Thursday, January 28, 2010

Memphis Freakonomics

A rogue theory of optional schools, skate parks, and politics.

Posted By on Thu, Jan 28, 2010 at 4:00 AM

This is a book plug, a rip-off, and a suggestion.

The book is Super Freakonomics, the follow-up to the best-selling Freakonomics by Steven Levitt and Stephen Dubner. The rip-off is some of what follows. And the suggestion is that Memphis might profit from Oprah-style group readings of these works.

Among other things, the authors help explain optional schools and skate parks.

If a picture is worth a thousand words, a great title is worth a thousand words and a thousand dollars, or in the case of Freakonomics, many thousands of dollars. If you have read this far, you probably have a general idea of what these books are about. If not, it's an unconventional way of looking at human behavior and incentives and questioning numbers. The full title of the follow-up is Super Freakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance.

(On that last part, the short answer is that it throws off the terrorist profilers. The witty and talented authors are not shy about dispensing a thimble full of common sense in a gallon jug.)

Freakonomics has become a franchise. The authors and various contributors also do a freakonomics blog on The New York Times website. Dubner is a former New York Times Magazine writer and editor, and Levitt is an economics professor at the University of Chicago. Funny is hard. They are both funny and well-informed. And they don't flinch at risqué topics like prostitution and specific acts of prostitution. One of their sources is a Chicago prostitute who earns $400 an hour. How she got into the business and set her price is a story not to be missed.

So much for the plug.

Now the rip-off and the suggestion. If there was ever a city that lends itself to freakonomics, it is Memphis. Hard attitudes. Seemingly unsolvable problems. Racial divides. A genuine desire to do better. A gritty culture. Mistakes often repeated. A city of entrepreneurs. Home of the super-duper freakonomics idea, FedEx.

A few years ago, there was a reading fad. Communities chose a book like To Kill a Mockingbird, and lots of people read it at more or less the same time in the name of betterment, bonding, and literacy. The idea was not new, but Oprah's Book Club helped nudge it along. Group readings of the freakonomics books might nudge Memphis out of its ruts and get people thinking differently.

Take optional schools. Every winter for at least 25 years, hundreds of bundled-up parents have lined up at the Memphis Board of Education to get into the optional schools of their choice.

This behavior is easy to misinterpret. The line is not an endorsement of Memphis City Schools in general. More like the opposite. It is an endorsement of certain schools by certain people. In my day as a young parent, a phone call would announce that "the line" was forming and you better get your ass over there. Once your place in the line was secured, you had to hold it by reporting for roll call every morning until the actual sign-up day. Then your kid got into Grahamwood or White Station or John P. Freeman, and you and your younger children were set for years, thanks to a legacy rule.

Some years the line was unnecessary. There were more spots than candidates. But the mere rumor of a shortage was enough to start the line. Take no chances when your kid's school is at stake and you don't want to pay $10,000 a year for private school.

Of course, if you missed the line you were screwed, if demand exceeded supply. Merely calling more schools optional did not work. The game was rigged in favor of two-parent families who didn't work the night shift and knew the rules, which were not exactly written on stone tablets. In response to complaints, 20 percent of the spots are now awarded by a lottery. But 20 percent is less than 80 percent. "The line" lives. It still pays to pay attention.

Skate parks are another example of more going on than meets the eye. The concept barely existed in Memphis 10 years ago. A small number of proponents worked the media and the Park Commission to generate awareness, support, and funds. Last week, a skate-park story made news when city councilwoman Wanda Halbert objected to its proposed location.

At this point, you might say "huh?" Why the interest? Why the opposition? And what the hell is a skate park? In a word, it's freakonomics.

Thursday, January 21, 2010

Wiggle Room

If an appellate court doesn't know how many children are enrolled in MCS, who does?

Posted By on Thu, Jan 21, 2010 at 4:00 AM

The Tennessee Court of Appeals ruled against the city of Memphis in the Memphis City Schools funding case last week, but in its ruling, it overstated enrollment by more than 7,000 students.

The error raises doubts about the accuracy of MCS enrollment reports and could give the Memphis City Council some wiggle room in negotiations with the school board.

The appeals court wrote that MCS serves approximately 112,000 students, but the system has not been that large for several years. According to the MCS website, the system has "about 105,000" students. The Tennessee Report Card says the actual number is 104,829 students.

The per-pupil funding (from all sources) for MCS is $10,394. (For comparison, Davidson County/Nashville is $10,495 and Shelby County is $8,198.) Multiply that by 7,171 — the difference between the report card enrollment and the number the appeals court uses — and the result is approximately $75 million.

If the state Court of Appeals, which had months to review this case, doesn't know how many students there are in MCS, you have to wonder whether anyone does.

That should get members of the City Council doing some homework and demanding some answers before raising anyone's taxes and forking over more than $100 million to MCS for last year and this year. If MCS has been overstating its enrollment, then the system may not be due any extra funds.

