VOL. 7 | NO. 51 | Saturday, December 13, 2014
Target, Cummins Seek 15-Year Tax Breaks
By Amos Maki
Memphis and Shelby County are offering generous tax incentives to attract and retain hundreds of jobs.
Discount retailer Target and Cummins Inc. are seeking tax breaks for projects that total 1,429 jobs.
Target could receive a 15-year payment-in-lieu-of-tax abatement, or PILOT, for a $52 million online fulfillment center that will employ 462 people. The PILOT would save Target around $12 million over 15 years while producing a local tax benefit of $27.2 million, according to the city-county Economic Development Growth Engine. The average annual wage for the jobs would be $28,456.
Target announced Thursday, Dec. 11, that it plans on leasing the 900,000-square-foot building at 5461 Davidson Road in Southeast Memphis for the fulfillment center.
In its PILOT application the Minneapolis-based retailer said it was considering the Memphis site and one in Olive Branch, Miss., for its southeastern U.S. fulfillment center, one of three new centers the company plans on opening in 2015. Target said the PILOT was “key to the success” of the proposed project.
Cummins also could receive a 15-year PILOT to retain 897 local jobs and create 70 new jobs. The PILOT would save the company $12.9 million while producing a local tax benefit of $59.6 million.
Cummins plans on expanding its current distribution operations into a 400,000-square-foot building at 5800 Challenge Drive, which is just across Challenge Drive from the existing Cummins distribution facility, 4155 Quest Way, and is currently occupied by Stein World.
In its PILOT application, Cummins said the landlord for the two buildings, ProLogis, would invest around $6.4 million in the two buildings and Cummins would invest $3 million. The company said it was “considering expanding in Memphis or relocating operations to the state of Mississippi.”
The EDGE board will vote on the incentive packages Wednesday, Dec. 17.