From South Memphis to Southwind, Memphis is losing value. Two people who ought to know say so. Both are professionals, and neither is an alarmist or a naysayer.
One of them is Shelby County asssessor Rita Clark, whose job is putting a dollar value on houses, buildings, and land for tax purposes. The other is auctioneer John Roebuck of Roebuck Auctions, one of the leading real estate auction firms in the South.
They calculate value differently. Clark and her staff use computer models, comparables, sales histories, and first-hand "windshield" inspections. Roebuck wields a microphone and a gavel and stands in front of a group of buyers and opens the bidding.
But they've come to the same conclusion: Real estate prices are declining, which reverses a long trend of increasing values.
"Memphis is a strange city that does not dip and rise like other parts of the country," Roebuck said. "Right now, Memphis is down about as far as I can remember in 30 years."
He said people are leaving the city, demand for housing is low, and there is a surplus of new homes and condos. Even the owners of some million-dollar homes are turning to auctions as a way to unload their property.
"Auctions get a bad rap," Roebuck said. "An auction typically brings the true market value that day. Appraisals are just one man's opinion."
He expects to see "a substantial reduction" in home values in the next countywide reappraisal in 2009, leading to an overall decline in the tax base.
Clark doesn't disagree with that evaluation.
"Absolutely," she said, when asked if the tax base in Memphis could be shrinking, although she declined to put a number on it at this time. "We follow the market. We don't predict the market."
Clark will leave office next September after serving 10 years. In the 1998, 2001, and 2005 reappraisals, the total value of assessed property in Memphis increased an average of 14 percent each period. The suburbs were up even more, led by Collierville (up 24 percent in 2005) and Lakeland (up 30 percent in 2005).
Higher property appraisals are an indication of a healthy economy and provide a cushion for Memphis and Shelby County governments, which operate primarily on property taxes and sales tax. If housing prices continue to fall, lower appraisals will mean lower tax collections and less money for schools, police and teacher salaries, sports facilities, parks, and debt service.
There is also the prospect of no tax collections at all from some property owners. Memphis is one of the top foreclosure markets in the country. Foreclosures are expected to get worse in 2008 as subprime mortgages are reset at higher rates.
The usual way to balance the budget in Memphis and Shelby County is with a tax increase, but Memphians already pay the highest property tax rate in Tennessee. The smell of scandal is in the air. Houses aren't selling. Values are declining. Mayor Herenton got only 43 percent of the vote. The 2008 City Council will have nine new members. And they're going to increase taxes? Don't think so.
Other signs point to a stagnant city that is getting poorer, not richer. In banking as in real estate, it looks like the big money has been made for a while. This has been an awful year for banks. The stock price of First Horizon, the last of the big Memphis-based banks, is $21 a share compared to $43 a year ago. The share prices of other regional banks with a big presence in Memphis, including Regions, Renasant, Trustmark, and Cadence, are all down at least 30 percent this year and are at or near five-year lows. FedEx, our corporate jewel, is off 15 percent so far this year.
At the risk of piling on, there is an unsettling tone in the public relations campaign to "liberate" the National Civil Rights Museum from "corporate interest domination." Unsettling because it sounds like the preelection rhetoric of our soon-to-be fifth-term mayor who as much as wrote off the white vote. So much for public-private partnerships.
The $30 dinner entrée, the $570 a night hotel suite, the $140 Grizzlies ticket, the $45,000 SUV, the $40,000 a year college tuition, and a $30 million public boat landing look like relics of a golden age. Let's hope Memphis can still support them a year from now, but I wonder.
Ethics codes are so yesterday. Tennessee Waltz, Main Street Sweeper, Tarnished Blue, Tarnished News, and "Same Game Different Name" have thrown politicians, cops, and journalists into a hopeless state of confusion.
Ethics shmethics. What they need is a fee schedule to help them fairly and honestly value their services in today's ever-changing marketplace.
Well, Mr. Monetize is here at your service.
Dear Mr. Monetize: What would Kant say about all of this?
Immanuel Kant, a founding member of the Memphis City Council, is famous for his "categorical imperative," which reads in part: "Act only according to that maxim whereby you can at the same time will that it should become a universal law."
Because of the confusing structure and irregular syntax of this sentence, it was later amended by ordinance on a unanimous vote to read: "Do what you can get away with as long as you can point to somebody else who had an even better deal."
