remote and a bit of an orphan and could use a corporate angel now and then. And IP could use some cover. Better late than never.

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