Behind the Headlines – December 22, 2017

Behind the Headlines – December 22, 2017


– (female announcer)
Production funding for Behind the Headlines is made possible in part by: the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you.
Thank you. – Mayor of Germantown,
Mike Palazzolo, tonight on Behind the Headlines. [dramatic orchestral music] I’m Eric Barnes; publisher
of The Memphis Daily News, thanks for joining us. I am joined tonight by mayor
of Germantown, Mike Palazzolo, thanks for being back. – Glad to be here,
happy holidays. – Absolutely, and Bill,
I should say, Bill Dries is on assignment. I will start, and
I’m sure many people are tuning in tonight, we
talked about it before the show, the huge news this
week, with the statues coming down. That’s a Memphis issue
and I won’t put you in a place to comment on it
so much, other than I was when we were getting
ready for this show, and we’ll talk about the
multi-family moratorium and some of the other
things that we wanted to talk about and have you on. You all passed a
resolution in Germantown in August, right after
Charlottesville, talk just a quick bit about that,
and then we’ll move on to the other issues. – Well, certainly, the
mayors compact against hate and extremism was
something signed by roughly 400 mayors around the country. It’s never a bad time to
stand up for what’s right, and so my community, we
brought forth the resolution and it passed our board of
Mayor and Alderman, and so we went on record to make
sure that people know that we’re like a lot of
other communities around this country, and we
don’t stand for those type of things.
Hopefully more people will think that way, not
only regionally, but around the country. – Yeah, and I will
make just a comment. I generally try to be as
objective as possible, the seven years I’ve done this
show, I thought it was kind of an amazing
moment; I mean yesterday in Charlottesville to
that compact they had to rename a street after
Heather Heyer, the woman who was killed by a white
supremacist, was the same day they brought those
statues down, and so, not exactly an objective
comment on my part, but I thought it was a great
day for Memphis, and we will certainly do shows on
that in the coming weeks. But let’s move to Germantown,
and we, I was caught I think it was a breaking
news alert, that I got on the Memphis Daily
News a couple weeks ago that you had proposed a
multi-family moratorium, so apartments and so
on, and construction in Germantown, and as
someone who’s lived in the Memphis area for almost
25 years now, that just seemed like that doesn’t
happen in Germantown in the suburbs. The suburbs are all about
growth, growth, growth, growth, and it was a
striking thing that you might want, that the government
in Germantown might want to slow down let
alone put up a temporary moratorium in place on
any sort of construction. So talk about why, what
that means, and we’ll talk about the bigger
picture of where Germantown’s going and so on. – Well certainly. Eric, our city has always
been, and our residents hear me say this all the
time; we’ve always been very process oriented,
very thoughtful, very thorough, and we have
not been reactionary. So I wanna make sure
that people don’t mis-interpret our moratorium
or our request for one to be a completely
reactionary stance against development. What we have found in
our community, being land locked, and fully
annexed, so we have a very limited amount of
open space left. So matter of fact, in
our five commercial districts, we have re-zoned
three of those five, to a mixed use priority. So in the Forest Hill
Heights area, that’s near Forest Hill and Winchester,
we re-zoned that area that was mainly
commercial to mixed use. Part of that is the
premise of, let’s introduce residency component to
the commercial area. We would not introduce
commercial component to our residential area. So we’re trying to create
that mixed use area. But what we found out, it’s
kinda like the Oklahoma land rush, for many, many
years ago, that when you re-zone an area, when
there’s pent up demand for Class A apartments in this
entire region, then the market brings you something
quicker than you may anticipate. We kinda did the old
let’s get a time out, let’s get a little bit of
a refresher on evaluating our process, and
understanding what absorption means for apartments
in our community. That’s kind of an
economic development term, you can only handle
growth so quickly. For instance in this
Forest Hill Heights area I mentioned, we predicted
that full absorption or build out would be in
about a 25 year period with about 2,200 housing
units in that area. Well, you can’t bring
multi-family to one area in year one, you know,
four, five developments. That’s not a good way to
absorb in a planned manner. – So let’s break,
dissect that a little bit. Is it the number and
volume, or is it the type of apartments that
were proposed? – Well, I don’t think it’s
the type by any means, we approved a development
that the company is out of Indianapolis
called Watermark, it’s a 310 unit multi-family,
it is Class A, it is not the patio apartments
of the past, it is much of the mixed use variety,
with a lot of public space, a lot of communal area;
I mean, it’s, you have to have an income of
around $70,000 to $100,000 to live in one of
these apartments. So it is very much high level. It’s just, how do you
absorb that as far as bringing services
to that area. Police, fire, sewer,
water pressure, streets, all those things. – Is there any, I mean,
some of this comes out of the smart code. The proposal you had when
we had you on the show a year ago, six months