Dear Mr. Monetize: I'm an elected official who's bad at math. How many ways can I monetize?
A bunch. There are 13 City Council members and 13 county commissioners plus 14 city and county school board members. Like Kant said back in the day, each one of you is a potential independent contractor or consultant-to-the-max under universal law. Multiply all those numbers and the result is a really big number.
Dear Mr. Monetize: So how much should I charge for services?
It depends on the nature of the service, the timing, and the size of your cojones. But these guidelines should be useful. Prices are subject to change without notice, and holiday discounts may or may not apply. Coupons may not be used in some situations.
Consulting: The sky's the limit! A monthly retainer of $5,000 is entirely appropriate. On an annual basis, $100,000 and up is more like it. The "contingency fee" or "finder's fee" of one-half of 1 percent may yield a better return if the contract is large and the client is generous, stupid, or desperate. Step one is to print some business cards that list your occupation as "consultant."
Setting up a meeting: A fee of $20,000 is standard, plus the cost of food, drinks, and napkins if required. (A mark-up should not be charged on those items, however.) For a simple office meeting, a fee of $1,000 for the first consultation is reasonable and customary.
Phone call to mayor: $100, plus carrier charges.
Phone call to cuss out reporter: $500, plus carrier charges. The fee must be returned if the reporter bites back.
Phone call to constituent: no charge. But remember: leads, leads, leads!
Phone call to assistant U.S. attorney Tim DiScenza: oops! Wrong number.
Personal visit to member of quasi-public board with power to dispense monies in excess of $10 million: $750 per visit. If provider is a member of board, fees are tripled.
Sucking up to mayor: job paying at least $80,000 a year plus pension benefits.
Insulting or cussing out mayor: $50 per television interview, with an additional $50 each time the clip airs. Get residuals!
Dear Mr. Monetize: I'm a cop who knows some bad shit that went down in the department. What should I do?
Get in line.
Dear Mr. Monetize: I am a print journalist. Recent actions of the City Council, the County Commission, and federal prosecutors regarding so-called strip clubs have caused a certain amount of shrinkage, if you know what I mean, in our publication, which used to feature full-page pictures of sexy young women with huge monetizers. What can I do?
You could start with that picture at the top of this page.
Let's have a cheer for the administrators of Memphis City Schools, who produced a comprehensive and revealing new report on scholarships and high school graduates, and for school board member Kenneth Whalum Jr., who publicly recognized it.
And let's have a jeer for the local media, which ignored the report and remained focused on football, food programs, and the ongoing grand jury investigation.
The 2007 Annual Scholarship Report came out last week, the same week, coincidentally, that Secretary of Education Margaret Spellings said she was considering using federal authority to make states report graduation rates the same way.
"I think we need some truth in advertising," Spellings told the Associated Press in a story that was not picked up locally.
Here are the highlights of the MCS graduation and scholarships report:
• There were a total of 5,886 graduates in 2007. Only 1,568 of them, or 27 percent, got scholarship offers. A college scholarship is not a gimme. The total value of scholarships offered was $97 million, but only $49 million of that was accepted.
• It is quite possible that somewhere in Memphis there is a "$1 million student." A single four-year athletic or academic scholarship to an elite college can be worth $150,000 or more. Given the zest with which some students and parents fill out college applications, it's conceivable that somebody got into six or eight elite schools and was showered with scholarships worth $1 million.
• The MCS motto "Every Child. College Bound. Every Day." is simply not realistic. For one thing, only 70 percent or so of students graduate, depending on how the graduation rate is being calculated these days. And the percentage of graduates who go to college, although not reported in the annual report, is obviously less than 100 percent.
• The scholarship data, which is compiled by school guidance counselors, may be flawed by different counting standards or miscounting. For example, Cordova High School reported that 60 percent of its 373 grads were offered scholarships. No other school achieved more than 35 percent.
• The education benefits of the Tennessee Lottery are overhyped and overrated. Lottery scholarships were accepted by 862 students, or 14 percent of the Memphis graduating class. In other words, only one out of seven Memphis grads qualified for a scholarship and stayed in Tennessee, while six out of seven did not, despite the inducement of $3,000 to $4,000 in financial aid per year. And it is reasonable to assume that some if not most of those 862 students would have gone to Tennessee colleges anyway.
