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VOL. 130 | NO. 119 | Friday, June 19, 2015

Amos Maki

SEND COMMERCIAL LEASE ANNOUNCEMENTS to Amos Maki, who can be reached at 603-4025 or amos@memphisdailynews.com.

Dayco Wins Tax Break For Distribution Operations

By Amos Maki

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Michigan-based manufacturer Dayco Products Ltd. will consolidate its distribution operations in the Memphis area, but exactly where remains undecided.

“Due to the continued growth in demand for our products and increased product complexity over the past several years, we have committed to this significant capital investment in order to deliver increased value to our customers,” said Ed Rammel, president of the North American and Australian Aftermarket for Dayco, in a company statement.

Rammel’s statement said the company’s distribution center would be located in the “Memphis, Tenn., area.”

On Wednesday, May 17, the city-county Economic Development Growth Engine awarded Dayco 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.

Dayco is a manufacturer of belts and other items for the automotive, industrial and aftermarket sectors. It is seeking to consolidate its North American distribution operations into the new facility, said Edward R. Steele, Dayco’s treasurer and chief tax officer. Steele said Dayco currently has three distribution centers.

The company wants to consolidate several locations into one facility, Steele said during the EDGE meeting, adding that Dayco would operate the distribution center for "10-plus" years.

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.

Cushman & Wakefield/Commercial Advisors is representing Dayco in its search.

• Memphis and Shelby County commercial real estate sales in May were slightly off last year’s pace, according to real estate information company Chandler Reports, www.chandlerreports.com.

The city and county recorded 57 commercial real estate sales in May, down 6.6 percent from 61 commercial sales in May 2014, according to Chandler Reports, a division of The Daily News Publishing Co.

The average commercial sales price in May was $393,146, down from $1.2 million in May 2014. May commercial sales totaled $22.4 million, down from $70.8 million in May 2014.

Revenue and average sales prices were off because there were several large transactions last year – such as the $8.5 million sale of Homer Skelton Wolfchase. There were four sales over $4 million recorded last May and none recorded this May, according to Chandler Reports.

Land sales or agricultural sales led the way in the number of transactions, with 16 sales averaging $184,175. There were 13 retail sales in May averaging $545,077. Chandler recorded six apartment sales averaging $128,083, or $11.90 average price per square foot.

• A Germantown shopping center is now 100 percent leased following a recent transaction.

Salon Dixie recently inked a 1,500-square-foot lease at Germantown Plaza, bringing the retail center on Farmington Boulevard to complete occupancy.

Conner Walker and Carson Claybrook of Cushman & Wakefield/Commercial Advisors represented the landlord, Farmex Rail LLC.

Farmex Rail bought the 138,000-square-foot retail center for $14.4 million in March from an affiliate of Finard Properties.

Other tenants at Germantown Plaza include Hobby Lobby, Bed Bath & Beyond and Papa Murphy’s Pizza.

PROPERTY SALES 37 37 2,656
MORTGAGES 21 21 1,804
BUILDING PERMITS 132 132 5,833
BANKRUPTCIES 61 61 1,054