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On a balmy, fall Mississippi morning in 2004, a few dozen ranking members of DeSoto County’s tightly knit business community gathered in the rain for another ceremonial groundbreaking.

In his address, Southaven’s mild-mannered mayor, Greg Davis, crowed.“This will send us to the top of the heap in the retail industry in the Memphis metro area,” he said, plunging a shiny shovel into a trough of mud on the site of the Southaven Towne Center.

One year later, the bustling, 450,000-square-foot shopping center off I-55 is gaining on East Memphis’ well-heeled Wolfchase retail corridor. The $180 million mall is expected to add more than one million dollars in annual sales tax revenue to Southaven, which gets more than half its budget from sales taxes.

Once a bedroom community, DeSoto County has grown into a formidable rival for Memphis area business prospects.

Its unified political oversight (uniform building codes, costs, etc.), helped DeSoto lure developers like CBL & Associates, which built the mall south of the border with a streamlined, business-incentive strategy that many feel is more navigable and accountable than Memphis’ payment-in-lieu-of-taxes (PILOT) program.

Last fall, a study commissioned by Memphis/Shelby County planners showed DeSoto’s advantage over Memphis in attracting capital investment because of its simpler tax-abatement program, proactive infrastructure improvements, stable tax base, superior schools and better labor.

Memphis officials bemoaned the lost investment—but not as loudly as the lost sales tax dollars collected from Memphians who shop across the border at the new mall, Wal-Mart, Target and myriad grocery stores along the state line.

Some City Council members chastised locals, particularly in poor, black neighborhoods like Whitehaven, for abandoning area retailers for the cheaper sale taxes in middle-class, white cities like Southaven.

The city’s prosperity has attracted some unwanted attention. In acts of border banditry, some Memphis natives have been holding up Southaven stores and banks, then retreating through neighborhood “escape routes” to relative safety across the state line. The trend pushed Southaven City Hall to close the residential roads into Whitehaven, drawing cries of racism from outraged Memphis council members.

Life south of the border is attracting more than frugal shoppers, developers and crooks. Census figures show Shelby County lost well over half a billion dollars in net income from 1995-2001 as high-earning residents moved to suburbs like DeSoto. Gene Pearson, director of the Regional Economic Development Center at the University of Memphis, says the outflow is merely a reshuffling. “We’re fairly unique—a city over 500,000 sitting on the border of two states,” Pearson points out. “DeSoto was in the path of Memphis growth.”

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