EDGE Retention PILOT Profiles (A Memphis Tomorrow Bi-Product)

EDGE and its job retention/expansion Payment-In-Lieu-Of-Taxes (PILOT) program is part of the largely taxpayer funded Memphis Tomorrow Executive Committee Fast Forward initiative. Overall, when accompanied with below peer average economic growth and based on quantitative analysis when considering the economic impact of capital investment, the retention component of the retention/expansion PILOT program, over time, appears to have served as a community disinvestment program at the expense of Memphis/Shelby County small business development, the business community and the community as a whole. The graph to the right cansbv2 be enlarged by clicking the image. Grades throughout this site are not a grading of companies but are grades for the retention / expansion PILOTS as supported by Memphis local economic development policy. Just below are assigned summary grades and costs of the EDGE retention/expansion PILOT program:

  • Retention/Expansion PILOT Program Grade: F
  • Community Ecosystem of Tomorrow Vision Grade: F
  • Overall Business Community Benefit Grade: F
  • Memphis/Shelby County Estimated Taxpayer Loss: $267.6M
  • Memphis/Shelby County Estimated Annual Taxpayer Loss: $18.8M
  • EDGE Overstated Total New Tax Revenue Generated: $885M

EDGE Retention PILOT Capital Investment Category Summaries and Grades

Grades for individual company profiles may differ from that of the capital investment category grade below. To access individual category and company profiles, click the hyperlinks below for the associated capital investment category. Within the company profiles a more complete and responsible accounting methodology is employed in addition to the EDGE economic modeling to more effectively estimate Memphis/Shelby County taxpayer impact of the retention/expansion PILOT program. The formula for those calculations is disclosed within the category pages with 19 company retention/expansion profiles provided.  Current EDGE economic impact modeling for “total new tax revenue generated” effectively makes the following assumptions: 1)  100% of the 19 retention/expansion companies and their associated direct and indirect jobs will leave Memphis/Shelby County without a  tax abatement for existing jobs directly employed by company PILOT beneficiary and 2) that there is not a forgone economic impact / tax revenue loss if retention tax abatement proceeds were otherwise invested directly into jobs/resources such as public safety, education and public transit that directly serve the community ecosystem. The profiles exclude expansion PILOTS which are locally needed for new job creation and industry recruitment. The below analysis will show that some of the retention/expansion PILOTS have merit while none of them generate the new tax revenue as reported by EDGE. See below MCCL authored capital investment categories for EDGE retention / expansion PILOTS:

NOTICE: CRITICAL FEEDBACK, QUESTIONS OR SUGGESTED CORRECTIONS IS WANTED AND NEEDED VIA EMAIL OR COMMENT

Existing Facility and Consolidation in Shelby County Capital Investment – Grade A+ 

  • Company: Evergreen (1)
  • Taxpayer Gain: $400k
  • Annual Taxpayer Gain: $26k
  • Overstated EDGE revenue generated: $6M

Existing Facility Capital Investment – Grade F

  • Companies:  AB Mauri, FedEx, Pfizer, Solae, Turner Holidings, Valero and WM Barr (7)
  • Taxpayer Loss: $110.5M
  • Annual Taxpayer Loss: $8.2M
  • Overstated EDGE revenue generated: $200M

Existing and Additional Facility Capital Investment – Grade F

  • Companies: Cummins, Hollywood Feed and Nike (3)
  • Taxpayer Loss: $110.4M
  • Annual Taxpayer Loss: $7.35M
  • Overstated EDGE revenue generated: $213M

Local Facility Relocation Capital Investment – Grade C

  • Companies: Bryce, Sedgwick and T&B (3)
  • Taxpayer Gain: $2.45M
  • Annual Taxpayer Gain: $145k
  • Overstated EDGE revenue generated: $125M

New and Existing Facility Capital Investment – Grade F

  • Company: International Paper (1)
  • Taxpayer Loss: $59.5M
  • Annual Taxpayer Loss: $4M 
  • Overstated EDGE revenue generated: $230M

New Facility and Consolidation from West Memphis – Grade D

  • Companies: Coca Cola and TAG (2)
  • Taxpayer Loss: $9.6M
  • Annual Taxpayer Loss: $766k
  • Overstated EDGE revenue generated: $40M

New Facility Capital Investment – Grade B

  • Companies: ServiceMaster and Wright (2)
  • Taxpayer Gain: $19.5M
  • Annual Taxpayer Gain: $1.3M
  • Overstated EDGE revenue generated: $71M