The 9:01: How big of a threat is gentrification in Memphis?

Good morning from Memphis, where IKEA is voluntarily reducing its amount of tax incentives after failing to create as many jobs as promised. But first...

When some residents of New Chicago marched against the adoption of the proposed citywide Memphis 3.0 growth plan, they summed up their concerns as "gentrification."

But how big of a threat is gentrification to Memphis, really?

By "gentrification" I mean low-income people being priced out of their neighborhoods by an influx of more affluent residents. I asked some of the candidates about gentrification as I talked to them for an analysis piece out today on the mayor's race. Here's what incumbent mayor Jim Strickland, Shelby County commissioner Tami Sawyer, and businessman Lemichael Wilson had to say about the issue:

Strickland: "We have no gentrification going on. It would be years and years before we'd (see that)." But, Strickland added, gentrification "is on our radar screen."

Gentrification isn't a danger for cities like Memphis that have too little growth, Strickland said; rather, it's a danger for cities that have lots of growth, very quickly — like Nashville.

Even in Memphis' high-growth areas, like Downtown, there are affordable housing developments like South City, where the residents displaced by the redevelopment of the old Foote Homes project will have first dibs on apartment units as they're completed.

Sawyer: "When you open the door and don't plan for it, 10 years later you have gentrification."

Even if people aren't being displaced in droves now, Sawyer said the city is already seeing the warning signs of early onset gentrification. While Strickland would disagree, she argues that citizens' voices aren't being heard by city officials. One example: The controversial Paint Memphis-commissioned zombie mural in Midtown Memphis. Sawyer said the mural was put up despite some residents' objections (just to point out, I went and knocked on doors and talked to passersby and didn't find anyone who objected).

Sawyer also took aim at the citywide Memphis 3.0 growth plan, which is currently slated for a City Council vote May 7. Some people have objected to the plan, saying it promotes gentrification, and Sawyer said those people's voices deserve to be heard.

"When I looked at Memphis 3.0, I was pretty underwhelmed," she said.

One way to head off gentrification, she said, is to look at creating neighborhood councils to give residents more control over what the city plans to do for their neighborhoods.

Wilson: Although he didn't specifically address gentrification by name, Wilson took aim at his opponents for not coming up with innovative ideas for addressing the issue. "At the end of the day, the people of Memphis — and I'm saying the average citizen — is being handled," Wilson said.

Wilson said he wants a "serious conversation" about poverty, jobs, homelessness and repurposing old schools. "If we're not having those conversations, everything else seems nebulous."

If you read one story from The CA today...

Make it this one, tracing the city's history over the last 200 years, from our John Beifuss. One of the 200 historical notes that stood out to me:

15. "May God bless Memphis, the noblest city on the face of the earth.” — Mark Twain, in an 1858 letter to his sister, after visiting the Memphis hospital where his brother Henry was taken after a steamboat explosion that took "hundreds of lives."

Takeaways from the Memphis budget

Memphis Mayor Jim Strickland presented his 2019-20 proposed budget to the City Council on Tuesday, officially marking the start of budget season at City Hall.

Our Jamie Munks was at the presentation and has more details in her story, but after reviewing the budget, here are three of my takeaways:

1. There's no tax increase. The city's property tax rate would remain at $3.19 per $100 of a property's assessed value if the council adopts Strickland's recommendation. The city lowered its tax rate last year from $3.27, and in 2017 from $3.40.

2. Everyone gets a raise. As previously reported, Strickland is proposing that Memphis police officers and firefighters receive 3% pay increases and other employees receive a 1% raise. Keep in mind that the council could increase, decrease or erase the raises.

The administration predicts it will spend $332.2 million on full-time salaries in the upcoming fiscal year — which, if the city actually spends that, is a substantial jump from the $274.9 million forecast for the current fiscal year. 

3. The pension fund is now solvent. When the recession hit, Memphis' pension fund — like many around the country — took a major hit. Then state lawmakers mandated that Tennessee cities had to pay enough into the funds annually to keep them solvent.

For cities like Memphis, that had skimped on pension payments for years, that was a major financial hurdle, spurring the city to scale back its retiree benefits.

Well, for the first time since the state's mandate, Memphis is set to fully fund its annual required pension contribution, which this year is $54 million. From Jamie's story:

“For the first time since 2006, that pension is fully funded," Strickland said. "Until now there was questions on whether that fund was solvent. Now, there’s no questions about it, it’s fully solvent, we’re moving ahead, I’m very proud of that discipline.”

IKEA voluntarily reduces tax incentives

IKEA, the Swedish furniture company with a store in Cordova, has voluntarily agreed to forego $1.8 million in tax abatements after failing to live up to its job creation promises.

Our Desiree Stennett reports:

IKEA promised to create 175 full-time jobs and pay an average of $41,011 per year. In January, the company reported it had 147 workers earning less than $37,000 per year on average. But according to an April 4 letter from IKEA's attorneys, the company expects jobs and wages to fall even more and it wants its payment-in-lieu-of-taxes incentive to be recalculated based on the lower numbers.

"IKEA requests that EDGE rescore the PILOT using 125 jobs with an average annual wage of $34,000," IKEA attorney Chad Wilgenbusch wrote in the letter.

It's refreshing to see corporate responsibility. That said, the Economic Development Growth Engine (EDGE) could only reduce the term of IKEA's payment-in-lieu-of-taxes incentive (PILOT) by a year due to the company's environmental sustainability efforts.

What to know and read in the 901

• Mark your calendar: St. Jude Children's Research Hospital chief executive James R. Downing will speak at The Commercial Appeal's Healthcare Newsmaker breakfast May 23, our Desiree Stennett reports.
• Researchers from St. Jude Children’s Research Hospital have cured babies with “bubble boy” disease through gene therapy, our Max Garland reports.
• Tennessee could pump $10 million into Tom Lee Park in Downtown Memphis in Gov. Bill Lee's proposed budget, our Katherine Burgess reports.
• Comedian Aziz Ansari is coming to Memphis, and we have all the details.
• The Memphis Grizzlies' Mike Conley wants a ring — but may have to leave Memphis to get it, our David Cobb writes. Meanwhile, our Mark Giannotto makes the case for the Grizzlies keeping Conley in Memphis. Also, be sure to read this column from Mark about the killing of standout West Memphis basketball prospect Taylon Vail.
• Columnist Tonyaa Weathersbee makes the case here for continuing with a national search for the next Shelby County Schools superintendent.

The Fadeout

To fade us out this morning, Crosstown Arts just uploaded this video of IMAKEMADBEATS and flute-player Delara Hashemi performing at its Continuum Festival:

Columnist Ryan Poe writes The 9:01, a weekday morning blend of Memphis news and commentary. Reach him at poe@commercialappeal.com and on Twitter @ryanpoe.

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