Editor's Note: With its pro-business policies, support for entrepreneurs, low business costs, and talented workforce, Memphis has seen an economic rebound. The following article was commissioned by the Tennessee Department of Economic and Community Development, which approved and paid for this posting.
Memphis — the largest population center in Tennessee — and surrounding Shelby County is on the rebound. Downtown Memphis has seen a recent wave of new construction projects, including extensive renovations to some of the city’s most iconic and historic buildings. Alongside these investments, more and more employers are beginning to locate in downtown Memphis. And this trend has helped propel the economy of the entire city and region.
As the home to FedEx, Memphis has long been major distribution and logistics hub. But in addition to global commerce, Memphis is now becoming a thriving center for technology and healthcare companies. St. Jude Children’s Research Hospital is in the midst of a $7 billion expansion, and a new University of Memphis research park has already supported a number of startups and expanding tech ventures.
Since 2015, Memphis and neighboring counties have won more than 85 economic development projects representing more than $4 billion in capital investment and 12,300 new jobs. And in 2019 alone, approximately 20 businesses invested $883 million and announced nearly 2,800 jobs in Memphis.
All of this activity has opened up brand new potential for Memphis and its economy.
In January 2019, Memphis was ranked 47th in Inc. magazine’s “50 Best American Cities for Starting a Business” survey, receiving high marks for entrepreneurial support, healthcare, and logistics. The ranking reflects the city’s pro-business policies and incentives, entrepreneurial support and startup resources, low business costs, and talented workforce.
Its AA credit rating — one of the best for metros in Tennessee — reflects the city’s fiscal responsibility and smart incentives that drive growth in responsible ways. For example, the PILOT (Payment-In-Lieu-of Tax) or Tax-Freeze Program, encourages commercial real estate development in certain districts by “freezing” property taxes at the pre-development level for pre-determined periods of time. Much of the city’s growth has been fostered by EDGE, the economic development agency for Memphis and Shelby County, which recruits businesses to the area and directs many of the economic development projects.
A Thriving Downtown
Downtown Memphis is experiencing a commercial real estate investment boom — as of December 2018, about $4 billion in construction projects were under way. Downtown continues to attract major employers — new companies such as Indigo Ag or expansions of existing companies such as FedEx Logistics. Other companies that have located downtown are First Horizon, B. Riley Wealth Management, and SouthernSun Asset Management. AutoZone is spending $145 million to expand its downtown operations — with more than 6,000 stores, the Memphis-based company’s expansion makes room for new technology and customer-support operations.
This economic plan is a tremendous asset for Memphis. “It shows that we have entered a new era of unity and collaboration, working together to drive economic success in Memphis.
Beverly Robertson, president and CEO, Greater Memphis Chamber
Although there are plenty of cranes on the skyline in Memphis, the city also has a reputation for creative, innovative adaptive reuse of old buildings. For example, Crosstown Concourse, a once-abandoned Sears catalog facility, has been reimagined as a million-square-foot vertical village. FedEx Logistics is currently renovating an old guitar factory to serve as its headquarters. ServiceMaster, one of the city’s largest companies, repurposed an old mall into state-of-the-art office space in the core of downtown Memphis.
“Several projects in progress include new Class-A office space that will connect various nodes of our city’s downtown,” says Gwyn Fisher, Greater Memphis’ regional director for the Tennessee Department of Economic and Community Development. “These critical infill projects increase density and add much-needed Class-A office space to our product inventory. They will also create vital connections between our city’s medical district and the downtown core.”
Emerging Technology Clusters
Memphis has a rapidly growing reputation for technology. New headquarters for DEVCON (cybersecurity software), Green Mountain Technology (shipping/technology), and Indigo Ag (agricultural technology) have been established here. The University of Memphis Research Foundation — a research park established on campus in 2018 — has played a significant role in attracting new technology companies. The 10,000-square-foot facility is in the university district and only steps away from the FedEx Institute of Technology, a research organization that supports key technologies such as cybersecurity testing, robotics, smart biomaterials, additive manufacturing, and bioengineering.
In addition to the research connections, another reason DEVCON chose Memphis for its headquarters was the city’s passion for entrepreneurship; it was named one of the top five cities for women entrepreneurs, according to magnifymoney.com. “Over the last few years there’s been some great discussion and focus around the need to create more opportunities for women entrepreneurs, which is a great start,” says DEVCON CEO Maggie Louie. “Our decision to move our headquarters to Memphis is in alignment with our company’s commitment to turn those conversations into actions.”
Prospero Health, a healthcare company that specializes in home-based care and support, plans to locate its operational headquarters in downtown Memphis, creating nearly 250 jobs. “Our affiliation with the University of Memphis Research Foundation Research Park provides us with the opportunity to tap into the university’s resources, as well as access to talented students who are entering the workforce,” says Michael Scarbrough, president and COO of Prospero Health.
Plans to Expand
In April 2019 a new leadership group called the Memphis and Shelby County Regional Economic Alliance was formed to help direct future economic growth. The group hired a consultant to study its economy and recommend industries to target for incentives and recruiting. The top six growth sectors are medical device, ag tech, music, logistics manufacturing, minority business services, and emerging technology. The Greater Memphis Chamber and EDGE will work with other city and county officials to expand these industries and recruit businesses to the region. Key to this success will be workforce training through the community college system to provide the skilled workers these companies will need in the future.
“This economic plan is a tremendous asset for Memphis,” says Beverly Robertson, president and CEO of the Greater Memphis Chamber. “It shows that we have entered a new era of unity and collaboration, working together to drive economic success in Memphis.”