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- Elon Musk comes to Memphis, city, county and suburban budgets and much more.

Tonight, on Behind the Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

I'm joined tonight by a roundtable of journalists talking about some of the biggest stories of the past few weeks.

Up first, Toby Sells, news editor, Memphis Flyer.

Thanks for being here again.

- Thank you for having me.

- Abigail Warren, reporter with The Daily Memphian.

Thanks for being here again.

- Thanks for having me back.

- And along with Bill Dries, reporter with The Daily Memphian.

We'll start with the Elon Musk news, xAI, one of the Elon Musk many companies, this one focused on AI is investing, I think it's an indeterminate number, but it's $1 billion to $2 billion.

It'll be the world's largest supercomputer, 100,000 chips in this massive facility going in where the old Electrolux factory was.

Bill, Your take?

I mean, it was there were sort of rumors, there were noises and there were sightings of Elon Musk in Memphis eating at various restaurants.

Your take on it as it all developed?

- Well, and it got even harder to parse because as people may remember, Elon Musk's brother ran a restaurant out of Shelby Farms.

So there was some thinking, well, maybe he's just here to visit family.

- Right.

- But with the announcement made, there are probably more questions now than there were at the outset of this is.

And a lot of those questions, I think, reflect kind of the uncertainty about what this means economically for Memphis.

Obviously, financial incentives are going to be involved in this, but how many jobs is this one of those plants where you just really turn something on and close the door and leave, turn the lights off and it does whatever it does without really too many people being there.

So we don't know that.

We know it's going to use a whole lot of water and a whole lot of electricity.

Although Doug McGowen, the CEO of Memphis Light, Gas and Water, says that that the grid can handle whatever they're going to bring in.

But there are, you know, really the first critical comments on this came from environmental groups who were saying, well, we need to kind of be in the mindset of paying more attention to these massive uses of water from the aquifer.

And is there a gray water that that could be used for it?

So overall, I think there are more questions than answers right now.

- We'll come to Toby here in a second talk about some of that, some more sort of facts.

And I was at-- The Greater Memphis Chamber was very involved in this.

They did a big presentation on it yesterday for the public.

And, you know, their take is it was it will be over 200 jobs very high-paying jobs and that there is the possibility of other companies related to Musk coming to Memphis that this could be just the opening salvo.

He runs many different companies, the ones people obviously now are Tesla and xAI, SpaceX, StarLink, the satellite phone company, and The Boring Company, which does tunnel, like massive tunneling.

I think there's a couple others in there that I'm not remembering.

- Yeah, but he also runs X.

- Yeah.

And I did mention Twitter.

- And that is causing, I think, a lot of anxiety about this because of the way that he's run a company that, to be fair, a company that he acquired not a company that he founded, but that is kind of causing people to look over their shoulder.

- Yeah.

Toby, bring you in on this.

- A lot of folks out there have said this and it's a kind of goes what Bill was saying.

I think we kind of went the Jurassic Park process on this.

We asked could we do this before we asked maybe should we do this?

And it's because a lot of his inflammatory remarks on Twitter and the way he's run his company, frankly, I mean, you know, he is a vocal opponent of diversity, equity and inclusion.

Before that was even like a cool acronym.

That's the bedrock of this community in Memphis, right?

And he has said plainly that he is against this thing.

Women say that Tesla is like an old boys club and alleged sexual harassment out there.

Elon Musk himself has said that being gay is a lifestyle choice.

You know, in 2021, a federal jury awarded a man $137 million in a hostile work environment lawsuit because he was working, he was a contractor, he was a black operator elevator at Tesla.

And he said his fellow employees, they were using the N-word.

They were drawing swastikas and other things.

Management refused to step in to do anything about this at all.

It got so bad he finally filed the lawsuit and a jury agreed with him and in management after that just said, well, you know, the other employees were joking around, you know, and didn't take it that seriously, you know.

And in January, Musk tweeted that, you know, a plane is going to have to crash and people die before we get rid of these diversity equity inclusion programs everywhere.

And, you know, I want local leaders to think about that, to go to their DEI officers that they have in place and look and say, okay, let's just look at his history.

Let's look at his Twitter history and say, would we hire this person?

You know, And that becomes a really sticky, sticky part there.

