Behind the scenes, debate rages over tax incentives for Poplar makeover

Behind closed doors, Memphis and Shelby County politicians and developers are debating whether to spend millions of dollars in property taxes to spruce up Poplar Avenue's richest segment.

The idea, though still in its infancy, is to create a tax-increment financing (TIF) district along Poplar between Interstate 240 and Kirby, south of Shady Grove and north of Poplar Pike, said Shelby County Commissioner Heidi Shafer, a longtime advocate of a TIF.

The district could include St. Francis Hospital and the headquarters of International Paper and Boyle Investment Co. — an area near the home of FedEx founder Fred Smith, among other power brokers in the local business community.

New property taxes in the district every year would be reinvested into public infrastructure in the area — like a tourism development zone, but with property instead of sales taxes, Shafer said. In this case, the captured taxes would fund blight remediation, buried utility lines and pedestrian-friendly street improvements.

"You get in your car to go across the street," she said. "It's silly."

Weathersbee: East Memphis' Poplar Ave. may become pedestrian-friendly

Related: Shafer takes on new role as chairwoman of Shelby County Commission

The concept has already drawn opposition from Mayor Jim Strickland's administration, which has lobbied council members against the idea, council members said.

“We evaluate every TIF based on the merits of new development that will produce the tax increment," Chief Operations Officer Doug McGowen said in a prepared statement Wednesday. "The administration has not lobbied council members, but before we issue an opinion, we want to make sure the implications of an area-wide TIF are understood.”

Several council members are also wary of approving a TIF when other, poorer neighborhoods across the city are languishing, council chairman Berlin Boyd said.

But Shafer said the city has invested in other areas for years, even though Poplar corridor is the city's main thoroughfare.

"The city is pretty strapped for cash," she said. "They're not investing in Poplar."

Shafer envisions a multi-year, multi-phase renovation of Poplar all the way to Downtown. The Tennessee Department of Transportation has already agreed to put in a new three-lane bridge over Interstate 240 and westward to Yates, she said. The only missing piece of the project is the TIF, which needs City Council and County Commission approval.

"It's like turning around the Titanic," she said of the scope of the project.

Shafer wants the TIF to go to the Economic Development Growth Engine board for approval this year, although EDGE officials said they don't expect it until 2018. A delay of a few months could be the difference of millions of dollars for the TIF. TIFs capture taxes above a baseline of property taxes collected in the past year — so, a TIF created this year could capture the tax increases from a recent Shelby County reassessment.

The TIF could face a significant hurdle in the City Council and Strickland administration, despite the support from heavy hitters and big political donors in the business community, including executives at development firms like Belz Enterprises and Boyle.

City Council member Frank Colvett, who's driving the discussion on the council, said the city should take care of low-income areas — but also needs to take care of its revenue drivers. Poplar won't be attractive if it's not kept up, said Colvett, whose district includes part of the Poplar corridor east of I-240.

"You've got to serve those who are delivering for you," he said.

In The Commercial Appeal's 125 North Main podcast Thursday, Shafer said the mayor's office and the council should focus on the bigger picture, drawing inspiration from the TIF-fueled growth of Nashville and Atlanta.

Strickland's administration has met with multiple council members to argue against using broader TIF districts as opposed to site-specific TIFs, according to multiple council members. Colvett said those negotiations are ongoing.

Colvett added: "Compromise isn't a bad word."

Les Binkley, president of the newly formed Poplar Avenue Business Association and an executive at Boyle, said it was "premature" to talk about the TIF and declined to comment.

Reach Ryan Poe at poe@commercialappeal.com and on Twitter at @ryanpoe.