Aerotropolis drives recruiting

Memphis Business Journal - by Andy Ashby

As cities around the world are seeking an aerotropolis identity, Memphis is staking claim to the title of “America’s Aerotropolis.”

Aerotropolis cities are centered around a strong airport along with robust transportation and logistics capabilities. Memphis economic development officials are using the aerotropolis concept as the lead initiative in their five-year Memphis Fast Forward plan to recruit and retain businesses in the area.

Thanks mostly to FedEx Corp., Memphis International Airport has been the world’s busiest cargo airport since 1992. More than 3.8 million tons of cargo were shipped in 2008. A study by the University of Memphis’ Sparks Bureau of Business and Economic Research and the Center for Manpower Studies at Fogelman College of Business and Economics shows that including passenger operations, construction and visitor impact, the airport generates $28.6 billion in annual economic impact and more than 220,000 jobs, which means more than one in three jobs in Memphis are tied to the airport.

“Then, you have to have connectivity and access for people and for goods through all sorts of other modes to leverage that power,” says Tom Schmitt, president and chief executive officer of FedEx Global Supply Chain. “Not everything flies. You need to look for what’s the best combination of moving goods and people, looking at the lowest cost, the highest speed, the lowest carbon footprint.”

Economic officials tout similar advantages among the other three modes of distribution and transportation: five Class I railroads, the fourth largest inland port in the nation and the third-busiest trucking corridor in the U.S.

“All of this emerged in a haphazard fashion,” says Arnold Perl, chairman of the Memphis-Shelby County Airport Authority. “We’ve had these different modes, but they’ve been silos — they haven’t been connected.”

In 2009, the Greater Memphis Chamber started changing marketing efforts from “America’s Distribution Center” to “America’s Aerotropolis.” In fact, it has trademarked the logo and phrase “Memphis: America’s Aerotropolis.”

“To me, aerotropolis is a compelling world brand,” Perl says. “It visualizes the greater Memphis region in the 21st century.”

Several cities worldwide have seized on the aerotropolis concept for their economic identity.

In March, economic development officials from France, including some from Charles de Gaulle Airport in Paris, came to Memphis for a three-day tour of the area’s four transportation modes. Paris is labeling itself “Aerotropolis Europe.” Similarly, Gaungzhou, China is labeling itself as “Asia’s Aerotropolis.” FedEx hubs in these cities bolster those claims.

Schmitt says by embracing the aerotropolis concept, Memphis is putting its stake in the ground, similar to Central California’s “Silicon Valley” for its technological industries or North Carolina’s “Research Triangle” for its health care pharmaceutical expertise.

Memphis Fast Forward is a five-year plan that runs until 2012. During the Chamber’s annual luncheon in December 2006, the city’s economic development officials started to mold the aerotropolis concept into the lead initiative of Memphis Fast Forward.

The city and county mayors are on the Memphis Fast Forward steering committee, which has four work groups: access and transportaion chaired by Butler, Snow, O’Mara, Stevens & Cannada PLLC senior attorney Julie Ellis, corridor development led by Commercial Advisors LLC president Larry Jensen, gateways and beautification led by University of Memphis president Shirley Raines, and marketing and branding led by Perl, who has been chairman of the Airport Authority for 14 years.

The committees have been looking at ways to marshal government and business support for road projects, whether it is pushing large state projects or beautifying Plough Boulevard, Brooks Road or Elvis Presley Boulevard, all significant arteries to the aerotropolis. Plough alone handles more than 11 million cars annually.

“People who come to visit the community have to have a first impression and last impression of our community,” says Chamber president John Moore. “Those are important to the Chamber because we need positive impressions in order to attract attention to our community to get people to come and recognize our brand and see what we can do for their business.”

It also means increased government participation in recruiting and retaining companies.

Smith & Nephew PLC, for instance, has had its Orthopaedic Reconstruction and Trauma and Clinical Therapies units on the neglected Brooks Road for years.

The London-based company had talked to Memphis economic development officials about the possibility of moving its operations to Raleigh, N.C. in 2009.

The aerotropolis committees pressed for quick action. Shelby County Commissioner Mike Ritz and others pushed for stricter rules for adult entertainment establishments in the area. Memphis Police Department director Larry Godwin assigned more patrols along Brooks, helping to reduce crime. Several efforts were made to clean up the area more effectively. Wharton, then county mayor, lobbied Smith & Nephew’s London leadership, expressing the local government’s commitment to the company.

Because of this commitment, Smith & Nephew purchased the former Concord EFS Inc. headquarters, a 285,000-square-foot office building at Goodlett Farms in northeast Memphis, while keeping manufacturing operations on Brooks Road. The new facility, which involves a total investment of $42 million, means 160 more employees with an average wage of $101,000 a year, including benefits.

“That economic development opportunity was ours to lose,” Moore says. “Because of this activity, we’ve saved the jobs we have, but we’ve opened up the opportunity for growth with that company in the future.”

aashby@bizjournals.com | (901) 259-1732