• Athletic scholarships are false hope for most students. A total of 117 students accepted athletic scholarships, worth $4.4 million. That compares to 131 students who got scholarships for leadership or service, worth $4.2 million. Fairley and Melrose got the most athletic scholarship offers, even though they are medium-size schools.
• The magnet effect is as strong as ever, and it applies to athletics and academics. White Station High School is unbeaten in football this year. Six years ago, the team struggled to win one game. But good coaches and good players attract more good players. And there are as many ways for a football star to get into the school of his choice as there are to get into the end zone. White Station had more graduates (441) than these six schools combined: Manassas (38), Oakhaven (102), Southside (102), Treadwell (74), Westside (51), and Westwood (62).
• Having said that, scholarship offers are pretty widely dispersed: Central ($7.8 million to 113 students out of 342 graduates); Cordova ($10 million to 224 students out of 373 graduates); Craigmont ($5.6 million to 86 students out of 277 graduates); Fairley ($4 million to 47 students out of 179 graduates); Hamilton ($3.6 million to 30 students out of 214 graduates); Overton ($3.2 million to 79 students out of 284 graduates); Ridgeway ($13.2 million to 115 students out of 325 graduates); Whitehaven ($6.9 million to 82 students out of 369 graduates); White Station ($19.3 million to 160 students out of 441 graduates); and Wooddale ($3.3 million to 46 students out of 300 graduates).
Other schools such as East ($466,000 to 37 students out of 192 graduates) and Kirby ($795,000 to 18 students out of 220 graduates) are not getting as much attention. Are optional schools hurting them? Are counselors not selling them? Are college recruiters ignoring them? The next thing MCS should do is find out.
There is no statute of limitations on notoriety.
In March, George Tiller was sentenced to 10 years in prison without parole for selling 20 prescription pain pills for $100 to a police informant on three occasions at the Olympic Gym in Southaven. The drug, hydrocodone (Lortab), is used by millions of people and abused by a few of them, including Rush Limbaugh.
The sentencing range for illegally selling a controlled substance in Mississippi is unusually broad: a $5,000 fine and no prison time on the low end to a $1 million fine and 30 years in prison on the high end. Tiller pleaded guilty to what is called an "open plea with a cap," meaning he put his fate in the hands of the judge.
George Tiller has an extensive criminal record. An amateur boxing champion and all-state football player at Germantown High School in 1958, he signed with the University of Tennessee, lasted less than a year, got kicked out of the Marines, and lived on the edge as a street fighter, jailhouse enforcer or "rock bull," and "mule" for Mexican drug dealers. His brothers Mike and Albert and their cousin, Charles "Dago" Tiller, were also notorious Memphis tough guys who did prison time. Mike is believed to have been murdered in DeSoto County years ago, but his body was never found. Charles Tiller, beaten nearly to death with a baseball bat in prison, died in 2004 while serving 200 years for a double murder. Albert died two years ago.
I watched an outdoor boxing match on Beale Street with George last fall. The eyes that glared in police mug shots were no longer fierce, but he was still a hard-looking man, 6'-3" tall and flat-bellied from daily workouts. His hair was silver, and his face was smooth and dark. The beer was free where we were standing, but he sipped a Coke instead. He recalled his own ring record of 11 wins in 12 fights and joked that maybe he could take on another geriatric ex-Golden Gloves boxer, Mayor Willie Herenton, who was about to "fight" Joe Frazier.
At his sentencing before DeSoto County Circuit Court judge Robert Chamberlin, Tiller talked about his notoriety.
"My name, wow, Tiller, I guess it must still ring a little feather in the hat or maybe a jewel on the ground. I mean, God, it's been 40 years. I mean, my cousin is dead. My two brothers are dead. But I guess I'm like the last one standing."
He called himself "a 68-year-old has-been who's got one foot on a banana peel and one in the grave" and is fighting prostate cancer and cardiac arrhythmia instead of barroom brawlers. Two character witnesses — a former Olive Branch police officer and a Hernando minister — described him as a guy "who makes us laugh," "an asset to the community," and a churchgoer whose hobby is pitching horseshoes.
That pitch didn't sway Chamberlin or District Attorney Susan Brewer. They balanced Tiller's age and physical condition with his criminal history, including convictions in 2000 and 2002 for selling controlled drugs. They also noted that he said "I ought to kill you" to the informant and then showed him a copy of a book he was carrying. The title was Dead Man Walking.
