Fedex to get incentives for moving Downtown
But details about repackage from state still scant
An incentive package for Fedex Logistics’ move to Downtown Memphis will include a clawback provision and accountability standards, Gov. Bill Lee said Tuesday.
Beyond that, details about what incentives could be coming from the state to the company for its move to the former Gibson Guitar Factory building across from the Fedex Forum were scant following Tuesday’s announcement.
The incentive package hasn’t been finalized yet, and when it is, the accountability provisions will be announced “to make certain taxpayers know what they’re getting,” Lee said.
“We will have an accountability and a clawback provision announced when we announce what the incentive package is,” Lee said.
Lee was in Memphis Tuesday for the Fedex Logistics announcement that it will bring 680 jobs to Downtown, which has seen a slew of new economic development announcements recently. It was the new governor’s first big jobs announcement since he was sworn in last month.
“I’m happy it’s in Downtown Memphis,” Lee said.
Fedex will occupy a prominent downtown space, that would “otherwise be an empty building,” Memphis Mayor Jim Strickland said.
Gibson previously sold the building to New York-based investment company Somera Road and announced its plans to move the remaining Memphis guitar production jobs to Nashville.
The shadow of Electrolux
Memphis took a hit on the jobs front last month when Electrolux announced it would close its Memphis plant by the end of next year, eliminating 530 jobs. Electrolux re-
ceived an estimated $188 million in incentives to open the Memphis factory.
A 2010 contract didn’t include a clawback provision and explicitly blocked the involved governments from recouping the incentives they doled out if Electrolux didn’t deliver on 1,240 jobs.
Fedex is seeking a $2 million cost reimbursement grant from the Economic Development Growth Engine for Memphis and Shelby County, which is on the agenda for a special EDGE meeting Thursday.
The EDGE grant, which would go towards building renovation costs, would be part of an incentive package that includes the state, the Downtown Memphis Commission’s Center City Development Corporation and the Center City Revenue Finance Corporation.
Fedex will lease the entire building, and will invest roughly $12 million into interior renovations and other improvements, according to EDGE materials.
An additional $21 million will be spent on construction and shell renovations.
Fedex proposes relocating more than 320 existing employees to the downtown headquarters, and hiring another roughly 340 new employees.
Strickland: ‘No concerns about Fedex’
Details about additional incentives from local governments on the Fedex Logistics project were limited on Tuesday.
Memphis Mayor Jim Strickland has “no concerns about Fedex” when it comes to incentives, he said following Tuesday’s announcement.
The city’s history of giving incentives to Fedex dates back to the 1970s, when the Memphis-shelby County Airport Authority issued bonds and gave the company a low-cost lease for facilities there, Strickland said.
“They were criticized for giving away the store to Fedex,” Strickland said. “Forty years later, 30,000 jobs later, and philanthropic donations to the Fedexforum and the University of Memphis and everything in between, shows that Fedex has Memphis at heart, and I have no doubt about any incentives that are going to Fedex.”
When it comes to recruiting businesses into Memphis, “you have to offer incentives,” said Memphis City Councilman Berlin Boyd, who represents much of downtown.
“Nashville gives incentives. New York gives incentives,” Boyd said. “And I just think it comes with the territory.”
Jamie Munks covers Memphis city government and politics for The Commercial Appeal. She can be reached at jamie.munks@commercialappeal.com. Follow her on Twitter @journo_jamie_.
BRAD VEST / THE COMMERCIAL APPEAL