Suburban Developer Sues City

uburban developer Waymon "Jackie" Welch Jr. has sued the city of Memphis for stalling one of his projects on Germantown Parkway because of the incorporation controversy.

The Circuit Court lawsuit was filed September 23rd by Welch as chief manager of Cordova Centre LLC, the name of the development company for the project at Germantown Parkway and Old Dexter Road. Welch has sold seven parcels to AutoZone, Krystal, a hotel, a mini-storage business, a convenience store, an unspecified business, and a Hollywood video store.

When Welch submitted the final documents for the Hollywood video store, the Office of Planning and Development refused to record them with the Register's Office, thus preventing Welch from closing the deal.

"Plaintiff was told that the city had placed a moratorium on approval of any future sewer connections in the proposed incorporation areas of the Memphis designated annexation reserve area," the lawsuit says.

Welch says he has spent $4 million to purchase and develop the 36-acre site. The sales of the first six parcels closed without any problems, and Welch says the seventh is part of the same planned development and merely connects to the existing sewer.

City Attorney Ken McCown declined comment. A hearing set for October 8th could test the resolve and strength of both sides on the broader issues of annexation and incorporation.

The reprisal aimed at Welch is significant because he is a major force in commercial real estate sales, zoning, and development in east Shelby County. Welch and Shelby County Mayor Jim Rout, along with the Shelby County Schools administration, were the masterminds of the new Cordova High School, which opened this year to serve both city and county students.

Welch assembled and sold the land for the school and a nearby elementary school. He has developed residential and commercial property around them in an area known as Berryhill.

The new school was a key factor in the city's decision last year to extend the Gray's Creek sewer east of Cordova. A city-county agreement called the Balanced Growth Plan extends the sewer and commits the county to support annexation by Memphis of unincorporated areas within its reserve area. Incorporation of neighborhoods in those areas would leave the city little to annex.

Dismounting from a tractor at his new house to talk to a reporter Monday, Welch says he would drop the suit and not seek any damages if the city would sign and record the final plot for the video store. Then he turned his attention to what he sees as the underlying problem -- the incorporation and annexation controversy.

Welch says either he or Rout could persuade the incorporation petitioners to back off if the city would agree not to annex them. He proposes a scenario in which property owners of the unincorporated areas would instead pay half the city tax rate, in addition to their county taxes, for sewer services.

"The only issue the city has brought up is the monetary damages that incorporation might cause the city," Welch says. "Let's say the rate would be something like $1.50. The city would get that and the benefit of inflation if property values held up or increased. Wouldn't a negotiated deal be better than nothing?"

Welch, a close friend of Rout since elementary school, concedes that Mayor Willie Herenton is not likely to appoint him emissary to the would-be incorporators.

But he insists, with only a trace of a smile, that "if the city would hire me and fire Leo Bearman, I could resolve this thing." Bearman is a private attorney representing the city. The city's uncompromising position, Welch argues, is only galvanizing the incorporation forces.

Whether in an official or unofficial capacity, Welch is a player to be reckoned with. Welch Realty signs are commonplace on the fringe of suburban areas, and Welch is close to both Rout and former county lobbyist Charles Perkins. Since 1988, he has sold six school sites to the county. No one else has sold more than one.

The city, meanwhile, has mustered strong support for its position. A meeting last week at Boyle Investment headquarters included representatives of Boyle, Belz Enterprises, Wilkinson Snowden, and other development companies.

"I don't think there was anyone there who was not fairly aghast at the toy-town movement," says Russell Bloodworth, executive vice-president of Boyle Investment. "There was significant support for the city of Memphis."

Bloodworth says Boyle would "try very hard to get out of" any newly incorporated towns and become part of Memphis instead.