Councilman Berlin Boyd is in business with William "Billy" and Benjamin Orgel, the minority-stake owners of the Gibson building.

Boyd also works for FedEx Logistics, the entity he persuaded to move its headquarters to Downtown Memphis.

His pitch for a move in which his business partners stand to gain raises questions about transparency.

“There’s nothing that I’ve done that’s been wrong or illegal,” Boyd said. “I’m not going to jail for nobody."

More than a year before an assortment of the most powerful people in Memphis gathered for a celebratory announcement in the Gibson Guitar factory in February, City Councilman Berlin Boyd pitched an idea.

At a Memphis Grizzlies game, Boyd said he made a proposal to his friend Richard Smith, president and CEO of FedEx Logistics.

Boyd encouraged Smith to move the FedEx subsidiary’s headquarters from East Memphis to Downtown, a plan he called his “brainchild” in a Feb. 12 interview with a Commercial Appeal reporter.

Boyd took it a step further, proposing the Gibson building as a potential location. Smith wasn't sure the site was a fit, at first.

"We were sitting there and he said, 'Man, you guys ought to do something in Downtown Memphis. Have you looked at the Gibson Guitar building?' " Smith recalled in an interview with The CA.

From there, Boyd said, Smith “saw the vision, he bit, we started working on it in late 2017."

That vision became a reality when FedEx Logistics' planned move to Gibson was announced in February.

"It’s been a long process but a fun one. And this property worked,” Boyd said.

Smith, who is also the Greater Memphis Chamber's chairman, publicly touted Boyd’s role at the announcement of the move, where he led off his remarks with: “Welcome to my office.”

After rolling through a litany of thank-yous, Smith extended “special thanks to council member Berlin Boyd, who first approached me with the idea.”

Gov. Bill Lee kicked off a series of public officials’ remarks, his first major jobs announcement since taking office in January. The relocation will shift about 320 existing FedEx Logistics employees downtown and create an estimated 340 new jobs, with an average annual wage of more than $80,000, according to a letter Lee’s administration submitted in support of the project application for tax breaks.

That the pieces of the deal came together could be seen as above reproach. Memphis needs jobs. The north end of Downtown falls in Boyd’s district. The guitar factory would soon be empty. The renovation of the building would not otherwise be profitable, Smith told The CA, thereby justifying the incentives granted to the project.

But a web of financial interests lies beneath the surface of the deal. And at its center is Berlin Boyd, the man who made the pitch.

Boyd, 41, is in business with William "Billy" and Benjamin Orgel, the minority-stake owners of the Gibson building, who are also consistent donors to Boyd's campaigns.

Boyd is also a FedEx Logistics employee, The CA learned and Boyd and Smith confirmed.

Memphis City Council members often have full-time jobs outside of their public office duties. And the tax breaks granted the project, in a case where the building owners were granted more-generous-than-typical terms, are not subject to City Council approval.

But that Boyd pitched a move in which his business partners, the Orgel Family LP, stand to gain raises questions as to whether development deal-making should be subject to more transparency. And that Boyd's annual statement of financial interests, filed with the Tennessee Ethics Commission in January, does not disclose his FedEx Logistics employment signals an omission from the filing.

Boyd also has voted twice, in a single 2017 City Council session, on issues in which he has ties, without disclosing them.

Asked multiple questions regarding his FedEx Logisticsstart date, Boyd refused to answer. Smith initially did not address The CA’s questions regarding it. But, upon final follow-up, he provided Boyd's start date, Aug. 15, 2018. Smith also said, per company policy, that Boyd's work entails "nothing related to the Gibson." Boyd works for the properties division, assigned to an e-commerce unit, Smith said.

In reviewing the information currently available, The CA found no evidence of illegal activity — a point stressed multiple times by Boyd amid his refusals to answer The CA’s questions, which he described as “asinine” and “highly offensive.”

“At the end of the day, I have a right to be employed by a private company,” Boyd said in a March 7 interview with a CA reporter.

“There’s nothing that I’ve done that’s been wrong or illegal,” Boyd said. “I’m not going to jail for nobody,” he added.

