Redevelopment Agency Could Obtain over $100 Million Dollars if They Declare Downtown Memphis a “Blighted, Slum Area”

The Community Redevelopment Agency (CRA) is currently considering a “redevelopment” plan that would label downtown Memphis a “blighted, slum area that constitutes a growing menace to Shelby County.” At over 200 pages,* the plan outlines a project to revitalize the proposed Heritage Trail Community Redevelopment Area. Covering 1,484 acres, 200 property parcels, including quite a few vacant lots, are on the acquisition list for the area. But as John K. Ross at Reason notes, “all of the 4,000-plus private properties in the redevelopment area will be subject to condemnation.”

If need be, eminent domain will be authorized.

The possibility of eminent domain has some residents and local stakeholders very worried. Downtown developer and property owner Lawrence Migliara told the Memphis Daily News:

“Quite frankly, I would probably just put everything on hold. I don’t know if you were around in the ’50s where Housing Authority came in and used the power of eminent domain to wipe out about half of what was Downtown. A lot of that land is still vacant. It was a very traumatic experience for a lot of people. I was here and I was involved in that at the time. Housing Authority just ran right over people.”

In addition, Kent Reardon of the Vance Avenue Collaborative was concerned about a perceived conflict of interest involved with drafting the project’s plan:

“In general, you don’t have planners end up being the developers end up being the profit (winners) directly across the major investment sites, and that’s what we have in this situation.”

To obtain the necessary funds, the agency is planning to use tax increment financing (TIF). Simply put, TIF uses future tax revenue to pay for current improvements and redevelopment projects. In theory, since these projects are projected to create better conditions (and thus, higher property values), they act as the source for the future gains in tax revenue. However, in practice, all too often TIF has been plagued with favoritism and cronyism. For the Memphis Heritage Trails project, TIF is expected to redirect $102.7 million over the next 20 years to the CRA.

Even if the CRA approves this project, it would still need to be approved by the Memphis City Council and the Shelby County Commission, before being implemented. There’s also been some good news: according to the Memphis Flyer, a vote by the CRA on the Heritage Trails project might not happen until February. Hopefully, that will give local activists and property owners more time to share their concerns with government officials.

Unsurprisingly, Tennessee has abysmal eminent domain laws, including a very broad definition of blight. Back in April, a bill was even passed that declared “Remodeling and eliminating blight serves a valid public purpose,” thereby providing a legal fig leaf for agencies and municipalities to abuse eminent domain more often. Clearly, the Volunteer State has flunked protecting property rights and received a D- from the Castle Coalition.

 

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*On the plan’s p.67, there’s this dash of Orwellian doublespeak: the redevelopment area will provide a “maximum opportunity for private enterprise.” Because nothing says “private enterprise” like redirecting tax revenue to pay for seizing property with eminent domain.

 


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