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VOL. 129 | NO. 11 | Thursday, January 16, 2014

Smucker Given Amended PILOT to Expand

By Amos Maki

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The incentives Memphis and Shelby County offered J.M. Smucker Co. LLC were sweet enough for the peanut butter and jelly maker to expand its operations in the city.

Smucker plans to invest an extra $41 million to create a state-of-the-art peanut butter production line at 4789 Cromwell Road, pushing the company’s total planned investment to around $96 million.

Though the company’s capital investment plans have grown, it plans on hiring only 42 new employees, down from the 65 new employees it said it planned to hire when it was granted a 12-year payment-in-lieu-of-taxes (PILOT) agreement last year from the Economic Development Growth Engine of Memphis and Shelby County.

But the increase in capital investment was enough for the EDGE board to unanimously grant the company an amended PILOT on Wednesday, Jan. 15, for 15 years on personal property and 13 years on real property.

“It’s saving good jobs that we have, a global brand name, great taxable investments and great tax revenue for the city of Memphis and Shelby County governments, which is much needed,” said EDGE president and CEO Reid Dulburger.

In addition to the 42 new positions, which will have an average wage of $52,545, Smucker will maintain its existing 61 employees.

The tax freeze will save Smucker $13 million, but the company will still pay an estimated $16.2 million in taxes to the city and county over the length of the PILOT. The company said 25 percent of the company’s planned $21.5 million in discretionary spending will be with women- and minority-owned businesses.

“When you see numbers like this, it’s easy to vote ‘yes,’” said EDGE board chairman Al Bright.

Smucker made jams, jellies and syrups at the Memphis plant for years before announcing in 2010 it planned to close the facility. After receiving the PILOT from EDGE in 2013, the company said it would focus on peanut butter production in Memphis and began shifting most of its jam and jelly production to its home base of Ohio.

Smucker said last year that it planned to invest $55 million at the 135,000-square-foot facility, but that number has ballooned to $96 million.

The increased investment will allow Smucker to increase production of the JIF peanut butter brand. Smucker plans on building a new rail spur to help deliver peanuts from all over the country to the Memphis plant.

Aaron Broholm, director of state and local taxes for Smucker, said the Ohio-based company will continue to produce the Smucker’s brand of jelly at 4740 Burbank Road, just across Edison Road from the peanut butter facility.

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