That's how it works in economic development. Like other cities, Memphis has to pay to play to attract companies like Mitsubishi, Electrolux, and Bass Pro Shops. The price is millions of dollars in tax breaks plus public improvements in exchange for jobs, investment, spinoff businesses, and a positive story to tell.
Electrolux and Mitsubishi are good catches. The total number of jobs will be around 1,500, and the combined investment will be more than $600 million. Big deals, but not quite as big as the Volkswagen plant in Chattanooga (2,000 jobs), the Toyota plant near Tupelo ((1,350 jobs), the Amazon distribution facility in Chattanooga (1,400 jobs), the Nissan plant in Canton, Mississippi (3,300 jobs) or the Nissan plants in Smyrna (6,700 jobs since 1983) and Decherd (1,300 jobs since production started in 1997) in Middle Tennessee. But certainly preferable to the loss of 1,900 in Union City in West Tennessee when Goodyear pulls out.
A lot of people in Memphis are probably thinking either, "I hope I get one of those jobs" or else "I hope the people who get those jobs buy a house in my part of Memphis."
We have a bad housing market. Memphis is certainly not alone in that regard, but our problem is compounded by low density — a population of 670,000 and a city of more than 320 square miles.
Two things are slowly killing Memphis. One is the "For Sale" signs all over town, indicating the outmigration of our population and the difficulty of selling a house when there is a glut of housing. The other is the tax imbalance between Memphis and its suburbs in Shelby County, where property taxes are as much as 40 percent lower and signs in front of subdivisions near annexation boundaries proclaim "No City Taxes."
The city of Detroit is taking an aggressive approach to its glut of housing and scarcity of residents, as described this week in a story in The Detroit News. In addition to giving incentives to businesses to move to Detroit, the city gives incentives to young people and police officers to move into neighborhoods such as Midtown, an older part of the city.
The program is called "15 by 15," and aims to attract 15,000 new residents by 2015. It has the backing of Michigan Gov. Rick Snyder and Detroit Mayor Dave Bing.
I live in Midtown Memphis. I confess to a little envy when I read about corporate welfare, and I suspect I am not the only one. No, we're not job creators, but we're taxpayers of several years, owners and customers of local businesses and public services, and our small businesses pay full freight. Houses aren't selling, and the only "incentive" anyone is offering is the lower price accepted by the homeowners who do sell. No homeowner gets a PILOT.
So, welcome employees of Electrolux and Mitsubishi and, possibly, Bass Pro Shops. Live up to the bargain. Live in Memphis, not DeSoto County, Mississippi or Fayette County or Tipton County Tennessee. Remember who is giving you the incentives to be here. And tell your friends to come too.