“I’ve known Richard Smith for a long time. I’ve known the Orgels for a long time. Way before I was an elected official,” Boyd said. "What's wrong with that?"

Smith, recalling a conversation with his father, FedEx founder and CEOFred Smith, said Boyd is the first local elected official to make a case for a Downtown FedEx presence in the company’s four-decade-plus history in Memphis.

"In my view, he was doing his job as an elected official in trying to bring jobs and economic investment to Memphis.

"This was just sometimes how the deals come together," Smith added. "Somebody makes a suggestion. You know another guy. You start talking, things move forward, the idea gains momentum and moves forward."

'Memphis has traditionally had a kind of good-old-boy network'

Rhodes College political science professor Marcus Pohlmann said the deal reflects a longstanding trend. “Memphis has traditionally had a kind of good-old-boy network. Insider deals have not been unprecedented,” said Pohlmann, who has authored four books on municipal politics.

But, as the city evolves and metropolitan areas nationwide grapple with the pros and cons of incentives, he said, “Taxpayers and voters would like to see more transparent government.”

Pohlmann advocates for a participatory development deal-making process that diversifies decision-making boards with people from communities. It would involve more complex negotiations, Pohlmann said, but that’s worth staving off the risk inherent in a more opaque process.

Speaking in general on public-private partnerships, Pohlmann said, “What you don’t want happening is this development going into (someone’s) cousin’s property, to be actually monetarily benefiting the decision-makers or people contributing to their campaigns.”

Jennifer Oswalt, president of the Downtown Memphis Commission, said developers' interest drives deals for a reason. "No incentive alone is going to bring development. There has to be market demand, market interest, as well as the incentives," she said.

But for an increasing number of Memphis activists, the market-driven status quo is no longer tenable. “What you have is tantamount to corporate welfare, in a city that has one of the highest poverty rates in the country,” said the Rev. Earle Fisher, pastor of the Abyssinian Missionary Baptist Church and Henry Starks Logan fellow with the Memphis Theological Seminary. Fisher is leading efforts, as founder of #UptheVote901, to organize a “Peoples Agenda" in the run-up to the October municipal elections.

“People in the community,” said Fisher, “want to see people investing in the people in those communities." He added, “Yet it seems as though we have a political infrastructure that is much more content with giving money to major corporations in some of the more highly industrialized and corporate areas.”

Within two days of the deal being announced, local development boards granted FedEx Logistics and the owners of the building — New York real estate investment firm Somera Road Inc. and Billy and Benjamin Orgel's development group, Orgel Family LP — about $32 million combined in tax breaks and grants, according to figures provided by the Downtown Memphis Commission and the Economic Development Growth Engine for Memphis and Shelby County.

A few weeks later, the Tennessee State Funding Board extended an additional $10 million grant to FedEx Logistics, whose parent company reported $4.6 billion in net income in 2018.

Smith said without subsidies, "no company in their right mind that wants to make money, which all companies do, would go out and spend the kind of money that we're going to spend to retrofit an old, vacant guitar factory." Speaking further on incentives, he added, "Nobody likes them, trust me. It's just if you’re not in the game, you're not in the game," said Smith, who says that without the grants, FedEx Logisticswould otherwise consider a move to another city.

‘I had this as a location’: The Gibson building

By the time Boyd said he pitched the Gibson site to FedEx Logistics, he had been in business with the Orgel Family LP for months on another development, a Shelby County property record shows. In April 2018, the Orgel Family LP purchased a minority stake in the building Boyd encouraged FedEx Logistics to occupy. Smith said other properties also were proposed.

The Gibson building is in a portion of Downtown that's outside Boyd's district, within Council District 6, according to a city district map.

“I knew the property had transitioned over to Somera Road,” Boyd said of the New York firm that purchased the Gibson property in December 2017. “I didn’t know what the potential or the prospects were, what the owner had in mind to do with the building, but I had this as a location. The reason I had this as a location was simply because it had given us proximity of everything — hotels, entertainment, which is the Forum, Beale Street.”

While the talks were unfolding, Boyd was also the Memphis City Council chairman , a role that includes running council meetings and overseeing council committee appointments and council staff. He remained in the council leadership role through 2018.