ago, talking about these changes and taking certain
areas of Germantown, and you can correct me where
I get this wrong, saying we want this high density
verses the kind of suburban you know, approach
to Germantown, and I love the suburbs here and
elsewhere have always had. More density. Again, was it just an
unexpected consequence and in, did you expect more
housing to be proposed, or, I mean again, that
ratio of housing in homes, I should say, versus apartments. – Well maybe it’s good
to understand how our city is built as
far as residential. We’re about 86-88%
residential, so that is your traditional suburban
bedroom community. About 12-14% is some other
form of living space. Multi-family means condo’s,
town houses, single family attached, where
the houses are joined by some common wall. We have a couple
developments like that. Brown stones. Multi-family apartments. So all those things,
currently about 12-14% of our 15,500 households, so
about 2,000 plus are in that variety. So, we have some diversity
but it is mainly residential, the traditional format.
We wanna be able to offer everything to residents
of the, our current residents, and
residents of the future. And so, you know, when
you prepare for again, demand, cities have zoning,
and they have ordinances, but cities do not
control the demand or the market pressure, and
so when we were getting a lot of developers
coming at us at one time, again, there was an
important pause that needed to be taken. How do we handle this,
school capacity is one thing, again, police, fires, I
mentioned earlier all those things have to be
evaluated, our city has not, some of our communities
in this Mid-South area have embraced
impact fees, we have not discussed that in our community. – Impact fees being? – Well if a developer
comes in, and produces a product whether it’s
multi-family or 200 unit subdivision, or
maybe a new hospital, there is an impact on
services in the community. They have to be paid for. They’re generated by taxes
in different formats, whether it’s commercial,
residential, property tax because you know, those
are two different taxes. Residential’s taxed at
25% of appraised value, commercial at 40%, and then you have sales tax. Small communities, that’s
really our only two revenue streams, and so
you have to look, you have to do the
cost-benefit analysis kind of that economic impact of what is going to
do to your community. You’re getting tax dollars, but are you spending
more on services? – And you all, this past
summer, did a tax increase. A pretty sizeable one. – Sure. – You went up at 1.97,
just the Germantown rate on top of the
Shelby county rate, I mean does that worry you
and that gets into issues of schools and you are
all now a few years into having your
own school system. Which we’ll talk
more about, but, impact fees, taxes, I
mean part of the draw of the suburbs everywhere
and Germantown included, has always been lower
taxes than the city we’re around in this
case in Memphis. Are you worried about
that trajectory? – Well it’s always
one of those things that’s in the back of your
mind because you wanna plan again not for today you plan for the next 10 to 15 or 20 years, and so we’ve down a lot of
long term strategic planning. Again taxes, you always weigh
the cost benefit analysis. Cause people that see
value in their tax dollars they seldom complain
about how high they are. They want to make sure it
equates to the service level they’re getting. And so our residents, you know, I pay taxes, no one likes taxes, no one likes for taxes to go up, but again at the end of the day, what do you get for those? And in our community
I think people have found that
there’s been value every tax increase
we’ve had over 30 years it’s produced something
of great significance. This last one is gonna
produce a roughly $30 million new
K-5 elementary school. So yeah we always try to
weigh those things, Eric, because at the end of the day, when we lost the
Hall income tax from the state of Tennessee, – The Hall income tax,
it was a statewide tax on investments hit higher
income people generally and a lot of that money was
funneled into the cities being proportional
where those people live so you all as a relatively
high income suburb had lost quite a bit. Memphis lost quite a bit, and it was all part
of that tax reduction that the legislature. You’re exactly right. But at the end of the day, we
don’t have that money anymore. So where do we go to find it? We ether cut services or we
ask our residents for more or we diversify a certain bit. And part of the
plan in Germantown, and it’s not this mayor’s plan, it started back and 2004 with
our long term vision plan known as Germantown Vision 2020, and then we adopted a new
strategic plan in 2015 called Germantown for 2030, that should take
us to the year 2030 and hopefully another 10
or 15 years beyond that. But in both those
strategic plans, smart code, or mixed-use, was
embraced by our residents and our citizenry. And again as I mentioned
just a few moments ago, we’re trying to make
sure we maximize our land in our city and so
how do you introduce the residential component
to the commercial area. And that’s been
kind of a challenge. We’ve got a mixed use plan
that’s going on right now called thorn wood that’s
been so far very successful in the residential side
but not complete on the mixed use side yet. – Yeah. A whole bunch of
thing that we’ll come back to in that, but you
mentioned the school, let’s go back to that. You all, the tax increases
you said was in part, or maybe entirely to
build a K-5 school. That was in response to
