FOX13 Investigates: Millions of dollars meant for families after defense depot closed have vanished

MEMPHIS, Tenn. — Near the old Memphis Defense Depot, streets are lined with vacant homes left to rot and millions of dollars meant to help the area’s families continue to thrive are gone.

“This lot used to be full this time of day, but after they closed down, everyone just moved on,” Thomas Parham, a 50-year resident of the Depot area, said of the empty lot outside a restaurant.

In the Depot’s heyday, it helped the U.S. Army win World War II and built an ecosystem in South Memphis. Families found work and the economy thrived.

“Grocery stores, car shops, bakeries, restaurants,” community activist Marquita Bradshaw said. “This was a neighborhood where you didn’t have to leave to get anything you could want. We even had a florist.”

All that ended in 1997, when the Army shut down the Depot, the community’s economic hub.

“They forget about everyone around here,” Parham said. “You’ve got to put money into a neighborhood. You can look at the neighborhood and see what it looks like now.”

The impact was dramatic. Since 2000, the Alcy Ball neighborhood just south of the Depot saw its population drop by 16%. Homeownership dropped by nearly a third.

“This area lost population and we lost a legislative seat for the entire Shelby County,” Joe Kent, a taxpayer advocate, said.

The changes led to the neighborhood people can see today.

“When you have population loss, you’re not having economic development and improving quality of life for people in that area,” Kent said. “They are moving because they are trying to get away.”

Kent believes the community wasn’t supposed to be abandoned. The Army left the property in the hands of the Depot Redevelopment Corporation, or DRC, intended to keep the community thriving. The corporation sold off the land and brought in new companies.

“They commercialized that property, sold the assets for about $35 million,” Kent said.

By 2012, the DRC started doling out money for projects far beyond the Depot area. According to board minutes studied by FOX13, $2.5 million were loaned out for road improvements near the Mississippi River, $100,000 in seed funding was provided to the Air Service Task Force, aimed at improving local airports and more than $300,000 were granted to Regional Economic Development.

FOX13 traced millions of more dollars poured out over the following decade.

“In 2018, it gets really nasty. The depot board does not even convene,” Kent said. “EDGE ends up extracting money out of the depot without providing public notice and redistributes it to other areas of town.”

EDGE, or Economic Development Growth Engine, oversaw the DRC. Minutes from the EDGE Board’s June 2018 meeting show a series of grants were authorized from DRC funds. $900,000 went to the Greater Memphis Alliance for a Competitive Workforce. $200,000 went to rail improvements on President’s Island. $600,000 went to the Arlington, Bartlett, Collierville, Germantown, Lakeland and Millington chambers of commerce to benefit businesses miles away from the Depot.

“There weren’t any discussions. That’s what was so amazing about it,” Kent said. “The redistribution, the direct public disinvestment, was buried deep in budget documents.”

EDGE continued to hand out millions in grants and loans from Depot funds until the DRC was dissolved just two months ago, in December 2022. The account that once held millions of dollars was left with a remaining balance of just over $2,000.

“They just diverted the funds,” Bradshaw said. “As of yet, the EDGE board has not made a plan to make investments for this community.”

FOX13 tried to ask EDGE why they spent the Depot money the way they did. EDGE canceled its January meeting.

FOX13 reached out to every EDGE board member through various means, including calls, emails and social media messages. Three board members referred us back to EDGE staff, so we reached out to an agency spokesperson, who declined to appear on camera.

The spokesperson said the DRC’s last $2,000 were split between Memphis and Shelby County.

“Ain’t nothing I can do about it,” Parham said.

Those like Parham, who live near the old Depot, still wonder how the sale benefitted them.

“I don’t know what’s happening,” he said. “I’m 70-something years old and I get left out.”