VOL. 126 | NO. 14 | Friday, January 21, 2011
10-Year PILOT Granted to U.S. Foodservice
By Sarah Baker
Memphis is now battling Olive Branch to keep U.S. Foodservice Inc. in Hickory Hill.
The Memphis-Shelby County Industrial Development Board approved a 10-year payment-in-lieu-of-taxes application for an expansion of U.S. Foodservice’s Memphis facility at Wednesday’s board meeting.
The tax break would save the company $6.9 million in city and county taxes.
Rosemont, Ill.-based U.S. Foodservice is a foodservice distributor that started operation in Memphis in 2000 as Alliant Foodservice Inc. It serves restaurants, hotels, hospitals and schools.
U.S. Foodservice plans to buy the warehouse it now leases at 5900 E. Homes Road and pump $30.8 million total capital investment, including real and personal property.
But U.S. Foodservice also has a letter of intent for a facility in Olive Branch and is negotiating to buy it. U.S. Foodservice has received incentive proposals from state and local governments in Mississippi.
“U.S. Foodservice must receive a competitive offer from Memphis and Shelby County in order for the project to remain viable,” according to a company presentation.
The project is combination of a retention of its distribution facility operation in Memphis and an expansion of its current operations.
Since U.S. Foodservice acquired Alliant in 2005, it has maintained operations at its present 165,000-square-foot location in Hickory Hill.
The company also plans to buy adjacent land on Bledsoe Road and Grocery Road to build a 385,000-square-foot vehicle maintenance and fueling facility.
Lodie Biggs, shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz PC, said while the company is requesting a total four-year ramp up period, the decision must be made now.
The company has amended its application after seeking a seven-year, $14.3 million PILOT at the IDB’s Dec. 10 meeting.
“We really hope you stay,” said Jill Inglehart, chairperson of IDB.
A total of 221 jobs will be retained, with 60 new jobs created. The annual average wage for all jobs is $50,389 before benefits and bonuses.
U.S. Foodservice’s operations would generate $11.9 million in local taxes, with a 1.72-to-1 benefit to cost ratio. Restaurant supplies will also bring in additional sales tax revenue that is not factored into the projected total.
The company’s annual revenue approaches $20 billion, with more than 24,000 associates across 37 states. U.S. Foodservice’s individual facility life span is between 20 and 30 years.