And also, as you know, we're getting ready for incentives and EDGE and all those things.

He has said plainly that he does not believe in public incentives for projects, even though his company has had hundreds of millions of them.

So a lot to think about.

And there's a lot of anxiety, like Bill said about Musk coming in just because of who he is.

- It is an interesting thing.

And I think some people would I think some people involved in the project would push back and say, like, there are people with those values who are not so high profile that have companies or presence in Memphis and that.

But Elon Musk is Elon Musk, the richest or sometimes the richest man in the world, depending on the day and the stock market, the valuations and this incredibly prominent person on Twitter or X, whatever it's called now.

So I think that that is it is a quandary when someone is so public about these views that a lot of people find offensive that other people embrace.

And that makes that's a real quandary.

- Yeah, and maybe there's there's tons of CEOs in Shelby County that we don't know about, but we know about Chick-Fil-A and we know people have real quandaries about even going to Chick-Fil-A over stuff they've done in the past.

You know, and he's so public about everything and it makes it really, really sticky.

I mean, people won't buy Teslas because what they think of Elon Musk.

- But the other thing that I think is in play here is, are we too optimistic about this?

And we've certainly been accused of having these kind of announcements before Electrolux came here in 2011-- - Again, the facility they're moving into, yeah.

- Which is where this is going to be at.

And and, you know, all of the all of the local leaders who were so up on Electrolux coming here and yeah, this is the way forward and we're on our way out of the recession years later, some of them on this show admitted after the fact, well, after the fact, it really wasn't that good of a deal for the city.

In fact, it was probably a lousy deal for the city, but we needed a win.

So you've got that history and you've got Mayor Young, Paul Young, the mayor of Memphis, who campaigned on this, on this on this plank of his platform that said, Memphis is the largest market of black women who work in tech.

And we need a company to take advantage of that.

Is Elon Musk's company really going to take advantage of that?

- It's interesting on the, excuse me, on the incentives, it's not clear yet.

You know, a lot of these deals, when they come forward, it's all contingent on incentives.

This is moving forward.

They've been working out at the site.

They've been putting money into it.

There's going to be, it's clear, some sort of incentives, but it's not even today, the story that Sam Hardiman and Sophia Surrett on our staff did, it's still not clear what sort of what sort of incentives are going to ask for.

It's also notable the state has said nothing about this.

I mean, they haven't even tweeted something like, Yay, Tennessee, We've got the world's biggest supercomputer coming to Memphis.

Same with ECD, the governor's office.

As of the time we're taping this, they hadn't really said much of anything.

So the incentive thing is very it's different than many of them.

Electrolux is interesting, too.

And think about it because we're coming up, you and I, Bill, on our 15th anniversary.

Toby was on the show not long after, but so 15 years we've been doing Behind the Headlines.

And I remember doing stories.

Come September, I think it's 15th, we'll go into our 15th year.

The Electrolux was this poster child for we're coming off the recession.

We got this incredible manufacturing coming in.

We're going to have thousands of jobs.

And then it just never achieved what it wanted.

And I was talking to somebody recently who was very involved in the incentives in the time worked in the administration that did that deal.

They did put everything on the table in a kind of desperate note, I mean, my word, not theirs, desperate way to get that job, get that plant and those jobs.

And it didn't work out.

There were no clawbacks.

There was a lot of giveaways.

This one and others, many, many others.

That one really is the poster child for giving a lot of away with no way to get it back.

And it's hard to find one that's been quite that generous, I would say.

- Yeah, well, the big difference with this is, is that usually when there are incentives involved, what happens is there is the announcement and then the next day or in some cases the same day EDGE meets or the Downtown Memphis Commission, the Center City Revenue Finance Corporation, they meet either that day or the next day.

So the process for incentives on these things usually moves very rapidly.

I mean, the meetings are already lined up for those boards to go ahead and approve it.

And in this case, it's much different.

- Let's move on from, and we may come back to and touch on some of that stuff.

But I want to get Abigail in here.

One of the things that is in play, the questiobs is around power and utilities, both electricity and water.

I think, Doug McGowen, you mentioned, CEO of MLGW, said the new need from the plant will be something like 5% of current power, daily power on average, about 1% of water.

It's millions of gallons of water every year.

