FedEx Weighs In on PILOT Incentives

By Amos Maki

FedEx has urged Memphis officials to keep tax incentives for businesses in place and suggested that any major changes to the existing program could cause the company to invest elsewhere.

"As we look at the modernization of the Express air hubs, the availability of incentives by local governments is an important factor to our decisions, whether it is here in Memphis, Indianapolis, Newark, Greensboro or Oakland," Christine P. Richards, FedEx executive vice president, wrote in a July 31 letter to City Council chairman Jim Strickland and Memphis Mayor A C Wharton Jr. "We would be disappointed to see action taken to change the PILOT program, particularly with respect to retention, that would disadvantage Memphis in comparison to other locations.”

The letter was distributed Tuesday, Aug. 19, during a council discussion on the payment-in-lieu-of-taxes, or PILOT, incentive program. The Memphis-based shipping giant saved around $3.2 million last year because of the PILOT program. A PILOT on the company’s global headquarters is slated to expire at the end of the year, according to the Shelby County Trustee’s office.

The PILOT program has come under scrutiny in the wake of reductions in city employee and retiree benefits. Critics, led by municipal labor unions, say the program is a drain on city coffers. But business officials have staunchly defended the program, saying it is essential to creating new jobs and tax revenue.

“We have seen the benefits to the community that have resulted from the PILOT program, both as it applies to attracting, but also maintaining job-providing businesses,” Richards wrote. “We are disturbed at indications that modifications to the PILOT program to retain Businesses might be implemented.”

The council did not take any action on the PILOT program Tuesday.