VOL. 128 | NO. 155 | Friday, August 09, 2013
EDGE Approves Incentives for Wright Medical
By Amos Maki
Arlington-based Wright Medical Group Inc. is one step closer to relocating its headquarters to Memphis.
Wright won approval Wednesday, Aug. 7, from the board of the Economic Development Growth Engine of Memphis and Shelby County for a 15-year tax freeze to allow the company to retain 225 jobs, add 35 new jobs and invest $10.6 million into a new headquarters on Cherry Road in East Memphis.
Wright Medical Group Inc. is a step closer to moving its headquarters from Arlington to East Memphis.
(Daily News/Andrew J. Breig)
Wright senior vice president and general manager Bill Griffin said the payment-in-lieu-of-taxes agreement was critical to the company’s ability to keep the jobs in Shelby County.
“I don’t know that we would consider another place at this point,” said Griffin. “If we had not got this approval today, we would have gone back to the drawing board.”
EDGE said the project would create $19 million in new tax revenue for Memphis and Shelby County while saving the company $4.6 million. EDGE said the average salary of the 35 new employees would be $70,000 and the average salary of the 225 retained employees would be $108,000.
The medical device company’s $290 million sale of its OrthoEcon knee- and hip-implant business is driving the relocation. Wright has been considering multiple sites for a possible relocation, including out-of-state locations and the wooded office park at 1023 Cherry Road.
The deal means most of Wright’s current employees will remain employed in Shelby County because OrthoEcon would keep the knee and hip operations at Wright’s current headquarters, at 5640 Airline Road in Arlington.
“This will be their worldwide headquarters for their orthopedic business,” said Wright senior vice president Julie Tracy. “There’s not many instances like this that are truly a win-win-win.”
Wright Medical said the relocation will include all of the company’s “core administrative, executive, sales, accounting, and research and development functions.”
The company will leave its current location by Oct. 1. Wright will lease a total of 89,834 square feet at the East Memphis campus – 63,834 square feet in Building 1 and 26,000 square feet in Building 2.
The application approved by the EDGE board allows Wright to add properties to the PILOT as long as the cost-benefit ratio equals at least $2 in new tax revenue for every $1 of taxes abated. The company’s total investment could be $9 million instead of the projected $10.6 million, as long as the project’s cost ratio exceeds $3 in new tax revenue for every $1 abated. The current projected cost-benefit ratio is $4.56 in new taxes for every $1 abated.
Wright had not delivered its Diversity Report to the EDGE board prior to Wednesday’s meeting.
EDGE board Chairman Al Bright reminded company executives that the citizens of Shelby County were supplying the incentives and urged them to think locally when hiring.
“I want to make sure that our citizens, Shelby Countians, have an opportunity,” Bright said.
Griffin said the move to the Cherry Road campus – the former home of Holiday Inns and Harrah’s Entertainment – in the heart of East Memphis, allows most Wright employees to stay close to home while being nearer the area’s amenities, such as housing, restaurants and retail.
“We’ve got a lot of people affected by this,” Griffin said. “We didn’t want to go to Jackson, Miss., for example, and expect these people to drive two hours to work every day.”
Griffin described the local incentives process, which has come under fire by some over the years for being too cumbersome, as a relatively simple one and praised EDGE staff and leadership.
“Memphis was very competitive, and we were able to determine that right away,” Griffin said.