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VOL. 133 | NO. 28 | Wednesday, February 7, 2018

Bill Introduced to Expand EDGE’s Residential PILOT Boundaries

By Patrick Lantrip

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In an effort to encourage residential infill and density beyond the confines of Downtown and Midtown, new legislation is making its way through the Tennessee Senate and House of Representatives that would allow Shelby County to offer tax incentives to multifamily and hotel developers outside of the central business district.

State Sen. Brian Kelsey of Germantown and state Rep. Kevin Vaughan are sponsoring the bill (SB 1736 and HB 2064, respectively) that would amend a provision in Tennessee Code Annotated that restricts economic development corporations, such as the Economic Development Growth Engine for Memphis and Shelby County, from offering tax incentives to anyone beyond the central business district, which is essentially bound by the Parkways.

“This bill will allow EDGE to grant PILOTs (payments-in-lieu-of-taxes) to apartment and hotel developments in Shelby County outside the center city district,” Kelsey said. “We’re hoping that this bill will allow for the development of areas that are currently blighted properties in the city.”

Kelsey said he and Vaughan, who represents Collierville, are sponsoring the bill at the request of both Memphis Mayor Jim Strickland and Shelby County Mayor Mark Luttrell.

State Sen. Senator Brian Kelsey and state Rep. Kevin Vaughn are sponsoring a bill that would amend a provision in the Tennessee Code Annotated that restricts economic development corporations from offering tax incentives to anyone beyond a central business district.

(Daily News File/Houston Cofield)

“They feel that PILOTs have been a helpful incentive for development in the center city area and that we should expand that ability to areas outside of the center city area,” he said.

The modestly worded bill was just one of roughly 1,500 pieces of legislation that was introduced prior to Feb. 1’s bill signing deadline, but has huge implications for many local developers with plans beyond the Parkways.

As introduced, the bill “authorizes an industrial development corporation to acquire a hotel, motel, or apartment building for a project of the corporation located in a county with a population greater than 900,000.”

This is an amendment to TCA Section 7-53-302, which authorizes an industrial development corporation to temporarily acquire properties as a part of the PILOT process in exchange for metered tax incentives.

However, this provision excludes hotels, motels, and apartment buildings unless they are located in a “center city area or in a central business improvement district.”

Kelsey said he is “cautiously optimistic” that the bill will pass both houses, as he has not heard any pushback since filing the legislation.

Although, he admitted that it is still early in the process.

“This bill is limited to Shelby County in its application, so I’m hopeful that the rest of the state will allow it to go right through,” Kelsey said. “But you never know.”

EDGE’s Residential PILOT program was approved by its board on May 17, 2017, in response to the Memphis 3.0 planning process, which calls for, among other things, increased development density within the city limits.

Strickland and Shelby County chief administrative officer Harvey Kennedy both showed up to that meeting to publicly 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 at the time. “We need population growth.”

Kelsey said if everything goes as planned, the bill would make it through the legislative session roughly by the end of April.

PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
BUILDING PERMITS 158 699 2,751