Wednesday, October 18, 2017

Amazon Could Build a New 'Receive Center' in Memphis

Posted By on Wed, Oct 18, 2017 at 4:05 PM

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An Amazon distribution center could come to Memphis and bring 600 jobs, as Wednesday the city’s economic development agency approved a $15 million tax break for the company.

The Economic Development and Growth Engine of Memphis and Shelby County (EDGE) voted Wednesday to grant Amazon a Jobs pay-in-lieu-of-taxes (PILOT) incentive over 15 years as the company invests $62.9 million into constructing a “receive center” here.

The 615,440-square-foot center proposed for Holmes would be one of near 50 centers in the country that receive, repackage, and store products before going to Amazon fulfillment centers to then be shipped to customers.

The vacant lot at Holmes currently produces under $8,000 in local tax benefits annually, but the proposed receive center would generate approximately $37 million over the entire 15-year term and about $1.5 million annually post-PILOT.

Of the 600 jobs, Amazon officials say 25 of those would be management positions, paying an average of $80,000 per year. The remaining positions would be “Tier 1 Associate” and pay about $29,000 a year.

Memphis City Council member and non-voting member of the EDGE board Martavius Jones told his colleagues that continuing to incentivize low-wage jobs is a “race to the bottom.”

“We have not done a good job at knowing what our priorities are,” Jones said, citing Memphis’ high poverty rate. “We have to be deliberate about what kind of jobs we incentivize.”

Jones said this sentiment is shared among the majority of the city council members.

However, EDGE board chairman Al Bright, Jr., said looking at the potential local tax benefits of the project, which would increase 90 times over after the PILOT, it’s hard to pass up the opportunity. “These types of projects raise the bottom line immediately,” Bright said.

Per terms of the PILOT, Amazon would spend just over $12 million contracting with local women- or minority-owned businesses.

Still, Amazon officials say “it’s not a done deal,” as it is also considering other locations for the distribution center. Officials say they cannot disclose which cities those are. The company expects to announce it’s decision in the coming weeks.

If Memphis is chosen, officials say construction would take about a year from start to finish and the center would launch this time next year.

This comes as the Memphis joins other cities across the country vying to be the location of Amazon HQ2. 

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