Urban revitalization really needs three things: available buildings or property, loyal developers or investors, and the right incentives to make the deal as profitable as a suburban project.  Sounds simple enough and, after all, this is the way everyone has been doing it.  However, this represents a tactic that does not fundamentally change very much very fast because individual projects don’t get to the root of the problem or offer a sustainable solution.

So instead of searching far and wide for more of the same benchmarks we all discuss over and over again, I thought it would be fun to take three exciting but basic ideas, mush them together and see if a new strategy emerges.

I’d like to introduce B.E.G.-2015!

B.E.G.-2015 is a plan to:

a)      Attract smart people or BRAINS to Memphis.

b)      Inspire commitment or ENERGY from existing Memphians to finish something big.

c)       Exploit profit motivations or GREED to keep the process rolling along.

Phase One – BRAINS

In order to spur business growth, backfill empty office space, diversify our economy, build a culture of innovation, create a cool youthful atmosphere and set an example of why education is important, all we have to do is pay really smart people to move here.  I AM NOT JOKING.

The Contest

Thanks to Tommy Pacello for the idea of creating a contest like the X-Prize where $10 million was offered to the first organization launching a reusable ship into space twice within two weeks.  He thought we needed a cool contest for innovations in urban planning.  I think we need a business plan contest on steroids.

B.E.G.-2015 will offer ten $500,000 prizes to winners of our business plan contest each year for five years.  We will run ads in science and business publications soliciting entries.  This will give Memphis much needed positive exposure.  We will run ads in the most influential print medium left… college newspapers.   This will make Memphis look exciting to future grads, even if not entering the contest.  And we will send out recruiters to explain the contest at Ole Miss, Arkansas State, Vanderbilt and other schools close enough to be family but far enough away to be ignored until now.

The best start-up business plans will be judged by experts, local academicians and business leaders.  The process can be run by Emerge Memphis, the FedEx Institute of Technology at the University of Memphis, and BioWorks, since they are already in this business.

Johnny, tell them what they’ve won!

Each winning business plan or contestant team wins the following:

  • $50,000 cash up front and $10,000 at the end of each of the next five years
  • 5-year lease on 1,500 square feet of office space valued at $135,000
  • Legal services valued at $80,000
  • Marketing services valued $80,000
  • 5-year lease on a 2-bedroom apartment valued at $75,000
  • Accounting services for five years valued at $30,000
  • Semi-annual funding pitch to 15 qualified potential investors

Total retail value of this package… over $500,000!

Wow, how do we do that?

Today the Downtown office market has over 450,000 square feet of space available and the Airport Area has almost 650,000.  This is the equivalent of two empty Clark Towers.  I suspect five downtowners and five property owners near the airport would donate space for this endeavor in exchange for exposure, animation in their buildings and the chance to hook the next big thing for longer than five years.  Half the businesses would be clustered in one area and half in the other.  All together: 10 businesses a year X 5 years = 75,000 square feet total or less than 7% of available inventory.  I think if divided amongst the different properties, they’d do it.

I also believe that in the spirit of community, in the spirit of winning awards, and in the spirit of establishing future business, a handful of Law Firms, Marketing Firms and Accounting firms would be willing to let some young partners work with these businesses to become established in Memphis.

Last time I looked, for-rent signs were popping up on everything.  I bet we could find some apartment managers who would love telling prospective tenants that the President and CEO of SuperFantasticNewCompany lives right down the hall.

Finally, we have no shortage of successful people in this community that would entertain investing in the next wave of success… especially if they are prequalified, inspired with seed money, have professional assistance and don’t have to sweat rent for five years.

This leaves the cash prize of $100,000.  Or more accurately: $100,000 x 10 winners x 5 years = $5,000,000.

How do we find $1,000,000 a year to fund this?  First, let me say that this community doles out far, far more than $1,000,000 to less fruitful ventures.  Next, we freely give incentives to big businesses moving from one side of town to the other and now we are talking about giving incentives to big businesses to just not do anything.  Also, for perspective, we spend $600,000 a year maintaining an empty Pyramid, are putting over $1 million into a golf course sprinkler system, and are spending $30 million for Beale Street Landing.  Finally, I think we have some interested parties with existing funding that could get creative about making this happen.

Small businesses are the largest employers in America.  Locally grown businesses employ far more people than the one big company that could be wooed to Memphis from another city.  This contest should be appealing to The State of Tennessee, Shelby County and City of Memphis economic development departments.  I believe, with no doubt in my mind, each could come up with $250,000 a year for five years.  The remaining $250,000 could perhaps be split between non-profit entities like the Chamber of Commerce’s Aerotropolis initiative and the Center City Commission.

Come to Memphis & Win the M-Prize for Brains

Think of the creative minds bumping into each other on the street and exchanging ideas.  Think of the line for job applications.  Think of the books written about the next great Memphis business breakthrough.

This sounds silly at first but the contest could be fun, would drive a tremendous amount of publicity and, in the end, produce a few new businesses we could all be proud of.

In the next post, we’ll discuss the biggest untapped resource in town… Energy.