MCS enrollment has long been a guessing game, with the difficulty compounded by population movement and the fact that there have been three superintendents in the last three years. Kriner Cash is in his second year. Dan Ward had the job in 2007-2008, and Carol Johnson was superintendent from 2003 to 2007.

For reporters, it takes a Freedom of Information Act request to the communications office under Cash to get this basic piece of information. You can find numbers as high as 118,000 and as low as 103,000 in various press reports, report cards, and MCS publications in recent years.

One thing is clear: The trend is down. In 2007, according to the Tennessee Report Card, MCS had 110,753 students.

But fewer students doesn't mean fewer teachers and administrators or school closings. The opposite is true. In 2007, MCS had 6,438 teachers and 359 administrators. In 2009 — with enrollment down 4 percent — MCS had 7,259 teachers and 439 administrators. And instead of closing underused schools, MCS built two new ones — Manassas High School and Douglass High School — which were well under capacity last fall.

The total proposed MCS budget for 2008-2009 was $931,966,343. The state funds 48 percent of that and Shelby County 29 percent.

The city has funded as much as 10 percent in recent years but reduced its contribution in 2008, sparking the lawsuit. Instead of appropriating the $84 million it gave MCS in 2007-2008, the Memphis City Council cut the appropriation to $27 million. MCS wants $57 million in make-up money for 2008-2009 and even more for this year and next year. A special property tax increase could be the only way to get it.

But wait a minute.

The appeals court and the Chancery Court in Memphis ruled that Memphis has a statutory school-funding obligation called "maintenance of effort." But there is an exception, which the appeals court noted near the end of its ruling:

"Revenue derived from local sources must equal or exceed prior year actual revenues — excluding capital outlay and debt service and adjusted for decline in average daily membership."

In other words, revenue can decline if enrollment declines.

The Memphis City Council should bring Superintendent Cash and his lieutenants to City Hall and ask them this:

What is the current enrollment, and how do you know this?

What was the enrollment for the last five years?

Why did MCS build Manassas High School and Douglass High, at a cost of more than $45 million?

What are your plans for closing schools in parts of the city where there are not enough students to fill them?

How much enrollment gain in MCS is due to annexation? Shelby County has been operating schools in annexation areas for years, then turning them over to MCS. Next up in the batting order is Southwind High School, with nearly 1,500 students.

Before we can decide how much funding Memphis schools are entitled to, and how the costs should be borne by city and county taxpayers, we have to have accurate enrollment numbers and an explanation for discrepancies.

Thursday, January 14, 2010

Overton Square's Future

Anchor tenants Malco and Paulette's give their views.

Posted By on Thu, Jan 14, 2010 at 4:00 AM

On Saturday, I went to the Memphis Zoo and stared down the wolves in the Teton Trek exhibit that opened last year. Nice.

On Saturday night, I went to see George Clooney at Malco's Studio on the Square. Nice.

On Sunday, I went to the open house for the new 390-seat Playhouse on the Square, with a backstage rigging area that goes up seven stories and can fly Peter Pan over the audience. Nice.

Later that afternoon, I went to the Central Library, which opened in 2001, then over to Rhodes College, where tuition, room, and board costs $42,000 a year. Very nice.

And on Monday, I read that the owners of Overton Square can't come up with a deal for developing an empty parking lot in the heart of Midtown and have taken their proposed grocery store, demolition, and new buildings off the table.

So much going on in Midtown, so much investment, so much prosperity and potential, so many opinions, and so little going on at Overton Square. What is wrong with this picture? I asked the anchor tenants with money in the game: Jimmy Tashie of Malco's Studio on the Square and George Falls, owner of Paulette's.

Malco built its four-screen boutique theater in Overton Square 10 years ago after taking a pass — wisely, as it turned out — on Peabody Place downtown.

"We've been in the square since 2000," Tashie said. "There was a lot of talk at that time of bringing in all kinds of new stuff. Of course nothing has happened, other than moving Le Chardonnay and Bayou Bar and Grill over to impact our parking.

"When they moved everybody north of Madison, we knew something was going to happen. It's a shame to have that big parking lot with nothing going on. Finding the best use is subject to a lot of interpretation. What Malco wants is something pedestrian-friendly across Madison. We want something open where people feel it is all connected. A view corridor is an important component so people can look between the buildings and see activity on the north side of Madison.

"I have great respect for all the people saying that Midtown must retain its integrity. Whether they can use all the old buildings, I don't know. A lot of them are going to be difficult to deal with. That's a business decision for an investment group to make.

"Cooper-Young has got a little of the spark that Overton Square used to have but no longer has. You don't want a shopping center storefront look there.

"Our theater is doing fine. We've been very happy with it. If they're making the right kind of movies, then our business is healthy. We like having our film festivals and special showings there. The new Playhouse is a great thing. With that, you have live theater, good restaurants, and a movie theater. It just seems like maybe something good is about to happen."

