VOL. 131 | NO. 121 | Friday, June 17, 2016
EDGE Grants Incentives for TAG Truck Center, Turner Dairy
By Madeline Faber
Two longtime Memphis-area companies secured tax incentives at the June meeting of the Memphis-Shelby County Economic Development Growth Engine.
Vacant since the Mall of Memphis was demolished in 2004, part of the 113-acre parcel will house a trucking facility thanks to a tax incentive from EDGE.
(Daily News File/Andrew J. Breig)
The payment-in-lieu-of-taxes will support TAG Truck Enterprises LLC’s plans for the former Mall of Memphis site as well as an expansion of Turner Dairy in the heart of Midtown.
Turner Holdings LLC has operated Turner Dairy for decades at 2040 Madison Ave., just west of Overton Square. With the area recently invigorated with restaurants, retail and entertainment options, several developers have turned their eye to Turner Dairy’s 6.6-acre parcel.
One of those developers, George Cates, the retired founder of real estate investment trust MAA, spoke at the EDGE meeting in favor of delaying a vote.
“It’s a great site,” he said. “It would have great value for other uses, higher and better uses, than an industrial site. A hotel, retail, apartments, mixed use, I don’t know. It would need study.”
Cates added that he’s confident any of those uses would generate far more than the 25 jobs Turner’s expansion would create, and the resulting taxes to the city and county would be substantially greater.”
The Turner Dairy property was most recently appraised at $1.6 million. Cates said that it could be sold for a much greater amount.
EDGE chairman Al Bright said he received several emails and calls from neighbors and developers about the Turner Dairy property. He voted in favoring of postponing a vote to give neighborhood groups a greater opportunity to speak about the project.
“My concern is we're getting a little more pushback that we're normally not accustomed to,” said Tom Dyer, EDGE board member. The board typically grants incentives for projects that are in exiting industrial areas, he added. Turner Dairy is nestled in a dense residential and commercial neighborhood.
EDGE board member Charles Goforth said that the Memphis-Shelby County Office of Planning and Development promotes areas that have a mix of uses. When the Unified Development Code was adopted in 2011, it even established a special zoning for mixed-use districts.
“The new UDC promotes industrial and the commercial and residential side-by-side,” Goforth said. “I think it makes sense.”
The board asked Turner Dairy president Jim Turner if he had considered relocating. Turner estimated that a relocation “from scratch” would cost $30 million, which he said is cost-prohibitive.
In its application, Turner Dairy stated that it was weighing an incentive package from DeSoto County to relocate the dairy across state borders, but Mississippi interest was not brought up during the board meeting.
Aside from Bright, the 11-member EDGE board voted in favor of the PILOT, and it passed.
Turner Holdings LLC received a seven-year abatement in personal and property taxes worth $1.1 million. The tax incentive will support a 17,700-square-foot addition to Turner’s refrigerated warehouse at 2040 Madison. The dairy company plans to update its existing equipment and add more processing equipment, including a corrugated packaging line, for a total capital investment of $8.8 million.
Meanwhile, Memphis-based TAG Truck Enterprises LLC, which operates TAG Truck Center and received a 12-year PILOT to build a $28 million trucking facility on the site of the old Mall of Memphis property. TAG Truck Center manages truck fleets for major Memphis companies such as AutoZone, FedEx Freight and FedEx Express.
The 113-acre parcel has been under question since the mall was demolished in 2004.
At one point, Wal-Mart had expressed interest in building a supercenter on the property. Most recently, Huntington Industrial Partners and Johnson Development Associates had planned a $112.7 million speculative industrial park for the site, a plan that hinged on a 15-year tax break from EDGE. Last September, the EDGE board tabled its vote for the second time in a row, effectively sending the message that the developers were not going to receive the PILOT.
In late 2015, Johnson Development Associates sold the Mall of Memphis land to TAG Real Estate Holdings LLC, an affiliate of TAG Truck Center.
With the tax incentive, TAG will consolidate its five facilities across Tennessee and West Memphis to the Mall of Memphis site at the corner of American Way and I-240.
TAG will only use 34 of the site’s 113 acres to construct a new 182,795-square-foot facility. The remaining acres will be likely sold or leased to businesses that complement the project, according to TAG’s application.
The move will create 62 jobs and retain 131 jobs with an average wage of $54,700. It also plans to construct a training facility called the TAG Technical Institute to train truck mechanics. Bringing the vacant land back into productive use will bring $11.6 million in total tax revenues, EDGE staff projects.