MEMPHIS, TN (WMC) - Two days after its announcement, FedEx Logistics has already secured a number of local incentives to relocate its headquarters to the old Gibson guitar factory in downtown Memphis. Now the company said the next step is examining the incentive package from the state of Tennessee.
This is going to be transformational for this area of downtown," said Jennifer Oswalt, President of the Downtown Memphis Commission.
Thursday morning, FedEx Logistics and its representatives appeared before the Center City Development Corporation and the Center City Revenue Finance Corporation, gaining approvals for a $1 million grant and a PILOT (payment-in-lieu-of-taxes) extension for the building’s owner Somera Road, which will abate millions in property taxes over two decades. By Thursday afternoon, those same representatives were before the city-county EDGE board sealing another approval for a $2 million grant.
The Downtown Memphis Commission (DMC) said the abatement amount involving landlord Somera Road and tenant FedEx Logistics is approximately $28 million but actual figures aren’t certain since appraisals are based on market values. The DMC said the building will add more than $7 million to city and county tax rolls if it is occupied, versus sitting empty, making the case, for the PILOT incentive.
Wednesday, WMC Action News 5 spoke with a state watchdog group that opposed public incentives for projects like the one proposed for FedEx Logistics.
“It’s good business for us to explore what opportunities are available especially for this project,” said Rachael Simmons, Managing Director of Communications at FedEx Logistics.
FedEx Logistics said $3 million in local grants will be used to help cover the costs of retrofitting a manufacturing facility for office use, and the grants were needed to make the Gibson site competitive with other office locations.
“Having the right re-use for that building, not just a reuse is also critically important,” said Reid Dulberger, President and CEO of EDGE.
Economic development officials noted Thursday landing FedEx Logistics on a vacant piece of downtown real estate was a priority.
“We have lived through Peabody Place mall sitting empty for a really long time. The pyramid sitting empty for a really long time,” said Oswalt, “This could’ve been another one.”
The move is set to consolidate FedEx Logistics offices now spread out across the city. The company has promised 662 jobs at the finished site, with roughly half of those existing, the other half new. The average salary would exceed $80,000, excluding benefits.
FedEx Logistics said the move reaffirms its commitment to the downtown revitalization of its hometown.
“Memphis is home for us and we’re very proud of that,” said Simmons, “It means a lot to us, a lot to our employees, to be a part of that effort.”
FedEx Logistics plans to lease the building but would have the option to purchase it after a few years, company officials said Thursday.
The company said the state incentive package is not complete and would likely be finalized in mid-March. Governor Bill Lee has previously said those figures would be publicly released and would include claw-back provisions.