MEMPHIS, Tenn. — FedEx Logistics will receive more than $30 million in PILOTs and grants to move it headquarters downtown after two votes Thursday.
The Memphis company says it’s making nearly a $48 million investment, providing more jobs and providing millions in tax revenue as well as the company remodels the former Gibson guitar factory and moves employees downtown from their East Memphis offices.
Thursday, the Memphis Center City Revenue Finance Corporation approved a PILOT agreement, and the Memphis Center City Development Corporation signed off on a $1 million grant.
That afternoon the Economic Development Growth Engine for Memphis and Shelby County approved a $2 million dollar cost reimbursement grant after improvements at the former Gibson site are complete.
“It is absolutely critical and a huge opportunity for our team members to have the identity of a strong global headquarters,” Bill Willard, senior vice president with FedEx Logistics, said in a statement.
“We’ve been scattered across multiple offices for several years. The opportunity to collaborate and operate all under one roof in Downtown Memphis will help with both recruitment and retention of team members.”
The total incentive package is worth $34 million.
A representative with the Downtown Memphis Commission said the hypothetical tax savings for the company on its new building is approximately $28 million, though that number could change based on reappraisals. However, the DMC said the city and county will receive an added $7.5 million in property tax revenues over 20 years vs. if the building sat empty for several year. Plus, there is the added economic benefit of more than 600 workers downtown.
FedEx officials say they plan to relocate 323 current jobs to the location, hiring 339 more for a total of 662 employees eventually in the building. The average salary will come in at $80,000, which they say will generate more than $40 million in tax revenue.
“Memphis is home for us and we’re very proud of that and we’re really excited and thrilled to be part of this revitalization of downtown,” said Rachel Simmons, managing director of communications for FedEx.
As far as those concerned why such a large company is looking for public dollar incentives, a FedEx spokesperson says they’re going to look at decisions that make financial sense for them.
“For any type of project of this nature we explore all state and local incentives that are available,” Simmons said. “We want to make sure that we’re providing returns back to our share owners and our constituents so it’s good business for us to explore what opportunities are available.”
They say it’s a big undertaking to revitalize the spot from a guitar manufacturer to a class A office space.
Now that they’ve checked the boxes on local incentives, they move on to gaining state incentives.