not having control of, I mean this is a question
of what they call the three g’s, the schools … Germantown elementary, middle
school, and high school, that the Shelby county
school system held on to as part of consolidation,
de-consolidation. You are all building
your own K-5 school for your school system. Have you given up
on getting control of those three Germantown
based Shelby county schools? – Sure, well we got
a great relationship with the three principals
that are there, and we treat those schools
as if they’re a part of our community because they
are part of our community. They are embedded
in our community and before merger, de-merger,
those eight public schools they were figuratively
ours to begin with. We owned them emotionally. We did not own them financially. And so now we have
our own district and we have three. We will always have
conversations with our peers over at Shelby county schools if we see more
growth in the future do we put a wing at one of
our elementaries or middles do we put a wing
at this new school, do we go back and
if it’s a few years, we go back to the same
leaderships at SCS or perhaps it’s new
leadership there. And make an offer
to purchase again. Our growth has been driven, and I think I’ve shared
this with you before on this show, our single greatest
economic catalyst has been controlling our own
school district. We are seeing people
move into our community at such a rapid pace that
we’re having to build an elementary school, and again this is part
of this moratorium because we need to take
stock of our growth. And you know it’s great
for people to flock to your community and be
considered one of a community of choice around this region, but you also have
to prepare for it. – Yeah and we’ve
had other mayors on that have seen this
growth and the traction of the school and
are putting kids into portables and into,
they’re kind of bursting at the seams and
no one wants that. That’s not what someone
moved to their community for. Back to the conversations, what, you had conversations
with Shelby county school systems about
buying the schools. Did it just … you guys
couldn’t agree on price? Or was it more
complicated that that? Was it a control
issue on their end? Why did those conversations end? – Yeah and I can’t
answer questions on behalf of the other
party that we spoke to, but you know we made a offer, we thought it was
a very fair offer, very viable, very substantial
offer, $25 million. And there was dialogue
and discussion. I think at the end of the
day, Shelby county schools they were looking to
if we sell a building, we need to replace a building. And so I think they
were really having to jockey with those decisions and you know at the end
of the day it’s business. It’s not personal. Some people take it personally. But we will continue
to have conversations with them in the future and you know one of the
things I will say about SCS is that they have made a
commitment to the schools and our city, Germantown
elementary, middle, and high school. And we’re very
excited about that. We have, I have a
family in my city, that has a child at
Germantown High School that because they have an international
baccalaureate program. They have a child at
Houston High because there’s an honors academy there,
and they have a child who’s home-schooled. So they have really taken
this cornucopia of educational choices and they did
their own due diligence and they made a family decision and the family made three
different educational decisions to me, that’s a cool
community to live in. You got choice. – And the new school,
just to wrap that, is a K-5 school, how many
students give or take? – Well I think it’s gonna
be built for a capacity of close to 700. And it will hopefully it is
right now it’s going through its regulatory approvals even though it’s our school,
they still have to get the planning
commission approval, design review
commission approval. We hope to break ground
sometime in the late spring and it would be open
for the fall of 2019 I think I’ve heard dialogue
that our school board because they’re
gonna have to re-zone, and that’s always a
very delicate issue. – Oh where they would go, our younger children went here, but now they’re zoned for this. I got you. – And I think they’re gonna
be very, very sensitive to if a child is
started at Farmington and they started in K and
they’re now in third grade they’ll probably finish there, opposed to being
uprooted to go to the new shiny new school with all the greatest amenities. But our district the
cool thing about having your own district is
small and it’s nimble and those leaders can
make decisions that are impactful for their parents. – Talking about
development in Memphis, the Strickland administration
made some news, this past summer, when
they announced they were gonna stop
doing sewers and into un-incorporated Memphis. I don’t know this. How does Germantown do
its sewer system? – Well they caught a
lot of people off guard, and you know a lot of
conversations with mayor Jim and with his leaders. A lot of the people in
the commercial development community were
burning up my phone because they had
projects in Germantown – That tied into the Memphis
sewer system? – Well in a second
I’ll kind of explain, but there was a lot of anxiety. And so in Germantown
as you asked, we have what’s called
an Evergreen contract with the city of Memphis, and that we have,
we did years go, our city made a decision,
many many years ago, 30 to 40 years ago, not to
treat its own waste water. And so we are a client
of the city of Memphis in essence so we
are their customer, and we have a contract, it
