Friday, June 13, 2003

Memphis 2005

Chamber of Commerce retools its flagship project as government support wanes.

Posted By on Fri, Jun 13, 2003 at 4:00 AM

The partnership between city and county government and the Memphis Regional Chamber of Commerce is not exactly over, but it is a shadow of what it was when the ambitious Memphis 2005 plan was launched in 1996.

The partnership is a casualty of tight budgets, political opposition, mixed results, and the Shelby County government credit-card scandal that brought down former mayoral aide Tom Jones. Jones pleaded guilty two weeks ago to federal and state charges of misusing public funds funneled through Memphis 2005 and is scheduled to be sentenced in August.

When the city and county approved their annual budgets last week and this week, the chamber and Memphis 2005 were conspicuously absent. The city will chip in $350,000 next year, while the county contribution is zero. Each government contributed $750,000 a year in the first years of Memphis 2005, and the chamber raised an additional $1.2 million from the private sector.

Marc Jordan, president and CEO of the Memphis Regional Chamber, said Memphis 2005 was cumbersome and dependent on political support which began to lapse after the first few years.

"It did a world of good, but it was pretty complicated," he said, estimating that the chamber had at least eight partners and, in all, 250 people involved in Memphis 2005 activities. "It was administration-driven. You would have to say it was mayorally driven."

The scope of Memphis 2005 went beyond the chamber's traditional role of business recruiting to include crime reduction, anti-poverty programs, public school improvement, "livable" communities, and minority-business growth all in the name of economic development.

Consultants and politically correct committees thrived in the climate of Memphis 2005, but some elected officials thought public funds were being wasted or that accountability was difficult to measure.

As the City Council put the finishing touches on its budget last week, Councilman John Vergos noted that there are politics involved in funding swimming pools or golf courses in members' districts, "but at least the public gets a swimming pool."

Memphis 2005 will continue with limited public funding and a new focus on regionalism, job growth and personal income growth, a railroad "super terminal," and a third bridge across the Mississippi River. Its sexiest component is the "talent strategy" aimed at recruiting people instead of companies. Nashville has overtaken Memphis as the state's largest metropolitan area, and the chamber's analysis indicates that most of its growth is due to in-migration rather than births.

Bottom line: New people with job skills have more money than new babies.

"We're not getting people saying Memphis is a neat place to live and a great place to get a job, although obviously we think it is," said Jordan.

Jordan was candid in assessing the problems of Memphis 2005, including his own health problems (he had heart surgery), too many goals, and unstable leadership. Willa Bailey was first hired to run the program, then after two years she gave way to Carol Crawley. Crawley, a longtime member and officer of the Center City Commission and a consultant to the Public Building Authority on FedEx Forum, held the job for less than two years and was not replaced after she left.

Local government support had already waned when the news broke last fall that Jones had spent thousands of dollars of Memphis 2005 funds on personal and family expenses while misleading Jordan and the chamber. From 1998 to 2001, Jones was the point person for $466,355 in Memphis 2005 payments (excluding credit-card payments) ranging from $1,221 for 50 copies of the book The Livable City to $7,650 of travel expenses for Jones and former Mayor Jim Rout to $60,000 to establish the Memphis & Shelby County Music Commission.

"Our relationship with the county is different now," said Jordan. "The contact is the mayor. There is not an individual that has stepped in like Tom did. It spreads the mayor a little thin. I think over time the chief administrative officer [John Fowlkes] will do more."

The chamber's setbacks are apt to be temporary. It can still pluck talent from city government and Memphis Light Gas & Water former Planning and Development Director Dexter Muller and MLGW energy buyer Bill Bullock, for example as well as consultants like Carol Coletta, who is leading the talent star search.

And organizations fall in and out of favor with politicians all the time. Just this week, grant requests from MIFA and WKNO came under fire from county commissioners who wanted to make a point about tax increases. A few years ago, the Center City Commission was on the hot seat due to revelations of misspending by executive director Ed Armentrout.

Armentrout was replaced, first on an interim basis and then permanently, by former city councilman Jeff Sanford. Today, the CCC's stock has never been higher. It's a major player in the rebuilding of downtown via the tax favors and fees that fund its operations. Politicos like city councilman Rickey Peete and state legislators Larry Miller, Steve Cohen, and John Ford clamor to get appointed to it. The genial Sanford showed up at both city and county budget hearings to make his case but barely had to say a word, leading county CFO Jim Huntzicker to marvel in mock amazement, "How'd you do that?"

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