The Memphis-Shelby County Industrial Development Board meets Wed., Dec. 19, to consider a request from International Paper Co. for government tax incentives to support an expansion of its headquarters here.
Part of the presentation the company will make will include the millions of dollars spent and the significant amount of hours and resources IP commits to volunteer and charitable efforts in the Memphis area.
On one hand, there is a financial incentive for local economic development officials to green-light the company’s request for incentives. In exchange for 15-year tax freezes on several buildings, IP would keep 2,274 jobs here, create 101 new jobs, keep its headquarters in Memphis and build a new 235,000-square-foot, 10-story building along with a new 470-car garage and two pedestrian bridges.
The average annual compensation for the new positions would top $114,000, according to the company, which relocated its international headquarters here in 2005.
IP says it considered other markets outside Memphis for this project but wants it to remain here if possible.
“The status quo, as regards applicant’s current Memphis operations, is not a viable alternative,” the company said in its incentive application documentation. “That decision has already been made. International Paper will definitely be changing the configuration/location of its Memphis operation.
“A new Tower IV on International Paper’s existing Poplar Avenue headquarters campus is the preferred alternative for this change, as it minimizes disruption to International Paper’s business operations. But it is by far the most expensive option under consideration, and it will not be the option selected unless government incentives, including those provided under the PILOT program, can significantly reduce the cost gap between it and less expensive options.”
On the other hand, the company will make as part of its presentation an appeal that the incentives will help it stay in Memphis and continue what it will argue is a strong tradition of corporate giving.
Every year, IP says it provides more than $3 million in Memphis-area giving. The company’s “contributions, in-kind donations and foundation grant funding comprise a significant portion of our giving strategy,” IP said in a summary of its charitable efforts.
Those contributions include, but are not limited to:
• $1.3 million given to Memphis Tomorrow since 2006.
• More than $696,000 awarded in grants by the International Paper Foundation to Memphis area nonprofit groups in 2011.
• $1 million pledged by IP to help make Shelby Farms Park a "defining destination for Memphis."
• More than $600,000 contributed annually by IP to support FedExForum, the Memphis Grizzlies and the University of Memphis men’s basketball team.
• In addition to contributions from the IP Foundation, International Paper contributed more than $350,000 to Memphis through various sponsorships and organization memberships.
• IP employees raised more than $9,000 for the 2012 Race for the Cure team, more than $19,000 for the Mid-South Food Bank’s Operation Feed campaign in June 2012 and more than $100,000 for the 2012 Walk to Cure Diabetes.
• IP spent nearly $60 million on vendors in Memphis over the last 12 months.