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VOL. 125 | NO. 50 | Monday, March 15, 2010

AEL Files Permit for Century Center Facility

By Eric Smith

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Rendering courtesy of Evans Taylor Foster Childress Architects

American Esoteric Laboratories has taken another step toward building a $14.3 million lab and headquarters for its Mid-South division.

AEL, a regional provider of clinical laboratory services to physicians and hospitals, last week filed a $9.2 million permit to build a one-story, 70,000-square-foot facility at 1701 Century Center Parkway near the junction of Interstate 40 and Whitten Road.

The company this week expects to close on a roughly 10-acre parcel of land from Boyle Investment Co., spending “plus or minus $2 million” on the property, said AEL president John Mazzei.

AEL, a division of Sonic Healthcare USA, has local roots that date back a half-century with the founding of Memphis Pathology Laboratory. That company was bought by AEL in 2007.

The company now will begin a new chapter by consolidating its existing 33,000-square-foot building on Distribution Drive and 10,000-square-foot administrative office near Covington Pike, moving its entire Mid-South division into one space.

Location is key

Mazzei said this spot is perfect for the company because it offers a host of benefits, most notably proximity to the interstate. The company currently is 15 or 20 minutes off the highway, making deliveries to and from its numerous markets more time-consuming.

“Our business is as much logistics as it is diagnostic testing,” he said. “That location where it is off of Interstate 40 is an optimum location for driving. Whether we’re coming from the east or coming from the south, it’s a quick off at Whitten Road to Century Center and it’s less than a 90-second drive.”

Not only is the Century Center Parkway centrally located to highway infrastructure, but it allows easy access to AEL’s biggest customers, doctors and hospitals that use the company’s diagnostic services such as hematology, immunology and toxicology.

“It puts us at the center of where our customer base is,” Mazzei said.

The location offers an enhanced business climate and easier access for its 450 employees. Mazzei said it also should help attract new employees, retain existing employees and be close to restaurants.

“And it keeps us in Memphis,” he added. “That was important because we have 45 years in Memphis, so it contributed to the decision.”

Rusty Foster of Memphis-based Evans Taylor Foster Childress Architects is the architect of record for the project. Atlanta-based IDI, which has an office in Memphis, is the contractor.

Jeb Fields of Commercial Advisors represented AEL in its site selection. He said the location perfectly complements the company’s needs.

“The centralized location allows for increased operational efficiency and satisfies their long-term growth needs,” Fields said. “It allows AEL to remain in the Memphis market, continue to grow, prosper and create jobs.”

Not only that, but the arrival of AEL should bode well for that entire area with the prospect of more companies investing in commercial real estate there.

”There is no doubt AEL’s presence will have a positive impact on this submarket,” Fields said. “AEL is another high-profile company to realize the benefits of this location. I would expect more companies to take notice as this submarket continues to mature.


AEL’s plans for the project have been public ever since the company applied for and won a six-year payment-in-lieu-of-taxes (PILOT) award from the city-county Industrial Development Board last fall.

Now, the company is “getting close to moving dirt,” Mazzei said. The planned development plat that Boyle filed was approved by the City Council, and now must be recorded before site work can begin.

Mazzei said if the weather cooperates and all the building materials are available, then construction should take about six months. His hope is for the employees to move into the new facility around Nov. 1.

Under the existing PILOT agreement, AEL will add about 60 jobs – over the six-year span of the program – to its current work force of about 450, with an annual average wage of $44,377, including benefits.

But Mazzei said the company is considering turning down the PILOT if it doesn’t make financial sense.

“We’ve stayed focused on getting the building up and getting the design done,” he said. “We’ll go back to the PILOT and re-evaluate it. The biggest thing about PILOTs is that it’s easy to forecast and estimate what you’re going to do, but you then have to understand that you’re committed to those.

“We’re going to focus and make sure we can deliver on the PILOT.”

Also, the PILOT called for an investment of $14.3 million, and Mazzei said that number is going to be higher than $14 million based on the coming land acquisition and capital investment of new equipment for the facility. For example, a state-of-the-art generator that can keep the building running 24/7 would cost $700,000.

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