August 18, 2014
Property Developer With Other People’s Money
A recent CA article stated the following “After a delay of several months, Robert Lipscomb said recently that his team is ready to move forward with a long-standing plan to redevelop the Mid-South Fairgrounds into a sports complex and retail center.”
What a remarkable statement. Most professional property developers risk their own money or gather together other investors based on their good track record. However Mr. Lipscomb uses government programs such as TDZs (Tourist Development Zones), TIFs (Tax Incremental Financing) and various State and Federal programs paid for by the general taxpayers. Bonds are issued with the promise of payment from a fund of incremental taxes over and above a predevelopment base tax rate. If the incremental taxes are there to pay off the bonds then everything works out fine. If they are not there, then the local taxpayers pick up the load.
My question is who appointed Robert Lipscomb as chief Memphis property developer? If the City of Memphis is his property development company, then we need to study the financial records of his company. The State of Tennessee through the office of the Comptroller of the Treasury has told Memphis Inc. that they need to get their books in order or face a takeover. Yet Memphis Inc. goes from one development project to the next. (The Pyramid, Fed Ex Forum, Riverfront Development, AutoZone Park and of course BassPro.) Now he wants to add the Fairgrounds.
What is needed is a professional look at the effects that all of these development zone attachments has had on the tax flow into Memphis. Looking at the CAFRs (Comprehensive Annual Financial Reports) for Memphis we fail to see any increase in taxes over the last few years. The schools are scrambling for money and City is desperate for ways to pay for salaries, pensions and health care. I say stop the city led development projects and let the private development professionals do their job. The City should stick to street paving, policing, fire fighting and picking up the garbage and yard waste.