In a news release that announced that real estate investment firm Somera Road and the Orgel Family LP also would be developing the site adjacent to the Gibson building together as a separate, mixed-use office and hotel project, The Clipper, Somera Road thanked Boyd as a councilman and “constant cheerleader for Downtown” for his role in the Gibson deal. The news release also states that Somera Road approached the Orgel Family LP to partner on the Gibson building.

Smith said the company's new Downtown campus might need to grow in order to house up to 1,200 total workers. Talking about The Clipper, he said, "That would be the most logical place for us to go, yes."

A Somera Road representative did not provide further comment on the firm's decision to partner with the Orgel Family LP.

Boyd previously 'forgot' to recuse himself

In the March 7 interview, after The CA asked Boyd questions regarding his business relationships and campaign donations, the councilman asserted he was being unfairly targeted, naming other City Council members involved in real estate and construction who he says have not been questioned after recusing themselves from development-related votes because they are white.

"Nobody’s ever written anything about a white council person, and then you wanna target somebody that’s African-American, about me doing business?" Boyd said.

Boyd was referencing the process — recusal — by which City Council members decline to participate in votes in which they have vested interests or otherwise lack impartiality.

He's previously drawn heat for "forgetting" to recuse himself in one vote — during the same City Council meeting in which The CA found a second vote, favorable to the father-and-son duo behind the Orgel Family LP, in which Boyd did not disclose any business ties, City Council minutes show.

In a Sept. 5, 2017, City Council meeting, Boyd voted to authorize approximately $85,000 in city funds to the Beale Street Merchants Association, while he was under contract with the group, to help promote its events.

In the same City Council session, Boyd voted in favor of granting a special permit to Tower Assets Newco IX LLC. The corporation is affiliated with Billy Orgel’s Memphis-based cellphone tower business, Tower Ventures, for which his son Benjamin Orgel also works, according to his LinkedIn profile.

Under the Memphis code of ethics for city officials , elected officials with voting power “shall disclose during the meeting at which the vote takes place, before the vote and so it appears in the minutes, any personal interest that affects or that would lead a reasonable person to infer that it affects the officer's vote on the measure. In addition, the officer may recuse himself from voting on the measure.”

The city ethics code directs public officials who exercise discretion in nonvoting matters to file an interest form with the recorder if a personal interest in the matter “would lead a reasonable person to infer that it affects the exercise of the discretion.” Officers and employees also may recuse themselves from exercising discretion in the matter.

Developers and power brokers in business

Since at least Feb. 28, 2017, Boyd has been in business with the Orgel Family LP as 1544 Madison Partners. A Shelby County property deed includes the Orgel Family LP, Boyd and Benjamin Orgel as partners, along with two other Tower Ventures managers.

A few months later, on Oct. 18, 2017, the Economic Development Growth Engine for Memphis and Shelby County granted 1544 Madison Partners an approximately $6 million 15-year tax break to develop a 200-plus unit apartment complex in Midtown.

Boyd defended his Gibson pitch as independent of his connection to the Orgels, saying, "1544 has absolutely nothing to do with the Gibson. Absolutely nothing."

In addition to his involvement in development projects, Billy Orgel is an elected member of the Shelby County School Board and serves on the boards of multiple Memphis institutions.

Benjamin Orgel is listed on the Downtown Memphis Commission website as a member of two boards, and on Feb. 5, the Memphis City Council voted to appoint Orgel to a DMC-affiliated board that oversees public parking downtown. Boyd seconded a motion to bring a vote on a slate of appointments, including Orgel's, to the floor, and he was among the 11 council members who voted in favor, according to the meeting minutes.

A review of the last five years of Shelby County campaign finance records shows Boyd has received steady donations from Billy Orgel, his spouse and Benjamin Orgel since Boyd ran for county commission in 2014.

Altogether, partners at Tower Ventures and/or 1544 Madison Partners, and some of their spouses, have donated at least $43,950 in combined campaign contributions to Boyd, according to his campaign financial disclosure statements.

