Delta Regional Authority

  
The Daily News

 

May 5, 2009
 
 
Shelby County is not an economically distressed county according to the state of Tennessee’s standards. But it is by the federal government’s.

 

Officials at the Greater Memphis Chamber last week cleared up some of the confusion about the conflicting designations. It came after reports about which government had acted.

 

The federal Economic Development Administration (EDA) last month granted Shelby County provisional status as an economically distressed area. The designation allows the city of Memphis to again pursue new market tax credits.

The city was disqualified from using those tax credits, according to Dexter Mueller, senior vice president of economic development at the chamber, because the county’s unemployment rate was too low.

 

“They have criteria just like the state does. But their’s are different,” Mueller said. “If for the last 24 months your unemployment rate is 1 percent higher than the national average then you’re ineligible. … Well, out of that 24 months, we had two months that we didn’t meet that criteria.”

 

But the chamber and other economic development officials made a case for the city, if not the entire county, that factored in storm damage from the February 2008 tornadoes that hit the region.

 

“If you’ve been declared a federal disaster area, you’re eligible for that distressed designation,” Mueller said. “We showed them and we were designated. … Basically, because of that they were able to declare the entire county as a distressed area. And because of that, that should mean that the Delta Regional Authority does – which should mean that we are eligible again for those new market tax credits on those key projects.”

 

Approval of distressed status came from EDA’s Atlanta regional office. It is provisional. At the end of 18 months, the EDA will review the criteria again to see if the county remains eligible.

 

The tax credits had been a key financing option the Herenton administration has listed for most of its major economic development projects, including the redevelopment of The Pyramid as a Bass Pro Shops store with other attractions. The new market tax credits also had been listed as an option for the redevelopment of the Mid-South Fairgrounds. The tax credits were used for the development of the Westin Memphis Beale Street hotel across from FedExForum.

 

Still pending is reconsideration by state officials of granting the same status to Shelby County under different criteria. Economically distressed status from the state would mean a tax credit for businesses of up to $4,500 per job toward state business and excise taxes. Because Shelby County is still not considered economically distressed, the tax break is $2,000 per job.

 

“Our view is obviously we’ve got about 30 percent of those that are receiving federal assistance,” Mueller said of the effort. “We have a considerable amount of poverty, we’ve lost jobs. … But the state has a pretty strict formula that they go through. … We brought it to their attention. They are working through that.”