Local Facility Relocation (3)

BRYCE, SEDGWICK, T&B/ 50% RETENTION PROBABILITY / CATEGORY GRADE C (76)

The below companies pursued thoughtful for profit motives by relocating and expanding within Shelby County with their capital investment avoiding the hefty cost of significant operational disruption of employee and distant relocation costs. These thoughtful for profits motives would still have been served without the benefit of a retention tax abatement for existing jobs and with a tax abatement offered outside of Shelby County equal to the locally offered EDGE retention abatement. For this reason, a retention probability of 50% is applied to the below quantitative analysis without the benefit of a tax abatement for existing jobs but assumes a locally extended expansion PILOT abatement for new jobs. When responsible accounting is applied to economic modeling for a retention existing jobs PILOT, complete and responsible tax revenue accounting starts with EDGE Reported Revenue (ER) less a probability of retention times reported revenue (RP) less remaining workforce upon company departure as a percentage of retention probability (RP) less forgone tax revenue impact for local investment in jobs and resources that directly serve the local community (LI). In the below EDGE Company Retention Profiles, the previously mentioned accounting equation is applied to arrive at an estimated Memphis/Shelby County tax revenue figure for a given company PILOT. The assigned grades are evaluating the Retention PILOT; not the company. See below EDGE Company Retention PILOT profiles for this capital investment category:

EDGE Company Retention/Expansion Profiles:

Bryce – Grade D: The Bryce retention PILOT expanded, improved facilities and relocated within Shelby County avoiding the hefty cost of  employee and distant facility relocation. The EDGE Board reported $19M in tax revenue generated. When modeling in complete accounting, estimated taxpayer revenue is significantly less. Modeling in EDGE reported revenue using complete accounting, the following taxpayer estimated revenue generated can be derived for Bryce: (ER $19.5M) – (RP $10M) – (RW $3.5M) – (4.5M) = $1.5M gain less $2.3M retention tax abatement results in a $800k loss or $72k per year Memphis/Shelby County taxpayer loss. Estimated EDGE Overstated Revenue Generated: $17.5M

Raw Data Source (absent above calculations): http://database.growth-engine.org/pilots/Bryce+Corporation

Sedgwick – Grade F: The Sedgwick retention PILOT expanded, improved facilities and relocated within Shelby County avoiding the hefty cost of  employee and distant facility relocation. The EDGE Board reported $72M in tax revenue generated. When modeling in complete accounting, estimated taxpayer revenue is significantly less. Modeling in EDGE reported revenue using complete accounting, the following taxpayer estimated revenue generated can be derived for Bryce: (ER $72M) – (RP $36M) – (RW $15M) – ($17M) = $4M gain less $9M retention tax abatement results in a $5M loss or $333k per year Memphis/Shelby County taxpayer loss.  Estimated EDGE Overstated Revenue Generated: $68M

Raw Data Source (absent above calculations): http://database.growth-engine.org/pilots/Sedgwick+Claims+Management+Services%2C+Inc.

T&B – Grade A: The T&B retention PILOT expanded, improved facilities and relocated within Shelby County avoiding the hefty cost of  employee and distant facility relocation. The EDGE Board reported $51M in tax revenue generated. When modeling in complete accounting, estimated taxpayer revenue is significantly less. Modeling in EDGE reported revenue using complete accounting, the following taxpayer estimated revenue generated can be derived for T&B: (ER $51M) – (RP $25.5M) – (RW $9.5M) – ($5M) = $11M revenue gain less $2.75M retention tax abatement results in a $8.25M gain or $550k per year Memphis/Shelby County taxpayer gain. Overstated Revenue Generated: $40M

Raw Data Source (absent above calculations): http://database.growth-engine.org/pilots/Thomas+%26+Betts+Corp.+