"I just said it out of madness and frustration," Tiller told the judge.
"I think 10 years is being more than fair and more than lenient," Chamberlin finally said. "I sympathize with Mr. Tiller's health condition, but certainly, the Mississippi Department of Corrections has the ability to take care of that."
Brewer told me last week that even first offenders get prison time for distributing drugs in DeSoto County. Tiller's sentence was "sort of a lifetime achievement award."
He was sent to Parchman, the legendary Delta prison two hours from Memphis. If he lives to be 70, he will be in an exclusive club. Only 82 inmates — less than half of 1 percent of the 24,000 state prisoners in Mississippi — are 70 or over.
"Can you believe it's been a year since we had lunch?" he wrote me in a recent letter. "Time fly's out there, stops in here."
He can cut his time 15 percent if he behaves. That leaves just over 3,000 days.
There is a sad joke about an old prisoner who protests in court that he won't live long enough to complete his harsh sentence.
"That's all right," says the judge. "Just do what you can."
Consolidating Memphis and Shelby County is the government equivalent of changing your phone service, Internet service, credit cards, bank, checking account, brokerage firm, home mortgage, termite contract, doctor, car insurance, utilities, club memberships, billing address, will, and marital status.
And it gets really hard if you have children.
Now that Mayor Willie Herenton has been reelected to another four-year term, consolidation is back in the news.
"We need to consolidate," Herenton told a Memphis Regional Chamber of Commerce audience last week. "We've been singing that song, and we're going to open that hymnbook again."
In 1993, two years after he was first elected, Herenton floated the idea of consolidation by surrender of the city charter. The New York Times even did a story about it. The mayor appointed a committee to look into it. The committee included some familiar names. The chairman was Mike Cody, a Memphis attorney, former candidate for mayor, and former Tennessee state attorney general. Members included Herman Morris, who ran against Herenton in the 2007 mayoral election, John Ryder, who managed the Morris campaign, Charles Carpenter, who managed Herenton's campaign, state senator Steve Cohen, who is now a member of Congress, Shelby County attorney Brian Kuhn, and others.
Their conclusion, in short: no way.
"You can say I'm in favor of it," Cody said in a telephone call from Boston this week. "We tried to find some ways."
There were 14 pages of analysis, to be exact.
The Tennessee General Assembly would have to pass an enabling law. If the law was amended to apply to the Memphis city charter, 10 percent of the residents of the city could petition for a referendum. The committee noted, however, that the state constitution apparently only envisions dissolving cities with a city manager and commission form of government.
"No dissolution method is provided by the General Assembly for cities organized as is Memphis," the committee concluded.
As for legal and practical problems that might arise from charter surrender, the committee suggested a few: Suburban cities such as Bartlett, Collierville, and Germantown might use annexation to cherry-pick prime neighborhoods and pick up residents and/or retail. Or residents of a defined area in the suddenly unincorporated Memphis could hire a smart lawyer, incorporate, and invent a new city.
"Any contracts of the city of Memphis would survive a surrender of the charter and could be enforced," the report said. Joint boards and commissions "would require some degree of restructuring." Consolidation "would be further complicated for those authorities with holdings in their own names." The city board of education would be abolished unless provisions were made to create a special taxing district. Both MATA and MLGW "would cease to exist."
The committee fell back on the old, safe standby of "functional consolidation" of certain departments, which has been dusted off several times since then.
In 2002, Cohen requested an opinion on charter surrender from the state attorney general. The answer was no way once again.
"The General Assembly may not revoke the charter, the Memphis City Council is not authorized to surrender the city charter, and no statute authorizes the Memphis city charter to be revoked by a referendum election of the voters," the opinion said.
Case closed? Not quite. Lawmakers can do almost anything if they put their minds to it, witness those lottery tickets on sale at your neighborhood convenience store. But the lottery had popular support, and other states had shown the way.
The city most often mentioned as a model for consolidation is Louisville, which has some similarities to Memphis: river city, big college-basketball town, long-serving mayor, air-cargo hub. The big difference is that Louisville was 65 percent white before consolidation and more than 80 percent white after consolidation, which took effect in 2003 after voter approval in 2000.
You don't need 750 words to figure out that one.