VOL. 132 | NO. 100 | Friday, May 19, 2017
EDGE to Test Multifamily Tax Abatements
By Patrick Lantrip
The Economic Development Growth Engine of Memphis and Shelby County has approved a trial run of a new payment-in-lieu-of-taxes program aimed at encouraging development of multifamily housing the city of Memphis feels it needs to break free of the cycle of stagnant population growth.
The Economic Development Growth Engine is testing a payment-in-lieu-of-taxes program aimed at promoting the development of new multifamily housing projects. (Daily News File/Andrew J. Breig)
Known as the Residential PILOT, the tax incentive approved Wednesday, May 17, hopes to spur new affordable multifamily housing projects in an effort to attract young professionals to the Bluff City.
“When we created the Community Builder PILOT two years ago, we had a discussion at that time about adding or including residential at that time,” EDGE president and CEO Reid Dulberger said. “The Memphis 3.0 planning process points out that the city needs additional housing across the spectrum.”
The trial program will be limited to 10 projects, at which point the EDGE board and the mayors of Memphis and Shelby County will evaluate the program to determine whether to continue, modify or discontinue it.
If continued, the new program would join EDGE’s five other tax incentive programs.
Market-rate multifamily residential rental projects with a minimum of 25 units are eligible to apply for the program, which would abate 75 percent of city and county property taxes during the term of the PILOT.
Like EDGE’s other PILOT programs, the applicants will be graded on a matrix, where they have the potential to receive up to 15 years of incentives. Applicants are required to spend 25 percent of their hard construction and site work costs with city- or county-certified minority or women business enterprises.
For each project, the developers would have to hold a specific percentage of units for low- to moderate-income individuals or families. Projects with 25 to 50 units would be required to designate 10 percent to this category, while projects with 51 to 75 units would designate 15 percent and projects with 76 or more units would designate 20 percent.
Additionally, applicants with an “extraordinary” number of low- and moderate-income units will be awarded an extra year on their PILOT grading matrix.
EDGE would designate an architect to monitor the development of the project to ensure the developers adhere to the approved plans. It’s the same method EDGE uses to monitor the progress of its Inner City Economic Development (ICED) Loan recipients.
Memphis Mayor Jim Strickland and Shelby County chief administrative officer Harvey Kennedy were on hand at Wednesday’s meeting to endorse the new PILOT program.
“EDGE does a good job of creating jobs, but that’s only part of the growth we need in Memphis,” Strickland said. “We need population growth.”
Since millennials generally prefer to live within urban areas, Strickland said, Memphis needs to do a better job at providing them a place to live.
He added that growth in areas like Downtown and Midtown are strong, and the city needs to spread the wealth.
“We need to become the next ‘it city,’” Strickland said. “Nashville is growing by 81 people a day, and I think that we have that potential.”