Sedgwick seeks incentive to stay
Company says it ‘prefers to locate in Memphis’
Memphis-based company Sedgwick has applied for tax abatement for a new headquarters campus at Southwind, off Hacks Cross Road in southeast Memphis.
The global claims management services provider says it needs incentives to stay in Memphis rather than choosing among other cities where it has major offices. It plans to renovate a 245,808-squarefoot building at 8155 T&B Blvd., headquarters of electrical component manufacturer Thomas & Betts.
Thomas & Betts is scouting the Memphis area for a new location for about 300 employees.
“We are in a search in the Memphis area,’’ said Craig Edlin, marketing and communications manager for the company. “We don’t have anything selected yet. We’re definitely going to be staying in the Memphis area.’’
Sedgwick has applied for a partial freeze on property taxes from the Economic Development Growth Engine of Memphis and Shelby County. A special meeting of the EDGE board has been called for Friday to consider the request.
Sedgwick also is asking for an $18.1 million Community Reinvestment Credit. The Tennessee Department of Economic and Community Development anticipates giving Sedgwick an economic development grant. Details won’t be made public until a contract is executed, a department spokeswoman said.
The expansion would add a net 130 jobs, concentrating about 1,000 workers at a corporate headquarters and research and development facility.
Sedgwick Claims Management Services Inc. proposes to vacate its headquarters at 1100 Ridgeway Loop, where it has been an anchor tenant since 2001, and a second location on Thousand Oaks Boulevard off American Way.
The tax freeze, known as a payment in lieu of taxes, would save Sedgwick an estimated $10.4 million over 15 years. The EDGE staff projected that $72.3 million in local tax revenues would be generated by the project over the PILOT term.
Staff analysis shows an average weighted base salary of $63,872. During
Monday’s announcement of Sedgwick’s expansion plan, local and state officials highlighted the project’s potential to enhance Tennessee’s reputation for attracting advanced industry jobs.
Sedgwick proposes to invest $10.4 million to renovate the T&B facility and spend $5 million on furniture, fixtures and computer equipment.
Sedgwick’s application says the company could have chosen from other cities where it has a significant presence in employees and real estate, “but it prefers to locate in Memphis.”
It listed Dallas, Chicago, Los Angeles, Atlanta, Portland, Canada and the United Kingdom as potentially favorable locations. The company said it has more employees and real estate in Columbus, Ohio, and the Dallas area than in Memphis.
Southwind gives the company room for growth, with rights to expand on property adjacent to the building. That’s important because the company has grown from 6,500 employees to about 15,000 in the past six years.
Both the Ridgeway Loop building and the Southwind site are Boyle Investment properties.
Sedgwick provides technology-based services including management of workers’ compensation, disability, Family Medical Leave Act, property and specialty claims, managed care, special and forensic investigation, Medicare and OSHA solutions and risk consulting. About 2.6 million claimants a year are served by 275 offices.
Sedgwick is one of Memphis’ biggest private companies, producing more than $1.6 billion in revenue. Its majority shareholder is the New York investment firm KKR. Minority shareowners include Stone Point Capital LLC of Greenwich, Connecticut, and Quebec-based La Caisse de depot et placement du Quebec.
ABB, with headquarters in Zurich, Switzerland, has its U.S. ABB Electrification Products Division headquarters in Memphis. Memphis also is the global headquarters for the Electrification Products Installation Products Business Unit, which includes Thomas & Betts, acquired by ABB in 2012.
Thomas & Betts’ Memphis workforce was informed about the move Monday. Asked about the timetable, Edlin responded, “It’s my understanding we’ll be here through the end of the year, but I don’t have a specific date.”
The leased building is in need of a number of repairs and improvements, and Thomas & Betts chose not to renew its lease.
The Memphis-based office heads the Thomas & Betts division that provides electrical controls such as circuit breakers, conduits and cable ties. “All the accessories to wire up a building or for control panels,’’ Edlin said.
Contact reporter Wayne Risher at 901529-2874 or wayne.risher@commercialappeal.com.
Reporter Tom Bailey contributed to this story.