The xAI is going to put its own gas turbines.

I think some of them are already in there or are about to be in there so that they can generate their own power.

There is talk even that they'll be able to put some power back into the grid when they don't need everything from those turbines.

A lot of things to kind of sort out.

But this is all happening at a time when the suburbs are trying to get representation on the MLGW Board.

You very specifically cover Germantown and Collierville.

Mike Palazzolo, the Mayor of Germantown, has been a very vocal sort of advocate for, hey, we are a major, we Germantown major customer of MLGW.

Why don't we have representation?

Where does all that stand?

- Yeah, the suburbs make up about 30% of MLGW's customers and so they provide electricity.

And so really it's it's been a question for a while.

Why don't they have representation on the board?

Why don't they have a voice?

Why are they subject to Memphis?

And so it's been a ask for a long time.

It's come up several different times.

It came up a little bit when there were the TVA discussions.

- But-- - Moving away from TVA, to getting another power provider.

- Yes, and so the suburbs were very concerned about that.

But that kind of, this discussion comes up.

But that was one thing that made the discussions a little bit louder.

And so it's coming up again as the MLGW looks to possibly have suburban vote, the City Council does have to approve that to go to a referendum, and they're not even there yet.

Bill can probably speak better to that, as to where that is.

But yeah, on this week at the MLGW meeting Mayor Palazzola from Germantown, Mayor Joyner from Collierville and Mayor Parsons from Bartlett were all there.

There were others that had interest in it but couldn't be there for various conflicts.

But it's been a long conversation and something that they wanted for a long time.

- We'll talk with Bill in a second about what, the logistics of how that decision gets made by the city, which is the owner of MLGW.

tell me again do the suburbs get their water through MLGW, also?

- Germantown has its own water.

Okay.

Oh yeah.

Because we know that because of bad things last year.

And oh, how we forget so quickly.

- Collierville has its own water and I believe Bartlett has its own water as well.

- It's-- It is electricity.

And I'll remind everyone that most of that electricity is actually MLGW getting it from the Allen plant owned by TVA.

Is that-- I got that right?

- Or the TVA grid in general.

- Or the TVA grid in general.

Thank you.

So what is, where are we in terms of the City Council looking at this idea of bringing in, I think two seats is what's on the table.

They're maybe what, nine MLGW board members?

There are five voting members now.

- Like I said, five voting members.

- Exactly.

[all laugh] - Keep going, I'm sorry.

- And by the city charter, all of those appointees by the mayor, confirmed by the Council must live within the city of Memphis.

So the Council had its first really serious open discussion, at least about this in committee this past week.

And the overwhelming reaction was hostility.

- Yeah.

- And that's important because, as Abigail pointed out, this would be a ballot question that would go on the November ballot if the City Council passes a referendum ordinance to put it on the ballot to amend the charter.

- This November?

- This November.

- There's still time.

- There is still time for that.

There is not time to put it on in August, which we'll talk about later in other regards.

But yeah, it would be a November ballot question and it really looks at the outset of this like there are not going to be the votes on the Council to even put it on the ballot.

- Are they looking for voting seats or just-- - Voting members.

- They have observers now.

- When Doug McGowen became the CEO, he moved to have two voting-- two non-voting members from the suburbs on the board and they are on there now.

- Toby, any take on the MLGW thing?

- No, sir.

- You're fine, okay.

And did I miss anything from the suburb perspective on that?

Okay, So all that's moving forward, let's stay with City and we maybe get to county.

It is budget season.

We'll talk a bit about the suburban budgets as well, which are less, less eventful.

But the city budget let's start there.

You know, Paul Young came forward, the relatively new mayor, what, a month, two months ago and said, well, we're looking at potentially a 75 cent tax increase, lots of uproar, lots of pushback.

Now we're in the real sort of meat grinder phase of trying to figure out what the budget's going to look like in terms of expenses and revenue.

Where are we?

- The Council members are are whittling away at that seventy-five cent figure.

Their goal is to get it down as much as they possibly can.

I think they're probably still looking at some kind of property tax hike, but their goal is for it not to be anywhere near 75 cents.

So they're looking at at various things.

The one that's gotten the most attention is the traffic ticket amnesty program, which would be about $140 million in unpaid tickets through the end of June.

