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VOL. 130 | NO. 211 | Thursday, October 29, 2015

State Systems Inc. Buys New HQ

By Madeline Faber

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One of the Economic Development Growth Engine’s latest payment-in-lieu-of-taxes recipients is expanding its market footprint and real estate holdings with the recent purchase of seven Memphis properties.

State Systems Inc. was running out of room at its 22,000-square-foot facility at 3755 Cherry Road.

It had acquired two local companies in only a month, Memphis-based ESI Companies Inc., which provides nurse call equipment to hospitals, and Corinth, Miss.-based Ver-Max Inc., a fire protection company. The two acquisitions dovetailed with State Systems’ existing services providing fire protection, cabling, low voltage, cleaning services and safety training to the surrounding Memphis area.

State Systems employs about 125 and expects that number to grow to more than 140 over the next two years.

Its eye turned toward building a new facility in Fayette County to take advantage of low taxes and land costs. But at its Aug. 19 board meeting, EDGE approved a four-year, $140,368 tax break for State Systems to keep its headquarters in Memphis and add 25 new jobs.

The PILOT went toward the acquisition of a 30,000-square-foot property at 1861 Vanderhorn Drive, off Pleasant View Road near Bartlett. State Systems doubled down on its investment and bought all of the surrounding properties for $1.2 million.


On Oct. 20, the Robert G. and Nancy M. McBride Living Trust closed on purchases of 1861 Vanderhorn and 1860 Lundar Street, 1868 Lundar Street, 1876 Lundar Street and 1896 Lundar Street from Marintco Properties LLC for $883,508.

On the same date, it bought 1875 Vanderhorn and 1877 Vanderhorn from Saba Inc. for $366,492.

Performance Contracting Inc. is currently in a lease at 1877 Vanderhorn, just north of State Systems’ new headquarters, and Bob McBride, president of State Systems, sees that continuing.

The other properties will be used for future company expansion, parking and storage.

Marintco is the parent company of Saba, and ESI Cos. is one of its subsidiaries. So, the move to 1861 Vanderhorn in the first quarter of 2016 won’t be much of a transition for the personnel of ESI because it is the site of their former headquarters.

“We’re all together, ESI and State Systems, and as one we will move back to Vanderhorn where they came from, so they’ll be back home,” McBride said.

The future headquarters at 1861 Vanderhorn is half office and half industrial. McBride is planning a $400,000 renovation, but hasn’t named a contractor.

The offices will be modernized and cubicle space will be replaced with private offices. No additional space will be added, and specific work areas in the warehouse will be adapted.

According to the Shelby County Assessor of Property, the warehouse was built in 1981. The building and its 1.4 acres of land are appraised at $1 million.

In conjunction with the sale, the Robert G. and Nancy M. McBride Living Trust filed a $1.6 million mortgage with Triumph Bank for the 1861 Vanderhorn property set to mature Oct. 19, 2030. The EDGE Industrial Development Board of the City of Memphis and Shelby County signed as PILOT lessor.

State Systems made three new hires recently and hopes to add 25 more over the next four years.

Working with ESI’s technology and market strength will allow State Systems to expand into the health care industry.

“It allows us to go into the health care market in a more defined way, in a larger footprint into the market they have,” McBride said.

PROPERTY SALES 64 151 1,493
MORTGAGES 45 105 1,152
BUILDING PERMITS 201 410 3,466