adjusts every couple of years on a volumetric basis, and it is evergreen. We feel very comfortable
with that– – Because they have not
put that on the table that they would end
those contracts. What they would have said
if I read this correctly, they wanna end any
new connections, they don’t wanna
continue in part it’s a philosophy of
we don’t wanna continue to fuel growth
outside of the city, why would we do that? We’re focus, the city
of Memphis is focused on density and a lot of the same
issues you’re talking about on a bigger scale,
a bigger city, but you haven’t
had any indication that they are wanting to
end the contract with you. – No and we feel very
firm and very comfortable that they’ll honor that.
We don’t feel threatened. We have a contract
and we, you know, we have to prepare
our infrastructure to take that waste water
to the Memphis outfalls and that type thing, and
that’s our responsibility. But treating it is
theirs, and again, it is a customer relationship. So we are their customer,
we think that hopefully they’re making some
type of a small profit off of us and that we don’t
have any heavy industrial waste, so we don’t
have manufacturing, so what we bring is less
that has to be treated and so we feel like we’re
a good customer for them. – I mean these are huge issues. So some people can listen
and say why is Eric talking about sewer systems, but they’re huge. They’re significant
issues and you go back to the growth of
the city of Memphis and those suburbs and
just the mapping out of the sewer system, some
would say that is what fueled so much growth. Out of the urban
core and that Memphis sort of shot itself in the foot by enabling that
simply through sewers and infrastructure. – And this segues a
little bit toward back to the apartment moratorium. There is an analogy there, I think the city of
Memphis annexed without the thought of what
it will cost later on. And so we’re in
the same position if we grow too quickly
with multi-family in certain density in areas than we can’t just grow
for the sake of growth. We have to grow for the
sake of what is it going to produce in revenue and
how that we handle that vis a vis services. And you know I will say this, on the waste water, there
was a lot of anxiety there but the cooler heads
at the end of the day really prevailed and we
agree with Mayor Strickland in the sense of they wanna
take care of their municipal boundaries, but it goes back a
little further than that and in the ’70s and I wasn’t
around in leadership then but a lot of the suburbs
decided to give certain federal money
directed by the EPA to the city of Memphis
to handle a lot of exterior sewer services so this goes back to
almost two generations ago. – Yeah, yeah. You
mentioned Germantown 2030 before that was Germantown 2020, the master plan for
the city of Germantown. Memphis, and we’ve done a
number of shows on Memphis 3.0, and people kind of
don’t know what it is to some degree, we’ve
tried to write about it, some people view when
we’ve talked about it, we’ve done shows about
Memphis 3.0 they said, you know, that’s
just this kind of you know thing that people do and
then they put it on a shelf. What is your experience? Because you were an
Alderman before Mayor with this master plan. Was it a meaningful guide or was it something that
you just sort of check box and wrote a check
to a consultant and no on really followed it, but everyone kind
of talked about it. – Well we’ve done
comprehensive master planning three different times in a 20
year period. ’95, ’05, and ’15. We used consultants
for the first two, our city administrator has
been with us 29 plus years and so part of my
challenge to him was you’ve been around long enough, let’s not pay somebody, can you handle this year
long process with staff? And so we did get Rebecca
Ryan who’s a futurist to come and kick us off
and we had a few other studies that were done. But by and large we didn’t
spend $750,000 on a consultant because we’ve done this before. We spent a year working on
this, nine task-forces were set, they did a lot of work. About a thousand of
our 40,000 residents touched this document
in some form. And yet we actually
implement it. Every Board of Mayor
and Alderman, meeting, every agenda item
that comes forward, my staff, when they
make their presentation, has to demonstrate how it ties
back to Germantown for 2030. Every two years we take
the plan off the shelf, dust it off, figuratively, and see how we need to
augment it or change it. Or to test whether
it’s still relevant. We have a quarterly
dashboard metrics that are on our website
where we measure these different areas. Whether it be land
use, transportation, economic development, public
safety, life long learning, all those different
components we study those. And I will say this. I am very pleased to see
that the city of Memphis is embarking… I don’t
think they’ve done a comprehensive master
plan since like ’81 or ’82, and I had gone to some
of their meetings, the ones that are close,
they’ve had in Cordova so it’s not as far of a drive. I’ve sat in on them I’m kind of a
strategic planning geek and so I go to these
meetings just to listen and they’re doing a good job. – And we’ve talked
about this before. But it is interesting
that this again in 20 something years
I’ve been in Memphis, there is this different tone now of that you and others in the
suburbs have brought forward of collaboration with the city. So suburbs, there was a time
when Germantown, Collierville and other places were
built on this premise of not being Memphis, now
as you’ve said before, you work in Memphis.
