VOL. 129 | NO. 117 | Tuesday, June 17, 2014
EDGE Mulls Tax Break for Plastics Recycling Co.
By Amos Maki
A company that recycles and manufactures post-industrial plastics is considering relocating from Arkansas to Memphis.
Canadian National Railway Co. is seeking to acquire more land in Frank C. Pidgeon Industrial Park. CN would pay $12,000 an acre for the land, for a total of roughly $228,000.
(Daily News File/Lance Murphey)
RE-CY, or RE-CY Plastics, is considering acquiring a facility on Winchester Road to recycle and manufacture plastics, which are then used for automotive parts, decking and IKEA furniture.
The business, which has 15 employees now, has the ability to process around 20 million pounds of material each year and would like to increase that to 35 million pounds.
The company would buy a building at 611 Winchester Road and invest $6.7 million in the relocation and expansion, including moving some equipment from Searcy, Ark., according to the company’s request for tax incentives from the Economic Development Growth Engine of Memphis and Shelby County.
RE-CY said the “planned expansion outlined in this application could eventually lead to a further expansion.”
The company would eventually hire 36 employees. The average total compensation for the employees would be $53,606, including benefits.
RE-CY said it was considering “potential other locations in the Mid-South” and the payment-in-lieu-of-taxes incentive it is seeking would “tip the scale in favor of relocating to Memphis.”
“This business is based on a spread of mere pennies per pound, and in order to remain profitable and generate enough cash flow to justify further investment, the tax and cost situations must be at least on par for a relocation of the business to occur,” the company stated.
According to an EDGE staff analysis, a four-year PILOT would save the company around $443,170 in taxes while producing a local tax benefit of $758,006.
RE-CY was founded in 2011 to run the unprocessed plastic landfill avoidance system for a flexible packaging converter but transformed into a full-scale recycling and manufacturing operation. The company’s principals, Sean Bowie and Stephen Perkins, live in Memphis.
The property the company would acquire at 611 Winchester includes a 233,060-square-foot manufacturing and processing building constructed in 1968. The 20-acre site, which is owned by Atlanta-based Loebox Co., was appraised at $2.1 million, according to the Shelby County Assessor of Property.
Meanwhile, Canadian National Railway Co. is seeking to acquire more land in Frank C. Pidgeon Industrial Park. CN would pay $12,000 an acre for the land, for a total of roughly $228,000.
The Montreal-based company in October exercised an option to buy 95 acres to expand its Intermodal Gateway-Memphis terminal, which it shares with CSX Corp. on Paul Lowry Road.
CN also has an option to buy another roughly 825 acres nearby for a large distribution and logistics park that it will develop with Ridge Property Trust for customers who want to be near the expanded intermodal facility.
CN, capitalizing on the city’s transportation and logistics infrastructure, would double its current intermodal operations and plans for the distribution center call for up to 6 million square feet of industrial space that could employ thousands of people.
The project is a huge boost for Pidgeon, which has tenants that include CN, Electrolux, Tennessee Valley Authority and Nucor Steel. Now, only 150 acres of the 3,500-acre industrial park are uncommitted.
The EDGE board and associated entities will meet Wednesday, June 18, at 3 p.m. at the Better Business Bureau at 3693 Tyndale Dr.