If you want to pay those tickets off at half of what you owe, then that option is available to you.

Nobody thinks they're going to get all $140 million [guests chatting] or even or even close to that.

But if if they did, it would be one-time only money.

You would have the very same budget hole or need conceivably a year from now in the next budget season.

One of the other things is maybe raising the city's car registration fee that you pay once a year, which is now $30 - Oh, when people get new tags.

- Right.

- Through the county clerk, a lot of that goes to the county and that portion goes to the city there, okay.

- Every city has a registration fee Memphis included, and it's $30.

And there are some talk of increasing that.

That's a pretty complex path because it goes through the Shelby County Clerk's Office.

And the Shelby County Commission would probably also have to approve that hike.

- If it goes through the clerk's office, what could go wrong?

I mean, it just seems like the Shelby County clerk is running, is a well-oiled machine right now.

There's a whole lawsuit against the Shelby County clerk, which we'll try to get to here in a little bit with a hearing and then I think a trial date in August, I believe?

- Yes.

- Yeah.

Okay.

Let's do the county budget real quick.

And then so county budget, not as bad a situation, but they are talking about putting a hold on, the Commission is talking about maybe pausing on some of the big ticket investments in local schools and Regional One.

- Right.

The County Commission had its big easier to understand struggle a year ago when they voted to raise the wheel tax, the annual wheel tax, something else that's also on your car registration notice, by $25.

So what's happening this year is primarily that Lee Harris, the Shelby County mayor, wants to put the capital projects on a 10-year schedule.

Normally it's a five-year schedule.

He wants to put it on a 10-year schedule And that way you can space out and everybody can know, namely, how the payments are going to go for this massive rebuild of Regional One Health, rebuilding the campus.

Harris in this budget has upped what was going to be the first $350 million into the project.

He said well, the state didn't come through with it's part of this so what we're going to do is we'er going to do $500 million and just pay for the whole first phase to get this thing rolling.

And the state will probably come along later.

Well, now some county commissioners are wondering, well, what does that do to the two new schools that were also going to be built in this?

And there's some thinking by some of the commissioners that they need to maybe say one is the priority and the other two are not the priority on this.

More discussion still to come on this.

And I would look for the administration to really adamantly defend that 10-year capital schedule.

- Let's switch to the suburbs.

We talked a bit before the show and you've been writing.

I mean, the city budgets in Collierville and Germantown are pretty maintenanced budgets, but the schools, there's a little bit more conversation going on.

And all that is against the backdrop of election season.

- For sure.

It is an election year.

The property tax in Germantown and Collierville is not raising, it's staying flat, so that's really the biggest news out of the suburban budgets there is, though, in the schools' budget in both Germantown and Collierville, the governor has asked school districts before the 2026 fiscal year, which starts on July 1st of 2025, to have teacher salaries starting at $52,000.

And so Germantown and Collierville have both already gone ahead and said that that's going to be their starting teacher salary heading into next year.

So they're ahead of, they're ahead of the curve.

I think Germantown is going to be right at $52,000 and Collierville is going to be about $500 ahead of that.

But both of their budgets have teacher bonuses during the holidays, which was a little bit of a concern.

Last year in Collierville, there was the thought that they may not be there and then they were there.

So, yeah, that's the biggest news out of the budgets.

- The election season, the big stories are what for again, Germantown and Collierville, the areas you cover.

- In August they have judge races.

So Rhea Clift is facing against Justin Gee.

And then in November, there's a lot more.

So in Collierville Alderman Sherrie Hicks and Alderman Brian Ueleke are running for reelection for their seats.

Alderman John McCreery has not said what he's doing yet, but we will probably have news on that in the next couple of days.

And then in Collierville Oh, and there's three school board seats.

Amy Eoff has not said whether or not she's running for election, but Ryan Strain, who's the chairman in Germantown, and Brian Curry, who's on the school board, they're running for reelection.

And Collierville, it's a little bit more interesting, not that it's not interesting in Germantown, but in Collierville there's a lot.

So on the school board you've got Paul Childers, who is running for reelection, Wright Cox who's running for reelection, and then Wanda Gibbs, her seat is also on the ballot.

She's not said whether or not she's running.

But then there's a two year term that was won by Keri Blair back in 2022.