Paulette's restaurant has been at Overton Square for 35 years.

"I want something over there," Falls said. "It is terrible not having something across the street. Ever since TGI Friday's went out, it just hasn't been the same. I would rather have something that may not be my first choice than nothing at all. The dream come true would be mixed retail and housing, but that's not going to happen.

"The landlord with Fisher Capital in Denver is a great guy, but he's not a developer. He seems to like the idea of the grocery store, and I'm certainly not opposed to it. They spent a lot of money fixing up the old buildings, but it didn't seem to help. I was disappointed when I heard about them withdrawing their proposal. I would love to see the development go through that these guys have planned.

"The movie theater hasn't been what I think some of the former landlords thought it would be. We were told we would have a 10 percent increase. I said I would take 1 percent. The thing is, a movie usually starts at dinnertime. We are doing okay, not what it was in the boom days, but we're doing all right."

Tom Lowe is president of Univest, co-owner of Overton Square.

"I think the economic window of opportunity is limited," he said. "We want to know where the community stands. We don't want to force anything. We're very impressed with Councilman Shea Flinn, and we'll see what he can pull together. We need cooperation, support, and realism from the community."

Thursday, January 7, 2010

Changing the Guard

Jeff Sanford looks back on a decade at the Center City Commission.

Posted By on Thu, Jan 7, 2010 at 4:00 AM

When Jeff Sanford took over as head of the Center City Commission in 1998, the Pyramid's empty space was being touted as the future home of a Grammy Museum; AutoZone Park and FedExForum and most of Peabody Place had not been built; office buildings were giving way to housing; and the shortcomings of a pedestrian mall were painfully obvious.

In other words, while some things about downtown have changed, some have stayed the same.

Sanford, 67, announced last month that he plans to leave his job in July to go into consulting. So when we sat down this week for an exit interview, it was really only half exit interview and half what's-your-last-act interview.

Exuberantly praised last year by Councilman Joe Brown for his "guts" and, uh, manliness, Sanford is an amiable, low-key guy with a reined-in ego, a small office across the plaza from City Hall, a staff of 15 administrators, and a $3.5 million operating budget. A member of the City Council himself from 1977 to 1983, Sanford reminded me that he still has six months to go and then honed in on nitty-gritty details of downtown infrastructure before we got to the big stuff.

The CCC to-do list for 2010 includes sprucing up streets and alleys, cracking down on panhandlers and sales of single beers and "pesky street behavior," and handing over management of street parking to a private company. A master of finding empty spaces and milking parking meters for a couple of hours on 50 cents, I looked nervously out the window at the mention of this one.

"We have not been very successful in finding the money to implement the 2001 Streetscape Master Plan for 80 square blocks of downtown," he said. "We have spent about $5 million of the $75 million that is needed."

The Center City Commission is a relatively modern invention, dating back some 35 years. What gave it clout was the blessing of key developers and its ability to grant tax freezes as an incentive to develop new properties like Barbaro Flats or fix up old buildings like Lincoln American Tower. Depending on your point of view, the glass is half-full or half-empty. Some $5 billion has been invested downtown in the last 15 years, but the four corners of the intersection of Union and the Main Street mall remain vacant.

"Changing a neighborhood or a city takes decades, not days," he said. "I've had to learn the true meaning of the expression that patience is a virtue."

Here's what he had to say about some hot-button topics.

On Bass Pro: "Given the choices, it is still the best option. It's that or an empty building."

On cars on the mall: "Someone came here and said it could be done for a few thousand dollars, but when you start looking at the details, it isn't easy. It would take $10 million to return cars to the mall. It's like forcing a square peg in a round hole."

On Mud Island park, which went from a $20 million project to a $60 million project while he was a councilman: "One problem has always been coming up with a reason to return. I'm hopeful that plans will include new reasons to make return visits."

On the Sterick Building and other "big empties": "As developers say, it simply doesn't pencil. Not as a hotel, residential, or office. Boarding up broken windows with plywood is not putting the best face on downtown. We need a higher standard."

On whether there is a need for both the CCC and Riverfront Development Corporation: "Next question. I've been asked that before, but I'm not in position to make a judgment."

On consolidation of city and county government: "I have been a proponent since before my council days."

On AutoZone Park: "Look for new ownership of the physical property as well as the team. Something other than it falling back on the taxpayers."

On whether Midtown, Whitehaven, or other areas should have development corporations: "New York has close to 60 CCCs. I see no reason why it couldn't potentially work in other locations."

On future consulting: "I plan to take what I learned here over 12 years and offer my advice to city builders in other cities and maybe even help analyze market opportunities here."

We were out of time. My parking meter had clicked over to red. No ticket. Another revenue opp lost. Take that, CCC.

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