New Facility and Consolidation from West Memphis (2)

COCA COLA and TAG / 60% RETENTION PROBABILITY / CATEGORY GRADE – D (70)

The below companies pursued thoughtful for profit motives by consolidating operations from West Memphis, AR. and each built a new facilities that leverage the cultural amenities in Memphis/Shelby County for the benefit of their operations, employees and customers.  These thoughtful for profit motives would still have been served without the benefit of a 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 60% is applied to the below quantitative analysis without the benefit of a tax abatement for existing job (retention) but assumes an expansion PILOT abatement for new jobs. When responsible accounting is applied to economic modeling for a retention 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:

Coca Cola – Grade D: The Coca Cola retention PILOT built a new facility and consolidated operations into Shelby County with arguably much better cultural amenities than Crittenden County, AR. The EDGE Board reported $27M 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 Coca Cola: (ER $27M) – (RP $16M) – (RW $4.5M) – (LI $5.5M) = $1M revenue gain less $3M retention tax abatement results in a $2M loss or $133k per year Memphis/Shelby County taxpayer loss. Estimated EDGE Overstated Revenue Generated: $26M

Raw EDGE Data Source: http://database.growth-engine.org/pilots/Coca-Cola+Refreshments+USA%2C+Inc.

TAG – Grade F: The TAG retention PILOT built a new facility and consolidated operations into Shelby County with arguably much better cultural amenities than Crittenden County, AR. The EDGE Board reported $11.5M 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 TAG: (ER $11.5M) – (RP $7M) – (RW $1.3M) – (LI $6.5M) = $3.3M revenue loss less $4.3M retention tax abatement results in a $7.6 loss or $633k per year Memphis/Shelby County taxpayer loss. Estimated EDGE Overstated Revenue Generated: $14.8M

Raw EDGE Data Source: http://database.growth-engine.org/pilots/TAG+Truck+Enterprises%2C+LLC