She resigned after being arrested for shoplifting from Target over seven different trips, a total of $700-- - Obstensibly documented.

- Of merchandise.

And so the remaining-- - It's funny, not funny.

- There's been his name is Mr. Green.

He's been appointed for two years to finish out this part of Keri's term.

But the remaining two years of her term will be on the ballot.

On the board of Mayor and Alderman, can I keep going?

On the Board of Mayor and Aldermen, are a little bit more interesting.

John Stamps and John Worley are both seeking reelection.

The mayor seat is also on the ballot.

He is he told me this morning he is open to running.

He doesn't, he's not committed one way or the other.

But if he doesn't run, they have a resigned to run rule.

So if Billy Patton or Marion Fraser or Missy Marshall wanted to seek the mayor seat, they would have to resign from their seat.

And then after the election, the alderman would appoint people to fill the remaining two years of their term.

- And we'll be covering all this extensively at the Daily Memphian?

- All of it.

- Quick shoutout to the Daily Memphian.

I want to do a jump from the incentives and bear with me on the cognitive leap here.

The other thing came up in city budget season is that the Fairgrounds redevelopment, the TDZ there is underwater.

It has been for a bit, about $2 million under what was projected in terms of the increased tax, taxes that would come from that.

The city is on the hook for that.

There's some leases to apartments, hotels and entertainment district.

City Council's really mad about it.

There's also some more to come on that.

Bill and others are covering it.

There's also the city is paying $2 million to the Grizzlies for operating shortfalls at the FedExForum this year.

As they you know, and meanwhile, renegotiating a lease and these are the things that make people mad, Toby, about incentives in these programs, in these investment districts and so on.

But you did a story on the Memphis Medical District and the EDGE.

See, there was a cognitive leap.

- That was great.

- Wasn't that amazing?

Came all the way around to the Edge District within the Medical District.

And it's really kind of a lot of very good things are happening.

- That's right.

And wrote a great, not a great, but I wrote a cover story this week about it.

And there's there have been plenty of incentives over there from DMC, MMDC, the Medical District folks over there.

But these have been smaller incentives.

Right?

We're not talking about these big blockbuster, you know, million dollar things.

It's thousands of dollars here and there.

And something really special is happening over there.

If you look at our list, there's 15 column inches of brand new real estate, brand new art galleries, breweries, restaurants opening in the EDGE within like the last year.

And I think there's a lot of energy happening over there, and you talk to people and it's all pretty organic.

You know, the City Council didn't order some special report done on it or anything.

It's been neighbors talking to each other, working together.

Then you had Orion Federal Credit Union move in, that's a big powerhouse over there.

Then you got Orleans Station over there where people can live.

And so the idea is to take this once empty neighborhood, fill it up with all those people that work in the Medical District, and so they can live, work and play right in one place.

And it's got potential.

I think it's the next maybe Broad Avenue or South Main or one of those.

- With just a minute left, I mentioned the Halbert.

Let's go back to that so I don't leave any loose ends on what's going on with County Clerk Wanda Halbert.

- Okay.

A special prosecutor, as a lot of people may know, filed a lawsuit in circuit court to oust Wanda Halbert from her job for willful neglect.

The first hearing has been held on that now.

So we've got a bunch of dates to schedule.

What's going to happen is basically the trial on this happens in August, late August.

Before that, though, later this month in June, there is going to be a hearing on whether or not Wanda Halbert should be suspended from her position in the run up to the trial until the trial is decided.

- And again, Womp cites a 2022 backlog in renewing vehicle registrations, many of them with car dealerships, closing of offices after leases lapsed in kind of strange ways, incorrect monthly revenue reports that prompted the state to come in and send an audit team to Memphis.

And the reports were still wrong.

So just Bill and others have been covering that.

I mentioned the Flyer is, too.

There's a lot to follow there.

That is all the time we have this week.

In the next few weeks, we've got juvenile court Judge Sugarmon coming on.

We've got Memphis, Shelby County School Superintendent Marie Feagins coming on.

We've got a couple of the suburban school superintendents coming on and we've got the interim president of CBU with everything they were sort of up against.

And they seem to have turned that ship around.

So join us in coming weeks.

But that is all the time we have this week.

Thanks.

And we'll see you soon.

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