VOL. 128 | NO. 150 | Friday, August 02, 2013
Wright Medical Group Seeks Tax Breaks to Relocate to Memphis
By Amos Maki
Arlington-based Wright Medical Group Inc. is seeking tax freezes to retain 225 jobs, add 35 new jobs and invest $10.6 million into a new headquarters on Cherry Road in East Memphis.
The Economic Development and Growth Engine for Memphis and Shelby County has called a special board meeting Wednesday, Aug. 7, to consider the company’s request for a 15-year payment-in-lieu-of-tax incentive.
EDGE said the project would create $19 million in new tax revenue for Memphis and Shelby County. EDGE said the average salary of the 35 new employees would be $70,000 and the average salary of the 225 retained employees would be $108,000.
The medical device maker said in June, when it announced it was selling its hip- and knee-implants business, OrthoRecon, to a unit of Shanghai-based MicroPort Scientific Corp., that it would remain headquartered in Arlington.
Wright Medical Group is based on Airline Road in Arlington.
(Daily News File)
However, the company said in its application to EDGE that the sale is necessitating the move and that it is including multiple sites for a possible relocation, including out of the state and the wooded office park at 1023 Cherry Road.
The company said barriers to relocating to the Memphis site include “strong” incentives from other states, reduced national air service and local tax burden.
“While the Memphis area is among the short list of locations being considered for the project, there are significant issues in the region,” the company said in its application.
Wright Medical said the relocation would include all of the company’s “core administrative, executive, sales, accounting and research and development functions.” Wright Medical said it would maintain a “reduced manufacturing and distribution presence” in Arlington.
RBM Cherry Road Partners bought the two office buildings and six acres at the 25-acre office campus, called Oaksedge, in January for $4 million, placing it back in the hands of the Martin family.
RBM Cherry Roads Partners vice president Rawleigh Martin, the son of Brad Martin, chairman of private investment firm RBM Venture Co. and interim University of Memphis president, referred questions to a Wright Medical spokesperson.
The Cherry Road campus has had an interesting history.
The Martins, through the entity RBM Cherry Road Partners, originally bought the property in 1999 from Harrah’s.
TIC Cherry Road Investors LLC – a division of Greenville, S.C.-based TIC Properties – bought the two office properties and six acres in 2003 for $18.5 million from RBM Cherry Road. Following TIC Properties’ acquisition, the company sold 25 tenants-in-common shares of varying ownership percentages and prices.
Harrah’s Entertainment vacated the Cherry Road buildings and a Ridge Lake Boulevard call center in 2006, when it bought a 285,000-square-foot building in Goodlett Farms.
And in 2009, the property’s ownership group defaulted on a $14 million loan through KeyBank NA dated March 12, 2004.
A single-purpose entity called MLMT 2004-MKB1 1023 Cherry Road LLC, which was related to KeyBank, bought the embattled office property for $6.4 million during a substitute trustee’s sale Oct. 26, 2009, on the steps of the Shelby County Courthouse.
The lender owned the property until RBM Cherry Road Partners bought it in January for a fraction of what it had sold for just a decade earlier.
The compound includes two office buildings that sit on six acres and total nearly 131,000 square feet. Wright Medical said it would lease all of the existing three-story office building designed by architect Francis Mah and possibly a portion of the second office building there. Harrah’s previously had a lease on both buildings, but that expired, which made both buildings 100 percent available.
The Martin family has always owned 19 acres and the residence on the property, using it for their family offices.