The CA reached out to Billy and Benjamin Orgel to ask what inspired them to contribute to Boyd’s campaigns and to go into business together in the 1544 Madison Partners development. They also were asked about their purchase in the Gibson building and Boyd’s role in the deal.

“We are grateful that Somera Road wanted a local partner and reached out to us at The Gibson,” Benjamin Orgel texted The CA. “We appreciate Somera’s hard work and FedEx Logistics in bringing FedEx logistics headquarters to downtown Memphis. What an exciting time for our city!”

He did not reply to a follow-up request seeking further comment.

Two days after FedEx Logistics' plan to move to the Gibson building was announced, Benjamin Orgel recused himself from a Downtown Memphis Commission vote on FedEx Logistics’ request for a $1 million grant to support its renovation of the guitar factory.

A separate Downtown Memphis Commission body voted the same day to also grant Somera Road and the Orgel Family LP a 22-year tax break, of an estimated $29 million value. Unlike similar payment-in-lieu-of-taxes subsidy deals, the Gibson PILOT gives the owners of the building an extended period for paying a fraction of the taxes owed.

The project qualified for a 16.5-year PILOT, based on a scoring system. Gibson owners were granted 22 years before their obligation to pay the full taxes owed on the building kicks in. During the lifespan of a PILOT, developments are typically reassessed after improvements. In this case, the building’s pre-renovation value will determine the fraction of taxes owed.

Community development

Meanwhile, a mounting chorus of activists are questioning what they see as business as usual in the development of the city.

Earle Fisher, the pastor and founder of the group #UptheVote901, is working to convene a citywide People’s Convention on April 27, when about 2,500 people are projected to gather with the hopes of supporting new political leadership and developing an agenda to address social inequities in Memphis.

“When you don’t have adequate representation and when the community’s resources are being leveraged against people who always have less than they need and being given to people who always have more than they’ll ever need, that’s inequity,” Fisher said.

Boyd says he’s given more than adequate representation to his district, which includes not only a portion of the burgeoning downtown but also economically depressed North Memphis.

“Everything that District 7’s ever did and wanted, I delivered for it,” Boyd said in the March 7 interview. “New community centers, new libraries. A million dollars' worth of cameras throughout the whole entire city. Amnesty programs ,” he said, referencing City Council funding dedicated to a City Court Clerk program that reinstates the driver’s licenses of people paying expungement and diversion fees.

Boyd says it’s his job to respond to developer interests, however they may relate to district lines. “That’s a part of a city councilman’s job, to sell Memphis, whether or not I can sell a company to relocate into Frayser in North Memphis. That’s not up to me,” Boyd said, adding that he is petitioning the state to designate the former Firestone industrial park in North Memphis a brownfield, for remediation to occur for future development.

Jennifer Oswalt, the Downtown Memphis Commission chief, said a strong downtown is crucial to the health of the entire region and noted the commission encourages development in neighborhoods outside of downtown. “We do incentivize development in our core because we still need help there,” she said, citing rental rates that do not provide attractive enough returns on investment for developers.

For Oswalt, new developments in Harbor Town, Binghampton and Crosstown serve as powerful examples of the trickle-down effect, from downtown into up-and-coming neighborhoods.

But for communities long awaiting investment, that trickle-down has never arrived, said Charlie Caswell, associate pastor of the House Memphis Church and the executive director of the Legacy of Legends community development corporation.

Caswell was involved in crafting the “Frayser 2020 Plan,” which he says began seeking funding from the city in 2014, to fight blight and crime and build community centers in North Memphis.

While Caswell said he’s glad the city granted $1 million toward the long-sought new library, mentioned by Boyd, in Frayser in 2017, he says he’d like to see more progress on the yet-to-be-developed project.

“The concern that I’ve had is that when it comes to the library or community center, there’s been talk for years," Caswell said. “But when it comes to downtown development, it seems that everything moves quickly to make those builds happen, when Frayser’s been waiting on these types of investment for 20-plus years.”

More:Memphis 3.0? Still waiting for Frayser 1.0

In November, Caswell said community members held a news conference at the Ed Rice community center after a Shelby County Election Commission administrator raised concerns about respiratory health hazards in the building during a television interview regarding the commission’s decision to cease using it as a polling place.

