VOL. 126 | NO. 244 | Thursday, December 15, 2011
Valero Planning $298M Investment in Memphis
By Andy Meek
Two Memphis companies will ask for tax breaks at next week’s meeting of the Memphis-Shelby County EDGE Board to help them keep and make new investments in their local operations.
The board meets Wed., Dec. 21, at the Crescent Center, 6075 Poplar, at 3:00 p.m.
Valero Energy is seeking a 15-year payment-in-lieu-of-taxes (PILOT) for its Memphis refinery at 543 West Mallory Ave. to go along with planned investments and upgrades at the facility totaling more than $298 million over the next 5 years.
The tax freeze, which would enable Valero to retain 305 jobs here, would save the company almost $26 million in local taxes. But during the PILOT period, the company would still generate $54 million in revenue for the city and county, according to Valero’s PILOT application.
Since Valero acquired the Memphis refinery from Premcor in 2005, Valero has invested more than $254 million in it already. The company says it has to continually reinvest in new personal property and equipment because of the technology-intensive nature of its business and the age of the Memphis plant.
Valero serves as a key source of refined petroleum for both the region as well as Memphis International Airport.
Meanwhile, AB Mauri Fleischmann’s will be applying for a 9-year PILOT from the EDGE Board next week
ABMF, which has operated a manufacturing facility in Memphis for more than 20 years, manufactures and sells fresh, instant and active dry yeast and other bakery ingredients.
In its PILOT application, ABMF said that “to have its operating costs approximate those of its competition, ABMF’s Memphis facility would have to reduce its operating costs in Memphis significantly.”
It has on the drawing board a planned $16.5 million investment at its Memphis plant. Part of the problem, though, is that two of the company’s main reasons for choosing Memphis 20 years ago aren’t valid anymore.
Back then, the company picked Memphis because of the river and barge access and low water treatment/effluent costs afforded by its site. Since then, a shift from materials delivered by barge to those usually delivered by rail or tanker, plus rising water treatment/effluent costs, mean “these two factors no longer favor a Memphis location for fresh yeast production.”
ABMF’s PILOT for its facility at 2743 Riverport Road would save the company a little more than $854,000 in taxes. During that time, ABMF would generate almost $3 million in revenue for the city and county. ABMF anticipates creating 5 new jobs and retaining 47 as a result of the PILOT.