There's been a lot of discussion lately about luring Amazon to build its second company headquarters, to be called Amazon HQ2, in Memphis. In early October, the city council voted to offer the mammoth online retail giant $60 million in cash incentives to move to the Bluff City.
"Amazon, here we come," said council chairman Berlin Boyd, after the vote. To which I say, slow your roll, Berlin.
To put the council's offer in perspective, consider that last summer, the Grizzlies paid $94 million to sign Chandler Parsons to a four-year deal.
To put the offer in even more stark perspective, consider that Amazon is worth more than $500 billion (with a "b"), and Amazon founder Jeff Bezos' personal worth is around $87 billion. Offering Amazon $60 million to come to Memphis is like offering to buy Chandler Parsons dinner at Folk's Folly in order to get him to accept a trade to the Brooklyn Nets.
Pardon me if I don't have much optimism about this deal.
Many cities around the country are eager to become home to Amazon's HQ2, and why not? The company says it plans to spend $5 billion to build its new facility, which would theoretically create 50,000 new jobs, including 2,500 positions that would pay at least $60,000 a year. That's a big game changer for any city. For Memphis, it would be transformative.
According to city leaders, there could be other incentives from Shelby County, the state of Tennessee, and the Economic Development Growth Engine (EDGE) in the package, but few details have emerged.
But let's take a look at Memphis' competition. Dallas is offering a $15-billion bullet-train-based headquarters. New Jersey Governor Chris Christie is putting together an incentive package worth $7 billion, including up to $10,000 for each job created. Philadelphia is offering three sites with 28 million square feet of development space in an area already served by transit, retail, and residential spaces. Chicago, Phoenix, and other major cities are also readying pitches for the October 19th deadline. And Stonecrest, Georgia, is offering to rename itself Amazon, which is certainly going the extra mile.
Amazon has set forth several "key preferences" for its proposed new second home: Suitable buildings and sites are of "paramount importance." Other preferences cited include a "stable and business-friendly environment and tax structure," incentives from local and state governments, and finally, there's this: "A highly educated labor pool is critical and a strong university system is required."
No offense to our fine local colleges and universities, but it would be difficult to make the case that Memphis has a highly educated labor force. In a 2017 WalletHub ranking of the country's 150 "best-educated cities," Memphis comes in at 114, just behind Montgomery, Alabama. Only 39 percent of Memphians have a college degree.
Don't get me wrong. I truly hope the city pulls off a Memphis miracle and lands the Amazon deal, but we'd be foolish to count on it.
If, as seems likely, we don't get it, we should look at the experience as a learning opportunity, a wake-up call to face the conjoined issues of poverty and a subpar education system that are holding so many of our citizens — and our city — back.
This will no doubt be called a case of comparing apples to oranges, but what if we came up with a Payment-in-Lieu-of-Taxes (PILOT) Program to motivate local businesses and corporations to raise their minimum salary to $15 an hour? Or how about using some of those "cash incentives" to pay top-of-the-market teacher salaries in order to lure better educators to the city? Or, since car-centric cities are falling behind the curve, how about coming up with ways to combine county, state, and EDGE money to invest in a modern, high-tech transportation system.
Memphis has a lot going for it and I'm optimistic about the city's future, but if we don't land the big one, maybe we could seriously begin to think outside the traditional box and create our own transformative change.
Or maybe we could just get the Grizzlies to sign us to a four-year deal.