VOL. 130 | NO. 123 | Thursday, June 25, 2015
Nike Formally Opens $301 Million Frayser Expansion
By Bill Dries
Nike executives are in Memphis Friday for the formal opening of the $301 million expansion of the sports shoe and apparel company’s Frayser distribution center.
(Daily News/Andrew Brieg)
Executives of Nike Inc. are in Memphis Friday, June 26, to formally open the $301 million expansion of the sports shoe and apparel giant’s Northridge distribution center at 3100 New Frayser Boulevard.
Announced in late 2012, the addition to Nike’s original 1.1 million-square-foot facility at New Allen Road and New Frayser Boulevard was an economic development plum that Memphis leaders had to compete for.
Tennessee Gov. Bill Haslam will attend Friday’s opening ceremony in Frayser.
The city’s pursuit of the project that makes Northridge the North American distribution center for all goods bearing the famous Nike swoosh was code-named Project Victory.
The expansion, which moves Nike out of leased space at 8400 Winchester Road, is on 200 acres of land north of the original plant that Nike bought in January 2013 from Belz Investco GP.
The expansion will create 250 new jobs and retain 1,600 existing jobs. It makes up the largest workforce Nike has in the U.S. outside of its Beaverton, Ore., headquarters.
At $301 million, the expansion is larger, in terms of investment, than other major projects in recent memory. FedExForum was a $250 million project while the Electrolux Major Appliances North American plant in the Frank C. Pidgeon Industrial Park that opened in 2014 represented a $266 million investment. The nearby Mitsubishi Electric Power Products Inc. plant that opened in 2013 was a $200 million plant.
By the end of 2012, Nike had a 15-year payment-in-lieu-of taxes agreement with the Memphis and Shelby County Economic Development Growth Engine for the expansion that saves the company $57.8 million in taxes over the term.
The company describes the expansion as “a centralized multi-product engine for wholesale and retail distribution.” It also includes room for future capacity.
Nike arrived in Frayser in 2007 with its second Memphis-area distribution operation; it already had the Winchester Road center. The company set a goal in 2006 of combining the footwear distribution center on Winchester and one in Wilsonville, Ore., based on a business analysis that showed Nike could realize cost efficiencies of more than $200 million. Nike executives said at the time that they planned to locate that combined center somewhere in the Memphis area.
Nick Athanasakos, the vice president of Nike’s U.S. supply chain, said at the time that Memphis would get the new plant because not to do that “would jeopardize our future growth plans for the entire business.”
The Northridge plant opened on long-open land where Frayser meets Raleigh just as the already economically devastated area was pummeled again by the recession and the housing foreclosure crisis in particular.