(Memphis) - International Paper gets the go ahead to move ahead with plans that include forgoing tax payments to city and county government as long as they commit to staying in Memphis. The Board overseeing PILOTS, Payments In Lieu of Taxes, voted unanimously to approve a Pilot plan for IP but with some promises.
The economic development board, EDGE, gave International Paper the green light this afternoon. IP is already a major employer in Memphis. This new project is scheduled to add lots of new construction jobs and hire an additional 101 people. This would bring IP's total employment in Memphis to 2,375 people with average salaries of $160,000.
However, there were questions from board members before the approval about the company's commitment to staying in Memphis.
EDGE Board member, Deidre Malone, says she understands allowing International Paper not to pay taxes for 15 years won't sit well with some small business owners like herself who pay them every year.
"We don't just want to give away taxes but if that means we're going to retain 500 jobs, good paying jobs that are putting money back into our economy, we have to take a serious look at it," said Malone.
The EDGE board unanimously approved extending IP's PILOT program another 15 years. Its company execs say they maxed out space at their headquarters in East Memphis. They're building a brand new 235,000sq ft., 10 story tower near the same location. However, they said they couldn't afford to do it and pay required city and county taxes.
"It was very important that we could find the right balance between what's good for the city and what's good for the company," said Tom Kadien, International Paper.
The city spent millions helping Pinnacle Airlines relocate its headquarters downtown, the company bolted. This Pilot has protections in it for taxpayers and those local people needing work.
"We do have provisions in there in these instruments that protect the taxpayers if a given company does not perform as promised," said. Memphis AC Wharton.
Mayor Luttrell added, "We occasionally have our disappointments with the Pinnacles but its good to have days like this to really balance it."
These high paying jobs are another way Mayor Wharton says the city can recruit some of our college students back to Memphis. At an average salary of $160,000, IP will need a skilled workforce.