You work at roads. And Mayor is
a part-time job for you. So and you’re a part, we’ve talked before I think
about region smart, this group of all these mayors, county
mayors, 20 something mayors in the whole region that
you all collaborate on ideas and share ideas. Talk about the
importance of Memphis. The important of… Can you all thrive
if Memphis doesn’t? – No. Without a doubt,
regionalism is something that needs to be
embraced right now, I’ve said this
maybe on this show, I know I did at the
summit last year. It’s very, you can be
a resident of a region and a citizen of a city. And those two things can
work in harmony together. And they should. There
should be some balance with what happens in Memphis, is going to impact
the entire region. We have a gubernatorial
race going on right now and we have a lot of
those folks spending a lot of time here in Memphis. They understand the
importance of this area. But regionally we do
have to work together and your paper is
one of the sponsors for the Region Smart Summit. It’s something I look forward to this will be the
third one coming up. Because we have that
opportunity to collaborate and combine some of our thoughts you know I will tell
you this right now, there has not been a
better time in this region for all the municipal
mayors and leaders. We are working together
more than I’ve seen. I’ve been involved in
some form of service for 20 years in this region and this is really a good time. And its one of those things
that we should be proud of to be progressive. We work with the Memphis
regional chamber very well, the suburban chambers
have suburban alliance. We come together a lot. So it’s been something
that’s been refreshing. – One of those areas
where you came together I believe is on the
pitch for Amazon HQ 2. So you know Memphis
puts forward a proposal but that proposal
incorporated amenities of Germantown, am
I right about that? – Well we had a large meeting
with all the municipal mayors of all eight
mayors in this region. The seven municipals and
the one county mayor. All the economic
development drivers the EDGE, the suburban chambers,
and the Memphis regional chamber and our approach was, let’s not just say it
needs to be figuratively on one of the bluffs,
the headquarters. Maybe there’s an area between
Collierville and Germantown maybe there’s an
area in Bartlett so we all put forth
areas in our community that could fit this footprint of a headquarters. And so we all worked
collaboratively and right before we put
the application in the mail I think one of the…
Phil Trenary the President/CEO of the Memphis Regional
Chamber and his lieutenants made a great comment. We basically spent what
would take about two years and hundreds of
thousands of dollars to put together the
Memphis region fact book we did it in about six weeks. And you know fact books
are what site locators use when they’re bringing
a business to this region. And they want to have
everything outlined whether it’s
Germantown or Memphis or even Fayette county or
north Mississippi at times. It’s one of those rare
times where you know if Amazon comes here, that’s a boon for
counties, all nine counties in the MSA. – Yeah. Well we
will leave it there. I could ask you more questions, but we’re running out of time. And I will say if
you joined us late, the big news of the week, and you and I talked
about this before, I’m not taking away
from you being here, cause I love
to have you here. The statues coming down. We’ll talk about that
in the coming weeks clearly a big story,
we’ll have Bill here and some other historical
context on that. For now, thank you
for joining us, join us again next week. [dramatic orchestral music] [acoustic guitar chords]

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