MEMPHIS, TN (WMC) - The WMC Action News 5 Investigators are taking a closer look at the millions of dollars worth of incentives on the table as part of the FedEx Logistics deal. Tuesday the company announced it planned to relocate to the soon-to-be vacant Gibson guitar factory in downtown Memphis.
Wednesday, at least one state watchdog group is wondering if the incentives are too much.
"As a business owner, if we’re thinking through their lens, of course you’re going to get as much from the government as you can, that’s part of running a business is creating as much of a profit as possible,” said Mark Cunningham with The Beacon Center of Tennessee.
The Beacon Center, a Nashville think-tank, is opposed to deals like the one being proposed to land the headquarters of FedEx Logistics in downtown Memphis.
FedEx Logistics is asking for a variety of incentives, as part of its headquarters move to the soon-abandoned Gibson guitar factory in downtown Memphis. One is a $2 million grant from the EDGE board, along with a $1 million grant from the Center City Development Corporation.
Both would be used to retrofit the space for office use.
FedEx Logistics plans to lease the building from its owner – Somera Road. That group is asking for a 20 year PILOT that would save more than $1.6 million.
“The conversion of the building from manufacturing use to office use presents significant challenges,” the PILOT application reads, “The required public assistance is needed to make the proposed downtown location competitive with alternative locations.”
Cunningham asserts taxpayer money shouldn’t be used to finance private building improvements for a private business.
“This is our hard-earned tax dollars, and we shouldn’t be giving it to a multi-million dollar business,” he said Wednesday.
EDGE documents show FedEx Logistics will receive incentives from the state of Tennessee. Governor Bill Lee said Tuesday the figures weren’t finalized yet but promised they would be made public.
“When this negotiation is finished, there will be accountability provisions, incentives from the state, but accountability provisions as well to make certain that taxpayers know what they’re getting, and there is accountability around the number of jobs being created,” Lee said.
The scrutiny over incentives comes as Electrolux announced weeks ago it would leave Memphis by 2020. State officials said an incentive package offered to land the appliance manufacturer did not contain claw-back provisions, so the company was not required to pay back $100 million in taxpayer funds.
The PILOT application and the grant application for FedEx Logistics are expected to be heard Thursday morning before the Center City Revenue Finance Corporation and the Center City Development Corporation.
The EDGE board meets Thursday afternoon for the additional grant in for a special called meeting.
If approvals follow the timeline laid out in application paperwork, demolition is set to take place in February of 2019 with construction launched in July 2019. The project, with no delays, would be completed in the first quarter of 2020.