Tech expansion could bring 561 jobs to Memphis
Bioscience supplier applies for tax break
A Memphis bioscience supplier has applied for a $52 million PILOT tax break to support an expansion that would add 561 jobs through 2023.
Cognate Bioservices, a cellular therapies manufacturer, would build offices, distribution space and cleanroom manufacturing cells at its 4600 E. Shelby Drive headquarters and two nearby locations.
Cognate’s application will be considered by the EDGE board, a city-county economic development agency, at its virtual session Wednesday. PILOT tax cuts are geared to retaining jobs or recruiting firms considering other locations. Cognate says Baltimore and Dallas are in contention for the project.
In its application, the company says: “Cognate is faced with long-term strategic decisions relating to where it should locate and activate increased manufacturing capacity in the coming years. Memphis is in competition with other cities for the Project including Baltimore, Maryland, and Dallas, Texas.”
Cognate currently employs 287 people in Memphis. The new jobs would have an average annual wage of $63,749, per the EDGE application summary.
Memphis Mayor Jim Strickland welcomed the deal, saying in his weekly Friday e-mail message to citizens: “This is great news during a year when we haven’t had enough of it to share. I’m excited about this project and what those jobs and investment will mean for Memphis.”
Strickland’s e-mail noted the three sites “proposed for this project currently produce around $524,000 in City of Memphis and Shelby County property taxes each year.
The estimated annual property taxes will be nearly $1.18 million during the PILOT term and $4.4 million afterwards.”
The 15-year tax break would cut taxes by $52 million but not entirely limit all taxes owed.
Over the life of the tax break the company and its employees would pay an estimated $65 million in taxes, according to the application.
Cognate was founded in Baltimore in 2002, acquired a plant in Memphis several years later and established its headquarters here.
Top executives led a management buyout and early this year secured new capital investment.
In August, J. Kelly Ganjei, chief executive of Cognate, was named an Entrepreneur Of The Year 2020 Southeast Award finalist by the consulting firm Ernst & Young LLP.
Securing the new investment in January opened way for the current expansion plans totaling $212.8 million.
The expansion includes new manufacturing space at 4600 E. Shelby, warehouses at 5780 E. Shelby, and installing manufacturing and clean-cells in existing 122,580-square foot building at 6100 Global Drive.
Cognate’s application credits its clients with driving the increase in new business.
The application says: “Cognate has played an important role in helping shepherd products from early clinical stage through the clinical trial process required to satisfy the FDA and, ultimately, get a drug to market.
“Cognate’s clients are working on a variety of novel therapies. Cognate’s clients include Atara Biotherapeutics, Inc., a developer of a therapeutic product designed to treat Epstein Barr virus.”