According to a city of Memphis statement, the building was then tested for mold and the Memphis City Council approved $960,000 for a new center.

DeAndre Brown, one of Boyd’s constituents in District 7 and founder of LifeLine to Success, a Frayser-based re-entry program for ex-offenders, said he’s had positive experiences working with Boyd as a representative.

Boyd has worked with Brown to ensure funding through the city for LifeLine to Success, Brown said. The group also received a $750 payment for poll workers from Boyd’s campaign fund, a 2014 disclosure filed by Boyd shows.

Brown judges elected officials on whether they keep their word, and Boyd has come through, he said.

“For me, as a council person, he’s done everything I’ve asked that could be done,” Brown said. “And he’s never told me a lie.”

Berlin Boyd: city councilman

Boyd first gained a seat at the Memphis City Council dais in 2011 when he was appointed to succeed Barbara Swearengen-Ware. Boyd didn’t run for election later that year to keep the seat, and Shelby County Mayor Lee Harris won the District 7 City Council race.

When Harris stepped down in 2015 to serve in the state Senate, Boyd was again appointed to the council to represent District 7, which includes Frayser and a northern swath of Downtown. Boyd then ran for re-election in late 2015, defeating opponent Anthony Anderson in a runoff.

Boyd was unanimously chosen by his council colleagues to serve as council chairman in 2017, a role he held onto for 2018. His leadership position on the council ended after a stormy period during which the council deadlocked for roughly six weeks over appointing new members. During one meeting in which the council cast more than 100 votes, then-chairman Boyd passed on voting in most rounds. Boyd’s seat is up for re-election later this year.

“As you know, campaign season does not begin until May of this year,” Boyd wrote in a March 7 email to The CA. “At that time, if I decide to run, my position on the issues related to the district in which I run will be readily available.”

Berlin Boyd: FedEx Logistics employee

Regarding FedEx Logistics, Boyd said The CA should write about his ability to sell the move Downtown, not ask questions about his start date as an employee with the company, which matters in regards to whether Boyd accurately reported his annual statement of disclosure of interests to the Tennessee Ethics Commission.

Filed in January, Boyd’s filing does not detail his employment with FedEx Logistics. Boyd & Associates LLC is listed as the councilman’s only source of outside income, and 1544 Madison Partners is listed as his only investment. Tennessee Secretary of State records show Boyd & Associates LLC dissolved in early February.

After multiple requests for an interview with Boyd met no response after more than a week, a CA reporter made an unscheduled call to a cellphone associated with his FedEx Logistics employment.

Boyd confirmed that he worked for FedEx, but when asked, multiple times, to specify his start date, Boyd put a reporter on hold and requested a call back. During a second call a week later, he evaded questions on his start date — until he asserted it was "simple."

“Obviously if you put two and two together, I didn’t start with the company until after I filed my disclosure. How simple is that?” Boyd said.

When The CA asked Boyd to confirm he meant he started working for FedEx Logistics after his January disclosure filing, Boyd was silent and then the line went dead.

A few minutes later, Boyd texted he was at the gym, with bad reception, and had no comment for this story.

Sarah Macaraeg is an award-winning investigative reporter for The Commercial Appeal. She can be reached at sarah.macaraeg@commercialappeal.com or 901-426-4357. She is on Twitter @seramak .

Jamie Munks covers Memphis city government and politics for The Commercial Appeal. She can be reached at jamie.munks@commercialappeal.com or 901-529-2536. Follow her on Twitter @journo_jamie_.

How we reported this story

Investigative reporter Sarah Macaraeg and city government and politics reporter Jamie Munks set out a month ago to explain Memphis City Councilman Berlin Boyd’s role in FedEx Logistics’ decision to move Downtown to the Gibson Guitar factory. Reporting on this story included reviewing dozens of public records and conducting multiple source interviews along with additional research. The CA’s executive editor, Mark Russell, edited the story.

In-depth reporting that holds the powerful to account takes time and resources. If you value our work, support us by subscribing to The Commercial Appeal.