The Memphis division of U.S. Foodservice Inc. has agreed to stay in Hickory Hill and not move to Olive Branch, Miss.
U.S. Foodservice announced Thursday it will buy the 175,000-square-foot warehouse it now leases at 5900 E. Holmes Road from Belz Enterprises Inc. and pump $30.8 million total capital investment, including real and personal property.
U.S. Foodservice previously had a letter of intent for a facility in Olive Branch and was under negotiations to buy it. U.S. Foodservice received incentive proposals from state and local governments in Mississippi.
“We evaluated opportunities in both Tennessee and Mississippi before deciding to expand our Memphis facility,” U.S. Foodservice-Memphis division president Joe Campbell said in a statement.
Rosemont, Ill.-based U.S. Foodservice is a foodservice distributor that serves restaurants, hotels, hospitals and schools. It started operating in Memphis in 2000 as Alliant Foodservice Inc. and currently employs more than 200 people. The company’s annual revenue approaches $20 billion, with more than 24,000 associates across 37 states.
The company now plans to buy adjacent land on Bledsoe and Grocery roads to build a 385,000-square-foot vehicle maintenance and fueling facility.
“We are doubling the size of our facility to dramatically increase the number of products we offer our customers,” Campbell said.
U.S. Foodservice went before the Memphis-Shelby County Industrial Development Board in January, which approved a 10-year payment-in-lieu-of-taxes application for the expansion of its current facility, saving the company $6.9 million in city and county taxes.
“We appreciate the support of the IDB, the state of Tennessee and the Tennessee Valley Authority and look forward to creating as many as 60 new, high-quality jobs as our operations grow in this outstanding community,” Campbell said. “We’ve been a member of the Memphis business community for more than 50 years and are looking forward to continuing our tradition of serving the community for many years to come.”
U.S. Foodservice’s operations would generate $11.9 million in local taxes, with a 1.72-to-1 benefit-to-cost ratio. The annual average wage for all jobs is $50,389 before benefits and bonuses.