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VOL. 130 | NO. 118 | Thursday, June 18, 2015

Dayco Awarded Tax Incentive for Memphis Warehouse

By Amos Maki

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A Michigan-based manufacturer of belts and other items for the automotive, industrial and aftermarket sectors has been awarded a tax break to open a national distribution center in Memphis.

The city-county Economic Development Growth Engine awarded Dayco Products Ltd. a five-year tax incentive for the distribution center, which will employ 174 workers. The average annual pay for employees would be $26,753, plus benefits.

The company is also considering St. Louis, Louisville, Ky., Indianapolis, Nashville, Southaven and Byhalia.

Dayco is seeking to consolidate its North American distribution operations into the new facility, said Edward R. Steele, treasurer and chief tax officer for Dayco. Steele said Dayco currently has three distribution centers.

"The company wants to consolidate several locations into one location in Tennessee or adjoining states," Steele said.

If Memphis is selected, Dayco would operate the distribution center for "10-plus" years, Steele said.

Dayco is considering two locations for the 400,000-square-foot Memphis distribution center: Centerpoint III at 3530 E. Raines Road and 4755 Southpoint Drive.

A five-year payment-in-lieu-of-taxes agreement would save the company around $1.2 million at the Raines Road site while producing roughly $3.6 million in new tax revenue, or $3.08 for every $1 abated. The PILOT would save the company roughly $1.3 million at the Southpoint site while generating roughly $3.6 million in new tax revenue, a return of $2.72 for every $1 abated.

Steele said Dayco is still in the evaluation process but hopes to make a site selection in the next 30 days.

"We need to consolidate and get all the employees hired," Steele said.

Dayco is a global leader in the research, design, manufacturing and distribution of a broad range of belts, tensioners and hydraulics equipment for the automotive, industrial and aftermarket end markets. The company has annual sales of over $1 billion and employs 4,500 people worldwide.

"This is a great opportunity for Memphis and Shelby County," said EDGE president Reid Dulberger.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 56 289 2,908
MORTGAGES 55 226 2,009
FORECLOSURE NOTICES 14 51 326
BUILDING PERMITS 108 1,002 6,703
BANKRUPTCIES 42 248 1,225
BUSINESS LICENSES 0 115 606
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0