VOL. 132 | NO. 80 | Friday, April 21, 2017
EDGE Board Approves Two PILOTs, GMACW Merger
By Patrick Lantrip
The Economic Development Growth Engine for Memphis and Shelby County on Wednesday, April 19, granted tax abatements for a pair of companies with capital investment plans totaling $34 million and approved a resolution that allows the Greater Memphis Alliance for a Competitive Workforce to merge into EDGE.
Ebrofrost North America, the U.S. arm of Ebrofrost Holding GmbH, was awarded a seven-year Jobs PILOT (payment-in-lieu-of-taxes) that would create 16 net new jobs and $26 million in capital investment in a South Memphis facility.
Of the $26 million, Ebrofrost plans on investing $7 million to renovate 38,086 square feet of an existing 85,021-square-foot building at 2360 Prospect St., $3.8 million to add an 18,714-square-foot warehouse to the building and $13.8 million for new personal property.
Ebrofrost, which is the largest rice manufacturer and second-largest pasta manufacturer in the world, plans on building a facility that will process and distribute individually quick frozen (IQF) rice, pasta and grain products and will be similar to the company’s European factories.
When completed, the facility will be able to produce up to seven tons of frozen ready-to-eat product per hour, 275,000 pounds per day and 70 million pounds per year.
The German company has partnered with Riviana Foods, the largest processor, marketer and distributor of branded and private-label rice products in the U.S., which will own the property and lease it to Ebrofrost.
The 16 net new jobs will have an average base salary of $48,477, excluding overtime and benefits.
As per the terms of the PILOT, Ebrofrost is required to spend at least $3 million of its investment with certified minority and locally owned businesses.
EDGE estimates that a total of $1.5 million in local tax revenue will be generated by the PILOT across its seven-year term.
“Contrary to what you may read in the media about giveaways, we’re going to triple our property taxes,” EDGE board chairman Al Bright Jr. said prior to his vote. “In my mind that’s a positive on all fronts.”
Nucor Steel Memphis Inc., meanwhile, was awarded a five-year Jobs PILOT that will allow the company to make $8.1 million in capital investments and create 15 net new jobs with an average base salary of $56,333 excluding benefits.
Of the $8.1 million, Nucor plans to spend $6.1 million on furniture and equipment, $1.4 million to buy a facility at 2315 Pier St. on Presidents Island and $300,000 to purchase additional land.
Nucor plans to use the 106,853-square-foot Pier Street facility to bore, cut-to-length, polish, grind, turn and straighten steel – operations that are currently outsourced to businesses outside Shelby County.
Per the terms of its PILOT, Nucor must spend at least $133,963 of its investment with certified locally owned businesses. EDGE projects $595,493 in local tax revenue will be generated across the PILOT’s five-year term.
Nucor was given a two-year ramp-up period to enact these investments.
Previously, Nucor was awarded three PILOTs between 2006 and 2012, and has exceeded all capital investment requirements and created or retained 425 net new jobs, according its 2016 annual report filed with EDGE.
In addition to the two tax abatements, EDGE also approved a resolution that will allow the Greater Memphis Alliance for a Competitive Workforce to merge with the economic development board and operate under its umbrella.
GMACWorkforce, which was created three years ago as part of a regional economic development plan, will become one of several entities managed and supported by EDGE, including the Memphis & Shelby County Port Commission, the Depot Redevelopment Corp. and Foreign Trade Zone 77, among others.
Since GMACWorkforce’s mission was to close the skills gap through training and education programs to meet employers’ long-term skill requirements and EDGE’s function is primarily driven by job creation and retention, both organizations felt the merger was a natural fit.
A three- to nine-person board will be appointed to monitor the newly acquired entity, with Jack Moore acting as chairman and Tom Dyer and Cary Vaughn serving as its initial board members. EDGE president and CEO Reid Dulberger, who is an ex-officio member of the GMACWorkforce, will assume the title of its president.
“More and more economic development becomes dependent upon the availability of workforce,” Dulberger said. “If our citizens are not trained for the jobs we are able to provide to the community, their quality of life is severely impacted. As an economic development organization trying hard to fulfill our mission of growing the economy of Memphis and Shelby County, we are largely dependent on the success of our workforce market. If we can strengthen this partner, we’re really helping our core mission.”