Incentives used to lure businesses come under fire - WMC Action News 5 - Memphis, Tennessee

Incentives used to lure businesses come under fire

The deal to bring Bass Pro Shops to the Pyramid has been in limbo for over five years. The deal to bring Bass Pro Shops to the Pyramid has been in limbo for over five years.

By Kontji Anthony - bio | email

MEMPHIS, TN (WMC-TV) - Million-dollar incentives used to lure businesses to Memphis and Shelby County are under fire, as local leaders ask if the incentives are going to far, or if they are the cost of doing business.

For weeks, murmurs have been heard in the corridors of the Shelby County administration building and Memphis City Hall about incentives being doled out to corporations to relocate to Memphis.

Monday, Shelby County Commissioner James Harvey voiced what everyone is talking about.

"For one, we have a two billion dollar debt sitting on the books," Harvey said.

Harvey recently voted in favor of incentives to Pinnacle Airlines, Electrolux and Mitsubishi, but he warned lawmakers must proceed with caution because Memphis and Shelby County taxpayers don't want to end up on the rough edge of a deal.

Days before Harvey's comments, Memphis Mayor AC Wharton spoke out strongly against naysayers.

"We've got to tell people like that to shut up," he said.

Wharton said doing business with the big boys means you have to make big moves.

"Find me any place in the world that has ever grown, that just sat back and said, 'That's a private business and we can't help them.'  They've got choices. They can move," Wharton said.

According to the most recent development agreements with Pinnacle, Electrolux, and Mitsubishi, big payouts now could reap bigger profits later.

Taxpayers are paying Mitsubishi $54 million in tax breaks and incentives, but the company will employ 281 people and anticipates its business will contribute $639 million to the Memphis and Shelby County economy, directly and indirectly.

Electrolux is getting $150 million dollars in tax breaks and incentives, but will contribute $740 million in the long run and employ about 3,500 people, directly and indirectly.

Pinnacle is getting $29 million in tax dollars in the form of incentives and tax breaks, but they expect to contribute $28 million dollars, and $3.7 million per year of money spent here will be by out-of-town employees.

"I can't move Memphis," Wharton said. "I can't pick up this city and say I'll go out to the Sun Belt somewhere where they will want us."

But Memphis leaders hope the roller coaster ride on Bass Pro's Pyramid Arena lease will not leave pie on their face. After approving a $63 million incentive to redevelop the Pyramid and Pinch District for the outdoor retailer, Bass Pro mentioned seismic concerns that leave the deal on shaky ground.

Pinnacle, Electrolux, and Mitsubishi are scheduled to either move in, break ground or open shop between this and next year, unlike the Bass Pro deal, which has been in limbo for over five years.

Copyright 2011 WMC-TV. All rights reserved.

Powered by Frankly