VOL. 130 | NO. 160 | Tuesday, August 18, 2015
Developers Seek $24.4 Million Tax Break for Mall Site
By Bill Dries
The owners of the former Mall of Memphis property are seeking a 15-year tax break for a $112.7 million “Aerotropolis development.”
Former Mall of Memphis site
Huntington Industrial Partners of Atlanta and Johnson Development Associates Inc. of Spartanburg, S.C., have applied for the payment-in-lieu-of-taxes, or PILOT, agreement for a speculative industrial building on the 113-acre site at American Way and Perkins Road.
The developers would save $24.4 million in taxes.
The application to the city-county Economic Development Growth Engine is scheduled for presentation to the EDGE board Wednesday, Aug. 19.
The application notes that Johnson has spent several years seeking build-to-suit tenants for the site
“But despite consistent feedback about the benefits of the Project Site’s location, the site has consistently lost out to North Mississippi based on the predictability of incentives and the resulting lower operating costs,” the application reads. “There is an opportunity to pre-empt further speculative building in North Mississippi by announcing Phase I of the Project before Sept. 1.”
The developers say in their application that they want to be under construction by late summer or early fall of this year.
The general aerotropolis concept is an attempt to plan commercial and residential development with Memphis International Airport at its center. The radius of the concept is so broad that it not only covers most of Memphis but ventures into North Mississippi in some versions of the idea.
Johnson bought the site in 2012 shortly after the mall was demolished.
Phase one of the project would encompass a single 420,380-square-foot building.
The larger proposal is to build five buildings totaling 1.1 million square feet for a number of uses, including distribution, warehousing, manufacturing, office or call center operations.
Younger Associates, who analyzed the application for EDGE, reported the project is not typical for the developments that seek the tax incentives. Most are for a “specific business operation” where details such as property investment, jobs and pay are known.
“With the Aerotropolis project, the buildings do not have pre-determined tenants, so the exact uses and operations within the buildings are not known,” the analysis adds. “To calculate the resulting economic impact of the proposed development, we developed a set of assumptions about potential operations.”
The assumptions include an estimated 851 jobs with an annual average wage of $60,594.